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08 - Implementing Strategies - Finance and MIS Issues (With Quiz)

Here are 3 items in the P&L and their implications explained briefly for each role: 1. Marketing Department Head - Sales Revenue: Shows impact of marketing efforts and opportunities for growth - Marketing Expenses: Allows evaluation of budget and ROI of different marketing activities 2. Plant Manager - Cost of Goods Sold: Indicates production efficiency and opportunities for cost reduction - Operating Expenses: Allows monitoring of factory overhead and opportunities for savings 3. Receptionist - Sales Revenue: Indicates company performance and job security - Net Income: Shows overall profitability and company's financial health - Operating Expenses: Gives a sense of costs involved in running the business operations

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52 views21 pages

08 - Implementing Strategies - Finance and MIS Issues (With Quiz)

Here are 3 items in the P&L and their implications explained briefly for each role: 1. Marketing Department Head - Sales Revenue: Shows impact of marketing efforts and opportunities for growth - Marketing Expenses: Allows evaluation of budget and ROI of different marketing activities 2. Plant Manager - Cost of Goods Sold: Indicates production efficiency and opportunities for cost reduction - Operating Expenses: Allows monitoring of factory overhead and opportunities for savings 3. Receptionist - Sales Revenue: Indicates company performance and job security - Net Income: Shows overall profitability and company's financial health - Operating Expenses: Gives a sense of costs involved in running the business operations

Uploaded by

Im Nayeon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Chapter 8

Implementating Strategies
– Finance and MIS

Strategic Management:
Concepts & Cases
17th Edition
Global Edition
Fred R. David
Forest R. David
Marketing Issues
Marketing decisions requiring policies
 Exclusive dealerships or multiple channels of
distribution
 Heavy, light, or no TV advertising
 To limit or not the share of business with a single
customer
 Price leader or price follower
 Offer complete or limited warranty
 Reward salespeople with commission or salary
 Advertise online or not
Marketing Mix Variables
 Product
 Place

 Promotion

 Price
Marketing Decisions and their
Financial Effects
PRODUCT
 New Products to be introduced, or old ones
to be withdrawn or improved
 Product ranges, lines
 Product positioning vis-à-vis competitors,
direct competition or differentiation
 Branding
 Product design / performance characteristics
Marketing Decisions and their
Financial Effects
PRODUCT
 Issue: Balancing the costs of market research and product
development against the potential economic benefits
 Decisions:
 Make
 Buy
 Outsource

 s
Marketing Decisions and their
Financial Effects
PRICE
 Approaches
 Accounting-based approach
 Economic approach
 Market Analysis-based
Marketing Decisions and their
Financial Effects
PROMOTION
 Includes advertising, public relations and
customer-oriented sales promotions
 Point-of-sales materials for retailers, training
programmes, dealer incentives, discounts,
etc.
Marketing Decisions and their
Financial Effects
PLACE
 How the product gets to the customer, what
channels to use, how many outlets
 Store level stocks, consigned inventories,
replenishment of stocks
Finance/Accounting Issues

 Acquiring needed capital


 Developing projected financial
statements
 Preparing financial budgets

 Evaluating the worth of a business


Finance/Accounting Issues
 Raise capital – short-term debt, long-term
debt, preferred, or common stock
 Lease or buy fixed assets
 Determine appropriate dividend payout
ratio
 LIFO, FIFO, or market-value accounting
 Timeframe of accounts receivable
 Discounts on accounts
 Amount of cash to be kept on hand
Types of Budgets

 Cash budgets  Expense budgets


 Operating budgets  Divisional budgets
 Sales budgets  Variable / Flexible
 Profit budgets budgets
 Factory budgets  Fixed budgets
 Capital budgets
Accounting Implications of Marketing
 Transaction – the exchange of money for goods or services.
 Accounting monitors these transactions and records their effect.
 When taken together, the organization can understand how well or
how poorly it is doing.
 Accounting provides summarized reports and controls to
effectively manage its finances.
 Non-financial manager’s interests: what stocks were sold, what
stocks remain, what needs to be produced and how best to
distribute.
 Key Issue: All in the past

“A sound understanding of the past is usually necessary for a well-


founded consideration of how future developments might unfold.”
Management Information
Systems (MIS)

Having an effective management


information system (MIS) may be the
most important factor in differentiating
successful from unsuccessful firms.
IS vs IT
IS (Information System)
-Refersto how information is gathered, processed, stored, used, and
disseminated in the organization.

-The IS strategy is to define and provide the organization’s demand for


information and systems to support the overall strategy of the
business.

IT (Information Technology)
-Refersto hardware, software and telecommunication networks
technology.

-The IT strategy is concerned with how the organization’s demand for


information and systems will be supported by technology.
MIS: Functions
 It converts data into information and allows such information to be
interpreted in a way that allows enhanced knowledge of an issue or
situation.

 The processing from data into information can be through the ff


techniques:
 Contextualization – why data are being collected

 Categorization – by units of analysis (by product, by store)

 Calculation – by analysis using math or statistics

 Correction – by removing errors from the data

 Condensing – by summarizing the data

 IT IS THE FINAL PRODUCT OF THE DATA PROCESSING THAT IS


USED TO SUPPORT DECISION MAKERS IN DECISION-MAKING AND
AND THUS THE ACHIEVEMENT OF COMPETITIVE ADVANTAGE.
MIS: Levels of Decision-Making
 Strategic (Top Management)
- long-term goals and plans, issues that impact future growth &
profitability of the firm
- Ex: environment, market, competitors, suppliers, customers

 Tactical (Middle Management)


- medium-term impact on the organization
- Ex: selecting suppliers of materials, product pricing

 Operational (Line Managers)


- Decisions that affect the day-to-day running of the organization
- Narrower scope and shorter-term impact
- Ex: Order processing, billing, collection
MIS: Summary
 Information collection, retrieval, and
storage
 Keeping managers informed
 Coordination of activities among divisions
 Allows firm to reduce costs
How can Marketing Managers make
use of the Profit and Loss Statement?

 Identify five (5) items in the P&L and


explain briefly its implications for
marketing
How can you make Non-Accountants
appreciate the Profit and Loss
Statement?

Identifythree (3) items in the P&L and


explain briefly its implications to a/an:
1.Marketing Department Head

2.Plant Manager

3.Receptionist

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