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    Strategies in Action: Strategic Management: Concepts & Cases 13 Edition Global Edition Fred David

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    Khaled Wael

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    Strategies in Action: Strategic Management: Concepts & Cases 13 Edition Global Edition Fred David

    Uploaded by

    Khaled Wael
    40 views27 pages

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    david_sm13_ppt_05

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    © All Rights Reserved
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    Download as ppt, pdf, or txt
    40 views27 pages

    Strategies in Action: Strategic Management: Concepts & Cases 13 Edition Global Edition Fred David

    Uploaded by

    Khaled Wael

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 27

    Chapter 5

    Strategies in Action

    Strategic Management:
    Concepts & Cases
    13th Edition
    Global Edition
    Fred David

    Copyright © 2011 Pearson Education Ch 5 -1


    Copyright © 2011 Pearson Education Ch 5 -2
    Copyright © 2011 Pearson Education Ch 5 -3
    Copyright © 2011 Pearson Education Ch 5 -4
    Financial vs. Strategic Objectives
    Financial Objectives
    Growth in revenues
    Growth in earnings
    Higher dividends
    Larger profit margins
    Greater ROI
    Higher earnings per share
    Rising stock price
    Improved cash flow
    Copyright © 2011 Pearson Education Ch 5 -5
    Financial vs. Strategic Objectives
    Strategic Objectives
     Larger market share
     Quicker on-time delivery than rivals
     Shorter design-to-market times than rivals
     Lower costs than rivals
     Higher product quality than rivals
     Wider geographic coverage than rivals
     Achieving technological leadership
     Consistently getting new or improved
    products to market ahead of rivals
    Copyright © 2011 Pearson Education Ch 5 -6
    Not Managing by Objectives
    Managing by Extrapolation – “If it ain’t
    broke, don’t fix it”
    Managing by Crisis – The true measure of a
    good strategist is the ability to fix problems
    Managing by Subjectives – “Do your own
    thing, the best way you know how”
    Managing by Hope – The future is full of
    uncertainty and if at first you don’t succeed,
    then you may on the second or third try
    Copyright © 2011 Pearson Education Ch 5 -7
    The Balanced Scorecard

    Robert Kaplan & David Norton –

    Strategy evaluation & control technique


    Balance financial measures with
    nonfinancial measures
    Balance shareholder objectives with
    customer & operational objectives
    Copyright © 2011 Pearson Education Ch 5 -8
    Levels of Strategies –
    Large Company

    Copyright © 2011 Pearson Education Ch 5 -9


    Levels of Strategies –
    Small Company

    Copyright © 2011 Pearson Education Ch 5 -10


    Types of Strategies

    Forward
    Integration

    Vertical Backward
    Integration Integration
    Strategies

    Horizontal
    Integration

    Copyright © 2011 Pearson Education Ch 5 -11


    Vertical Integration Strategies
    Forward Gaining ownership or increased
    Integration control over distributors or retailers

    Backward Seeking ownership or increased


    Integration control of a firm’s suppliers

    Horizontal Seeking ownership or increased


    Integration control over competitors

    Copyright © 2011 Pearson Education Ch 5 -12


    Types of Strategies

    Market
    Penetration

    Intensive Market
    Strategies Development

    Product
    Development

    Copyright © 2011 Pearson Education Ch 5 -13


    Intensive Strategies
    Seeking increased market share for
    Market present products or services in
    Penetration present markets through greater
    marketing efforts

    Market Introducing present products or


    Development services into new geographic areas

    Seeking increased sales by


    Product
    improving present products or
    Development services or developing new ones

    Copyright © 2011 Pearson Education Ch 5 -14


    Types of Strategies

    Related
    Diversification

    Diversification
    Strategies

    Unrelated
    Diversification

    Copyright © 2011 Pearson Education Ch 5 -15


    Diversification Strategies

    Related Adding new but related products or


    Diversification services

    Unrelated
    Adding new, unrelated products or
    Diversification services

    Copyright © 2011 Pearson Education Ch 5 -16


    Types of Strategies

    Retrenchment

    Defensive Divestiture
    Strategies

    Liquidation

    Copyright © 2011 Pearson Education Ch 5 -17


    Defensive Strategies
    Regrouping through cost and asset
    Retrenchment reduction to reverse declining sales
    and profit

    Divestiture Selling a division or part of an


    organization

    Selling all of a company’s assets, in


    Liquidation parts, for their tangible worth

    Copyright © 2011 Pearson Education Ch 5 -18


    Retrenchment Strategy

     Bankruptcy types
     Chapter 7 – liquidation
     Chapter 9 – municipalities

     Chapter 11 – reorganization

     Chapter 12 – family farmers

     Chapter 13 – small businesses

    Copyright © 2011 Pearson Education Ch 5 -19


    Porter’s Five Generic Strategies

     Type 1 Cost Leadership – Low cost


     Type 2 Cost Leadership – Best value

     Type 3 Differentiation

     Type 4 Focus – Low cost

     Type 5 Focus – Best value

    Copyright © 2011 Pearson Education Ch 5 -20


    Copyright © 2011 Pearson Education Ch 5 -21
    Type 1 or 2 Cost Leadership Strategy
    Conditions
     Vigorous price competition
     Plentiful supply of identical products
     Little product differentiation
     Products used in same ways
     Low cost to switch
     Large buyers with power
     Industry newcomers use low prices to attract
    buyers
    Copyright © 2011 Pearson Education Ch 5 -22
    Type 3 Differentiation Strategy
    Conditions
     Many ways to differentiate and buyers
    perceive the differences as having value
     Diverse buyer needs and uses
     Few rival firms following similar
    differentiation approach
     Fast paced technological change and
    evolving product features

    Copyright © 2011 Pearson Education Ch 5 -23


    Type 4 or 5 Focus Strategy
    Conditions
     Large, profitable, and growing target market
    niche
     Industry leaders do not consider the niche
    crucial to their success
     Industry leaders consider it costly or difficult
    to meet the needs of this niche
     Industry has many niches and segments
     Few rivals are specializing on this target
    segment

    Copyright © 2011 Pearson Education Ch 5 -24


    Means for Achieving Strategies

     Cooperation among competitors


     Joint venture / partnering

     Merger / acquisition

     First mover advantages

     Outsourcing

    Copyright © 2011 Pearson Education Ch 5 -25


    Strategic Management in Nonprofit and
    Governmental Organizations

    Educational Institutions
    Medical Organizations
    Governmental Agencies and
    Departments

    Copyright © 2011 Pearson Education Ch 5 -26


    All rights reserved. No part of this publication may be reproduced, stored in a
    retrieval system, or transmitted, in any form or by any means, electronic,
    mechanical, photocopying, recording, or otherwise, without the prior written
    permission of the publisher. Printed in the United States of America.

    Copyright © 2011 Pearson Education Ch 5 -27

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