ch 9 -1 chapter 9 strategy review, evaluation, & control

Ch 9 -1

Chapter 9Strategy Review, Evaluation, & Control

Ch 9 -2

1. Examine the underlying bases of a firm’s strategy

2. Compare expected to actual results3. Identify corrective actions to ensure that

performance conforms to plans

Strategy Evaluation, Review & Control

3 Basic Activities

Ch 9 -3


Consonance

Consistency

Feasibility

Advantage

Rummelt’s4 Criteria

Ch 9 -4


Strategy should not present inconsistent goals & policies

Consistency

Ch 9 -5


Need for strategies to examine sets of trends

Consonance

Ch 9 -6


Neither overtax resources or create unsolvable sub-problems

Feasibility

Ch 9 -7


Creation or maintenance of competitive advantage

Advantage

Ch 9 -8


Are strengths still strengths? Have we added additional strengths? Are weaknesses still weaknesses? Have we developed other weaknesses?

Monitor Strengths & Weaknesses; Opportunities & Threats

Ch 9 -9


Are opportunities still opportunities? Other opportunities develop? Are threats still threats Other threats emerged? Are we vulnerable to hostile takeover?

Monitor Strengths & Weaknesses; Opportunities & Threats

Ch 9 -10

Evaluation FrameworkI. Review Underlying Bases

Continue present course

II. Measure Firm Performance

III.Take

Corrective Actions

Differences?

Differences?

Yes

NO

Yes

NO

Ch 9 -11


Return on investment (ROI) Return on equity (ROE) Profit margin Market Share

Key Financial Ratios

Ch 9 -12


Debt to equity Earnings per share (EPS) Sales growth Asset growth

Key Financial Ratios

Ch 9 -13


-- Evaluate strategies from 4 perspectives:

1. Financial performance

2. Customer knowledge

3. Internal business processes

4. Learning & growth

Balanced Scorecard

Ch 9 -14

Balanced Scorecard

Area of Objectives Measure or Target Time Expectation Primary Responsibility

Customers

1

2

Managers/Employees

1

2

Operations/Processes

1

2

Community/Social Responsibility

1

2

Business Ethics/Natural Environment

1

2

Financial

1

2

Ch 9 -15

Strategy-Evaluation Assessment Matrix

Continue courseYesNoNo

Corrective actionsNoYesNo

Corrective actionsYesYesNo

Corrective actionsNoNoYes

Corrective actionsYesNoYes

Corrective actionsNoYesYes

Corrective actionsYesYesYes

Corrective actionsNoNoNo

Result

Has the firm progressed

satisfactorily toward achieving its stated

objectives?

Have major changes

occurred in the firm’s external

strategic position?

Have major changes

occurred in the firm’s internal

strategic position?

Ch 9 -16


Process is more an “art” than “science” Should strategies be visible or hidden from

stakeholders Should process be more top-down or bottom

up

21st Century Challenges in Strategic Management

ch 9 -1 chapter 9 strategy review, evaluation, & control

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