Strategy Review, Evaluation, &

Control

Usman Chaudhry
 Strategy Evaluation

Organizations are most vulnerable when they are at the peak

of their success
R.T. Lenz

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Strategy Evaluation
• Vital to the organization’s well-being
• Alert management to potential/actual problems in a timely
fashion
• Wrong strategic decisions can have severe negative impact
on organizations

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Consistency

Consonance
Richard Rumelt’s
4 Criteria
Feasibility

Advantage
Usman Chaudhry - FSM
 Strategy Review, Evaluation, &
Control

Consistency
• Strategy should not present inconsistent goals & policies
• If managerial problem continues despite changes in personnel
• If success for one department means failure for another department
• If policy problems/issues continue to be brought to the top for
resolution

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Consistency

Rumelt’s Consonance
4 Criteria
Feasibility

Advantage
Usman Chaudhry - FSM
 Strategy Review, Evaluation, &
Control

Consonance
Need for strategies to examine sets of trends as well as
individual trends

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Consistency

Consonance
Rumelt’s
4 Criteria
Feasibility

Advantage
Usman Chaudhry - FSM
 Strategy Review, Evaluation, &
Control

Feasibility
Can the strategy be attempted within the physical, human and
financial resources of the enterprise?

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Consistency
Rumelt’s Consonance
4 Criteria

Feasibility

Advantage
Usman Chaudhry - FSM
 Strategy Review, Evaluation, &
Control
Advantage
Creation or maintenance of competitive advantage
• Resources
• Skills
• Position

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Strategy Evaluation Should

• Initiate managerial questioning
• Trigger review of objectives & values
• Stimulate creativity in generating alternatives

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Review of Underlying Bases of Strategy

• Develop revised EFE Matrix

• Develop revised IFE Matrix

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Review Effectiveness of Strategy

1. Competitors’ reaction to strategy
2. Competitors’ change in strategy
3. Competitors’ changes in strengths & weaknesses
4. Reasons for competitors’ successful strategies
5. Competitors’ present market positions & profitability
6. Potential for competitor retaliation
7. Potential for cooperation with competitors

Usman Chaudhry - FSM

 Evaluation Framework

Review Underlying Basis (Compare Revised & Existing IFE/EFE)

• If you find Differences then take Corrective Action otherwise

move to;

Measure Firm Performance

• If you find Difference then take Corrective Action otherwise move

to;

Continue Present Course

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Quantitative Criteria for Strategy Evaluation

Financial Ratios
• Compare performance over different periods
• Compare performance to competitors
• Compare performance to industry averages

Usman Chaudhry - FSM

 Strategy Review, Evaluation, &
Control

Qualitative Evaluation of Strategy

• Internal consistency of strategy
• Consistency with environment
• Appropriateness in view of resources

Usman Chaudhry - FSM

 Balanced Scorecard

Organizations use BSC to:

 Communicate what they are trying to accomplish
 Align the day-to-day work that everyone is doing with strategy
 Prioritize projects, products, and services
 Measure and monitor progress towards strategic targets

Evaluate strategies from 4 perspectives:

1. Financial performance
2. Customer knowledge
3. Internal business processes
4. Learning & growth
Usman Chaudhry - FSM
 Balanced Scorecard

Objectives Measures Targets Initiatives

Financial

Customers

Internal
Business
Processes
Learning and
Growth

Usman Chaudhry - FSM