STRATEGIC REVIEW

BY- PREETI DUTT GARG ROLL NO.-8

STRATEGY REVIEW, EVALUATION, AND CONTROL

The best formulated and best implemented strategies become obsolete as a firm’s external and internal environments change. Therefore, it is essential for strategists to systematically review, evaluate, and control the execution of strategies.

STRATEGY REVIEW, EVALUATION, AND CONTROL

Strategy Evaluation is vital to an organization’s well being. Timely evaluations can alert management to potential or actual problems before a situation becomes critical. Strategy Evaluation includes three basic activities: (1) Examining the underlying bases of a firm’s

strategy. (2) Comparing expected results to actual

results. (3) Taking corrective actions to ensure that

performance conforms to plans.

STRATEGY EVALUATION

Adequate and timely feedback is the cornerstone of effective Strategy Evaluation.

Strategy Evaluation is important because organizations face dynamic environments in which key external and internal factors can change quickly and dramatically.

Strategy Evaluation is essential to ensure that the stated objectives of an organization are being achieved.

STRATEGY REVIEW, EVALUATION, AND CONTROL

RUMELT’SFOUR

CRITERIA

CONSISTENCY

CONSONANCE

FEASIBILITY

ADVANTAGE

STRATEGY REVIEW, EVALUATION, AND CONTROL

CONSISTENCY

Strategy should not present inconsistent goals and policies

CONSONANCE

Need for strategists to examine sets of trends, as well as individual trends

FEASIBILITY

Neither overtax resources nor create unsolvable sub problems

Creation or maintenance of competitive advantage

ADVANTAGE

MONITOR STRENGTHS & WEAKNESSES; OPPORTUNITIES & THREATS

Are our strengths still strengths? Has our organization added additional

strengths? Are our weaknesses still weaknesses? Has our organization developed other

weaknesses?

MEASURING ORGANIZATIONAL PERFORMANCE

Compare expected to actual results Investigate deviations from plan Evaluate individual performance Examine progress toward stated

objectives

QUANTITATIVE CRITERIA FOR STRATEGY EVALUATION

Strategists use financial ratios to: Compare a firm’s performance

over different time periods Compare a firm’s performance to

competitors’ performance Compare a firm’s performance to

industry averages

TAKING CORRECTIVE ACTIONTaking corrective action is the final

strategy evaluation activity. It requires making changes to competitively reposition a firm for the future. Examples of changes that may be needed are altering an organization’s structure, replacing one or more key employees, selling a division, devising new policies, issuing stock to raise capital, allocating resources differently, or revising the firm’s mission.

Taking corrective action is necessary to keep an organization on track toward achieving its objectives.

THANK YOU