Strategy Evaluation

1661 WordsFeb 18, 20057 Pages
Suppose your company has just acquired a firm that produces battery-operated lawn mowers, and strategists want to implement a market-penetration strategy. How would you segment the market for this product? Justify your answer. Explain how you would estimate the total worth of a business. In order to estimate the total worth of a business, I would determine its net worth or stockholders equity. After calculating net worth, I would add or subtract an appropriate amount for goodwill and overvalued or undervalued assets. I would establish the businesses to worth at five times its current annual profit. I may chose to use a five-year average profit level. I would also consider using the price-earnings ratio method or possibly the outstanding…show more content…
Methods to determine a business' worth are central to strategic implementation. These include evaluating stockholder's equity, future benefits its owners may derive through net profits, and letting the market determine the company's value. Research and Development is important in strategy implementation in that the personnel are responsible for new product development and improving existing ones. R&D is also charged with developing raw resources, transferring technology, adapting to local markets, and honing products to meet particular specifications. Success is achieved, however, when R&D can match a company's capabilities to market opportunities. (Page 291) Three methods employed by R&D are" being the first firm to market new technological products", "to be an innovative imitator of successful products", and to be a low-cost producer by "mass- producing products similar to but less expensive than products recently introduced". (Page 292 Management information systems gather and store information to create competitive advantages vital to the understanding in a firm. An effective MIS greatly enhances strategic management by "cross selling to customers, monitoring suppliers, keeping managers and employees informed, coordinating activities among divisions, and managing funds." (293) A good MIS reduces cost, for instance, by allowing workers to do their jobs from the home. An MIS serves to protect business interests, especially those involved with
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