Strategic Evaluation

1. Prepared By: Imtiaz Ali
Roll no: 1812
BBA 6th SEM
Course: Strategic Management
Abasyn University Islamabad

3. Strategic Evaluation:
 Finding out what is going on is what evaluation is all about. Strategic Evaluation
means collecting information about how well the strategic plan is progressing.
 Strategic Evaluation the strategy evaluation process involves analyzing your
strategic plan and assessing how well you've done against achieving the goals in
your strategy. A strategy evaluation is an internal analysis tool and should be used
as part of a broader strategic analysis for the organization when making decisions
about your strategy.
 Strategy evaluation is the last phase of the strategic management process in which
managers try to assure that the strategic choice is properly implemented and is
meeting the objectives of the organization.

4.  Nature of Strategic evaluation The strategic management process does not end when
the firm decides what strategy or strategies to pursue. There must be a translation
of strategic thought into strategic action.
 Strategy evaluation includes three basic activities:
(1) examining the underlying bases of a firm’s strategy.
(2) comparing expected results with actual results.
(3) taking corrective actions to ensure that performance conforms to plans.

5.  There has to be a way of finding out whether the strategic being implemented will guide
the organization towards its intended objectives. Strategic evaluation and control,
therefore, performs the crucial task of keeping the organization on the right track.
 The business environment is dynamic and complex in nature. The business
environments are:
• Highly sensitive and complex in nature .
• Unpredictable about the future and accuracy of business environment.
• Globalization and other factors also increases the flexibility of business environment
which make difficult to implement business strategies.

6.  Strategic evaluation is an important tool for assessing how well your business has
performed, relative to its goals. It's an important way to reflect on achievements
and shortcomings, and is also useful for reexamining the goals themselves, which
may have been set at a different time, under different circumstances. The
importance of strategic evaluation process may be described with the following
points:
 1.The strategic evaluation identifies the corrective steps and actions to achieve
business efficiency and effectiveness.
 2. The strategic evaluation is not only focused to measure the result but also
provides the right paths and directions to achieve desired organizational goals.
 3. The output of strategic evaluation is feedback which provides essential inputs for
the future strategic decisions or plans and polices of the organization.

7. 4 The strategic evaluation is also related with performance appraisal system for
reward and recognitions which leads the motivation of employees and boosts the
morale of the employees in the organization.
5. Strategic evaluation process is beneficial for all organizations whether small,
medium, or large.

9.  Shareholders
 Board of Directors
 Chief Executives
 Profit Center Heads or SBU Heads
 Financial Controllers
 Company Secretaries
 External and Internal Auditors
 Audit and Executive Committees
 Corporate Planning staff or Department
 Middle Level Managers

10.  Limits of control: It is never an easy task for ‘strategists to decide the limits of
control. Too much control may damage the ability of managers; on the other hand,
too less control may make the strategic evaluation process ineffective.
 Difficulties in measurement: The process of strategic evaluation is fraught with
the danger of difficulties in measurement. The control system may measure element
which is not intended to be evaluated.
 Resistance: The evaluation process involves controlling the behavior of
individuals. It is likely to be resisted by managers.

11.  Short-termism: Managers often tend to measure the immediate results. As a result,
the extended effect of strategy on performance is ignored.
 Relying on efficiency Vs effectiveness: Efficiency is “doing things right” and
effectiveness is “doing the right thing”. There is often a genuine confusion among
managers as to what constitutes effective performance.

12.  Strategy evaluation in modern business environment has become a difficult
and complicated process because of certain factors :
• Increase in environment complexity
• Difficulty in predicting the future accurately
• Increasing number of variables
• High rate of obsolescence of even the best laid plans
• Increase in domestic world events
• Decreasing time span for planning certainty

13. 1. Strategy evaluation process or measures should be meaningful. These should specifically
relate to the objectives/targets and the plan. There should be clear focus and no
ambiguity.
2. Strategy evaluation and control process should be economical. This means that the
process should not be made unnecessarily elaborate and incurs too much cost on
evaluation itself.
3. The evaluation process should conform to a proper time dimension for control and
information retrieval or dissemination. Time dimension of control should coincide with
the time span of the activity or the implementation phase. Also, information on
developments or feedback should be timely to make evaluation and control more
appropriate.

14.  Strategy evaluation system should give a true picture of what is actually happening.
The objective of evaluation is not fault finding. Sometimes, performance may be
overshadowed by external factors or the environment. For example, during a severe
slump in economic/business activity, productivity and profitability may decline in
spite of best efforts by the managers to implement strategy.
 Strategy evaluation process should not dominate or curb decisions; it should
promote mutual understanding, trust and common cause. All functional and
operational areas should cooperate with each other in evaluating and controlling
strategies. Strategy evaluation process should be simple and not too complex or
restrictive.

15.  Consistency:
Are the external strategies consistent with (supported by) the various internal
aspects of the organization? You must examine all the various functional and internal
management strategies employed by the organization and compare them with the
external business strategy.
Consonance:
Are the strategies in agreement with the various external trends (and sets of
trends) in the environment? To answer this questions, you need to look at all the
major trends that impact the selected strategy - both positively and negatively.

16.  Feasibility:
Is the strategy reasonable in terms of the organization's resources?
· Money and capital
· Management, professional, and technical resources
· Time span
 Advantage:
Does the strategy create and/or maintain a competitive advantage?
· Resources
· Skills
· Position

17. 1. Gap Analysis:
 New Product Launch: After a company launches a new product, they might do a
gap analysis to determine why sales didn’t meet forecasts.
 Productivity: When a factory’s productivity is not meeting expectations, targeted
customer needs, or the set of business requirements that were laid out a gap
analysis can help determine what process to fix.
 Supply Management: If a hospital finds itself running short of supplies on a regular
basis, they could perform a gap analysis to identify the reason why.
 Sales Performance: A manufacturer can look at the sales performance of their
catalog of products to make sure they are producing the right mix, and use the
result to maximize their production–possibility frontier.

18. 2. SWOT Analysis:
 This is one techniques of strategic evaluation to actual monitor the performance of
strategic decisions. SWOT describes as organization’s strengths, weaknesses,
opportunities and threats.
 The business environment is complex and dynamic nature and consists of internal
and external environment.
 It is an Unpredictable about the future and accuracy of business environment.
Internal Environment consists of organization’s strengths, weaknesses and on other
side external environment is only being provided only opportunities and threats.

19. 3. PEST Analysis:
 This is one of the techniques used for the evaluation system of strategy. The
business atmosphere is highly sensitive and complex in nature.
 PEST denotes Political, Economical, Social and Technological factors directly
impact on the business. These are essential factors should be considered while
framing the strategy.
 The success of strategic decisions is mainly depending on these factors. Political
factors are considered rules and regulation, legislatures, and environmental norms
etc.

20. 4. Benchmarking:
 It is technique of strategic evaluation to identify whether the organization is
achieved the expected results or not. If it is failed to achieve the expected result, then
what is the difference between actual result and expected result.
 The organization must set the Standard performance is benchmark for the measuring
actual performance. The regular monitoring and measuring the performance of
strategic plan and collection of data that indicates actual result of the given activity
and set the benchmark of activity.

21.  “You can’t manage what you don’t measure”. Peter Drucker.
 “Unless strategy evaluation is performed seriously and
systemically and unless strategies are willing to act on the
results energy will or will to work on exploiting today let
alone to work on marking tomorrow”. Peter Drucker