STRATEGY EVALUATION AND TECHNIQUES

PRESENTED BY:Ankur mehraMadhulika singhAnkit bawaNaveen sharmaAshu sharma

It is the last phase of strategic planning and

management . Strategic evaluation process is

based on the evaluation of enviourment and internal assessment .Strategic evaluation

thus comprises of –i. Monitoring the enviourmental factors.ii. Reassessing the strategy ,goals and plans

if there are deviations.

The factors that are considered important for

the success of company’s strategy• Qualify top management. • Decision making power ,creativity and

imagination.• Improved source to top management.• Competitive financial return to

investors.

Quantitative factor• Increased market share • Net profits• Market price of the share • Production cost and efficiency• Distribution cost and efficiency• Return on equity

Qualitative factors-• Internal consistency• Consistency with the environment.• Consistency with available resources

• Control should involve only the minimum

amount of information.• Control should monitor only managerial

activities and result.• Long-term and short-term controls should

be used.• Controls should aim at pinpointing

exceptions.• Reward for meeting or exceeding standards

should be emphasised.

• Setting standards and performance: Strategists encounter the following three questions while dealing with standard setting:

What standards to set? How to set these standards? and in

What terms do we express these standards?

• Measuring of performance: The evaluation performance operates at performance level

As action takes place . A part from the methods of measuring performance . The other important aspects of measurement relate to the difficulties , timing and periodicity in measuring.

• Analyzing variances: The measurement of actual performance and its comparison with standard or budgeted performance leads to an analysis of variance. Broadly, the following three situations may arise:

o The actual performance matches the budgeted performance.

o The actual performance deviates positively over the budgeted performance.

o The actual performance deviates negatively from the budgeted performance.

• Taking corrective action: Three courses of corrective action are:

o Checking of performance.o Checking of standards.o Reformulating strategies , plans and

objectives.

• Need for feedback, appraisal and reward

• Check on the validity of strategic choice• Congruence between decisions and

integrated strategy• Successful culmination of the strategic

management process • Creating inputs for new strategic

planning

• Board of directors.• Chief executives.• Audit and executives committees.• Middle level managers.• Financial controllers and company

secretaries.• The profit center heads.

• Limits of control-

Any control mechanism presents the dilemma of too much versus too less control. It is never an easy task for strategists to decide the limits of control.

• Difficulties in measurement-

These mainly relate to the reliability and validity of measurement techniques used for evaluation, lack of quantifiable objective

• Resistance to evaluation-

The evaluation process involves controlling the behavior of individuals and like any similar organizational mechanism is likely to be resisted by managers .

• Short-termism-

Managers often tend to rely on short-term implications of activities and try to measure the immediate results.