Strategic review
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Transcript of Strategic review
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