1. 1 STRATEGY EVALUATION CRITERIA: PERFORMANCE AUDITS AUDIT: Crucial audit for assessing and identifying the implementation and performance status of formulated strategies THE FOLLOWING COMPONENTS ARE IMPORTANT: 1.Define the performance measures: MKTG Finance HR Issues 2.Conduct periodic assessment and monitoring 3.Review performance status/ success 4.Identify the critical gaps/ constraints 5.Modify the action plans

2. 2 STRATEGY EVALUATION CRITERIA: PERFORMANCE AUDITS 6.Introduce course corrective measures GOALSTARGETSACHIEVEMENTS CRITICAL GAPS MEASURES TO BE TAKEN Do we need to analyze & predict the environment better  realistic Do we need to facilitate strategy implementation as desired

3. 3 STRATEGIC IMPLEMENTAIO PROCESS Determine strategy and communicate measurable objectives for company as a whole Operationalize ways to measure performance Evaluate results, assess gaps, and provide feedback Regularly ascertain adequacy of control mechanisms Develop manager talent and educate managers in values and styles of the organization Make provision for a reward system reinforcing desired behavior Build MIS to provide adequate and timely data useful for business evaluation Determine key managerial tasks Assign tasks to various parts of organization, or restructure if necessary Delegate authority relationships and establish methods for coordination Allocate resources to SBUs and departments State policies as guides for action Clarify goals of various individual managers

4. 4 Benchmarks for Evaluation Key success factors Overall objectives or assumptions Expected performance at this time Current performance Existing deviations Projected deviations Financial Reduce Overhead Cost Profit on Sales 5% 12% 2% 5% 3% 9% +1% +4% +1% +2% Marketing Analyze new-product Proposals Sales per Employee 10 $ 7000 4 $ 6800 2 $ 6900 -2 +$100 -3 +$ 100 Personnel Number of key Managers needed Ratio of indirect cost to direct cost 6 12% 2 14% 3 13% +1 -1% +1 0% R & D Recruitment of senior engineers Increase R & D sales ratio 20 5% 16 4% 10 3% -6 -1% -6 -1% Operations: Increase production capacity 50%40% 0% Competitor Reactions: Increased R & D Product changes 4% 4 3% 2 4% 3 +1% +1 +1% +1

5. 5 Strategy Evaluation Criteria Important 1.Are the performance standards too low or too high, or are the environmental assumptions legitimate? If yes, alter by scaling up or down. If no, go to stage 2 2.Is the implementation inadequate? Are policies, resources, or organization changes needed? If yes, alter accordingly if no, go to stage 3 3.Is the strategy inadequate? Has the environment changed unexpected? (Original assumptions are quite uncertain or faulty.) Is the contingency plan needed? If yes, use the contingency plan or begin to formulate a new strategy. If no, go to stage 4 4.How can we alter our objectives or convince others that the gaps in performance will remain and are acceptable?

6. 6 THE BALANCED SCORE CARD FRAMEWORK A balanced set of performance measure for improving financial/ physical performance of firms. Audit Review Revamp Strategies to fulfill objectives Financial Measures Innovation & Learning Internal Process Re-Engineering Customer Perspective Goals Vs Targets 1.Turnover Growth 2.GPM - % 3.NPM - % 4.ROI - % 5.Cost Structure 1.Quality 2.Packaging 3.Lead Time Response 4.Delivery Schedule 5.Product/ Service Features 6.After Sales Service 1.New Product 2.New processes 3.Training & Development 4.R & D Initiatives 1.Existing Products 2.Current Business Processes 3.Internal Realignment 4.Other issues