QUIZ strategic management concepts &cases 11th edition by Fred

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Ch 5 -1
Chapter 5
Strategies in Action
Strategic Management:
Concepts & Cases
13th Edition
Fred David

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Ch 5 -2

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Ch 5 -3
Long Term Objectives
 Quantitative
 Measurable
 Realistic
 Understandable
 Challenging
 Hierarchical
 Obtainable
 Congruent

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Ch 5 -4

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Ch 5 -5

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Ch 5 -6
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 -7
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

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Ch 5 -8
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

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Ch 5 -9
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 -10
Levels of Strategies –
Large Company

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Ch 5 -11
Levels of Strategies –
Small Company

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Ch 5 -12
Types of Strategies
Vertical
Integration
Strategies
Forward
Integration
Backward
Integration
Horizontal
Integration

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Ch 5 -13
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
Horizontal
Integration
Seeking ownership or increased
control over competitors

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Ch 5 -14
Types of Strategies
Intensive
Strategies
Market
Penetration
Market
Development
Product
Development

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Ch 5 -15
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 -16
Types of Strategies
Diversification
Strategies
Related
Diversification
Unrelated
Diversification

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Ch 5 -17
Diversification Strategies
Related
Diversification
Adding new but related products or
services
Unrelated
Diversification
Adding new, unrelated products or
services

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Ch 5 -18
Types of Strategies
Defensive
Strategies
Retrenchment
Divestiture
Liquidation

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Ch 5 -19
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 -20
Retrenchment Strategy
 Bankruptcy types
 Chapter 7 – liquidation
 Chapter 9 – municipalities
 Chapter 11 – reorganization
 Chapter 12 – family farmers
 Chapter 13 – small businesses

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Ch 5 -21
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 -22

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Ch 5 -23
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

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Ch 5 -24
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

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Ch 5 -25
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

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Ch 5 -26
Means for Achieving Strategies
 Cooperation among competitors
 Joint venture / partnering
 Merger / acquisition
 First mover advantages
 Outsourcing

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Ch 5 -27
Strategic Management in Nonprofit and
Governmental Organizations
Educational Institutions
Medical Organizations
Governmental Agencies and
Departments

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Ch 5 -28
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