Chapter 5 Strategies in Action

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Transcript Chapter 5 Strategies in Action

Chapter 5 Strategies in Action Strategic Management: Concepts & Cases 13 th Edition Fred David

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ch 5 -1

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Ch 5 -2

Long Term Objectives

 Quantitative  Measurable  Challenging  Hierarchical  Realistic  Obtainable  Understandable  Congruent

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Ch 5 -3

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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

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Ch 5 -5

The Balanced Scorecard Robert Kaplan & David Norton –

 Strategy evaluation & control technique  Balance financial measures with nonfinancial measures  Balance shareholder objectives with customer & operational objectives

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Ch 5 -6

Levels of Strategies – Large Company

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Ch 5 -7

Levels of Strategies – Small Company

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Ch 5 -8

Types of Strategies Vertical Integration Strategies Forward Integration Backward Integration

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Ch 5 -9

Vertical Integration Strategies

Forward Integration Gaining ownership or increased control over distributors or retailers Backward Integration Seeking ownership or increased control of a firm’s suppliers

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Ch 5 -10

Types of Strategies Intensive Strategies Market Penetration Market Development Product Development

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Ch 5 -11

Intensive Strategies

Market Penetration Seeking increased market share for present products or services in present markets through greater marketing efforts Market Development Introducing present products or services into new geographic areas Product Development Seeking increased sales by improving present products or services or developing new ones

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Ch 5 -12

Types of Strategies Related Diversification Diversification Strategies Unrelated Diversification

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Ch 5 -13

Diversification Strategies

Related Diversification Unrelated Diversification Adding new but related products or services Adding new, unrelated products or services

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Ch 5 -14

Types of Strategies Defensive Strategies Retrenchment Divestiture Liquidation

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Ch 5 -15

Defensive Strategies

Retrenchment Regrouping through cost and asset reduction to reverse declining sales and profit Divestiture Selling a division or part of an organization Liquidation Selling all of a company’s assets, in parts, for their tangible worth

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Ch 5 -16

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

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Ch 5 -17