1. Chapter 9 Strategy Review, Evaluation, & Control

2. Strategy Evaluation, Review & Control
3 Basic Activities
Examine the underlying bases of a firm’s strategy
Compare expected to actual results
Identify corrective actions to ensure that performance conforms to plans

3. Strategy Evaluation, Review & Control
Consistency
Rummelt’s 4 Criteria
Consonance
Feasibility
Advantage

4. Strategy Evaluation, Review & Control
Consistency
Strategy should not present inconsistent goals & policies

5. Strategy Evaluation, Review & Control
Consonance
Need for strategies to examine sets of trends

6. Strategy Evaluation, Review & Control
Feasibility
Neither overtax resources or create unsolvable sub-problems

7. Strategy Evaluation, Review & Control
Advantage
Creation or maintenance of competitive advantage

8. Strategy Evaluation, Review & Control
Monitor Strengths & Weaknesses; Opportunities & Threats
Are strengths still strengths?
Have we added additional strengths?
Are weaknesses still weaknesses?
Have we developed other weaknesses?

9. Strategy Evaluation, Review & Control
Monitor Strengths & Weaknesses; Opportunities & Threats
Are opportunities still opportunities?
Other opportunities develop?
Are threats still threats
Other threats emerged?
Are we vulnerable to hostile takeover?

10. II. Measure Firm Performance
I. Review Underlying Bases
Evaluation Framework
III.
Take
Corrective
Actions
Yes
Differences? NO
II. Measure Firm Performance
Yes
Differences? NO
Continue present course

11. Strategy Evaluation, Review & Control
Key Financial Ratios
Return on investment (ROI)
Return on equity (ROE)
Profit margin
Market Share

12. Strategy Evaluation, Review & Control
Key Financial Ratios
Debt to equity
Earnings per share (EPS)
Sales growth
Asset growth

13. Strategy Evaluation, Review & Control
Balanced Scorecard
-- Evaluate strategies from 4 perspectives:
1. Financial performance
2. Customer knowledge
3. Internal business processes
4. Learning & growth

14. Primary Responsibility
Balanced Scorecard
Area of Objectives
Measure or Target
Time Expectation
Primary Responsibility
Customers 1 2
Managers/Employees
Operations/Processes
Community/Social Responsibility
Business Ethics/Natural Environment
Financial

15. Strategy-Evaluation Assessment Matrix
Continue course
Yes No
Corrective actions
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?

16. Strategy Evaluation, Review & Control
21st Century Challenges in Strategic Management
Process is more an “art” than “science”
Should strategies be visible or hidden from stakeholders
Should process be more top-down or bottom up