ch 9 -1 chapter 9 strategy review, evaluation, & control
TRANSCRIPT
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
Strategy Evaluation, Review & Control
Consonance
Consistency
Feasibility
Advantage
Rummelt’s4 Criteria
Ch 9 -4
Strategy Evaluation, Review & Control
Strategy should not present inconsistent goals & policies
Consistency
Ch 9 -5
Strategy Evaluation, Review & Control
Need for strategies to examine sets of trends
Consonance
Ch 9 -6
Strategy Evaluation, Review & Control
Neither overtax resources or create unsolvable sub-problems
Feasibility
Ch 9 -7
Strategy Evaluation, Review & Control
Creation or maintenance of competitive advantage
Advantage
Ch 9 -8
Strategy Evaluation, Review & Control
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
Strategy Evaluation, Review & Control
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
Strategy Evaluation, Review & Control
Return on investment (ROI) Return on equity (ROE) Profit margin Market Share
Key Financial Ratios
Ch 9 -12
Strategy Evaluation, Review & Control
Debt to equity Earnings per share (EPS) Sales growth Asset growth
Key Financial Ratios
Ch 9 -13
Strategy Evaluation, Review & Control
-- 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
Strategy Evaluation, Review & Control
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