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Strategy Evaluation

Strategic evaluation has become important for assessing business performance relative to goals in dynamic environments where factors change quickly. It allows organizations to reflect on achievements and shortcomings, and reexamine goals set under different circumstances. Frequent strategy evaluation ensures present success continues for organizations in turbulent industries like technology and communications facing short product life cycles and fast technological advancement. A balanced scorecard measures strategic performance across financial, customer, internal process, and learning/growth perspectives to identify areas for improvement through quantitative data collection and informed decision making.

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Jan Gelera
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147 views

Strategy Evaluation

Strategic evaluation has become important for assessing business performance relative to goals in dynamic environments where factors change quickly. It allows organizations to reflect on achievements and shortcomings, and reexamine goals set under different circumstances. Frequent strategy evaluation ensures present success continues for organizations in turbulent industries like technology and communications facing short product life cycles and fast technological advancement. A balanced scorecard measures strategic performance across financial, customer, internal process, and learning/growth perspectives to identify areas for improvement through quantitative data collection and informed decision making.

Uploaded by

Jan Gelera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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1. Why has strategy evaluation become so important today?

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. Also, it is important because organizations face dynamic
environments in which key external and internal factors often change quickly and dramatically.
With shorter, product life cycles and product development cycle, faster/ increase in
technological advancement, change occurs much faster than it did in today’s business world,
plus there are more competitors, and foreign companies are becoming stronger in the world
market. Strategy evaluation is viewed as an opportunity to make the firm better, so the firm can
compete better, so everyone in the firm can do better, sharing in the firm’s increased
profitability.
2. As owner of a local, independent supermarket, explain how you would evaluate the firm's
strategy?
As an owner of a local, independent supermarket, the  strategy evaluation is less formal than as
compare to the large  or big organization. However, both qualitative and quantitative criteria
should be used to evaluate the small supermarket’s strategies, because large supermarket
stores that offer one-stop shopping for virtually everything are proliferating across the country.
3. Identify the type of organizations that may need to evaluate strategy more frequently than
others.  Justify your choices.

Organizations that compete in more turbulent industries may need to evaluate strategies more
often than others. Several examples of turbulent industries are the computer industry, the
communications industry, and the aerospace industry. These types of business are the ones
with shorter, product life cycles and product development cycle, faster/ increase in
technological advancement, change occurs much faster than it did in today’s business world,
plus there are more competitors, and foreign companies are becoming stronger in the world
market. This means that these organizations face dynamic environments in which key external
and internal factors often change quickly and dramatically. Hence, a frequent strategy
evaluation may ensure that the present success of the organization/company will ensue.

4. As owner of a chain of hardware stores, describe how you would approach contingency
planning.
I would plan for the “what if” scenario. I would prepare for a possibility of how to deal with
unusual events. Below are my contingency planning steps:

Risk Probability Contingency Plan

People Related Risks (Internal) Employees should be cross-


High trained at different jobs so that
o Illness or Injury they can act as a back-up for
o Non-adherence to each other in case of absence
established procedures due to illness, etc.

o Shortage of training in Regular medical check-ups


established procedures should be arranged for the
employees
o Unpleasant working
conditions

o Deliberate or Negligent acts

People Related Risks (External)


Medium Establish security protocol and
o Intrusion alarm systems.
o Kidnapping or extortion
o Theft of equipment, etc

Utility Related Risk Fire detection and suppression


Medium equipment, e.g. smoke
o Electricity failure detectors, fire extinguishers,
o Communication Halon, etc. should be placed at
failure all vulnerable locations
o Equipment failure
o Software failure Main and Back-up Hardware
systems, printers and
workstations should be serviced
and maintained regularly

Neighborhood Hazards
Medium Cooperate with the police
o Proximity to chemical or
explosive operations department regarding safety
o Nearby building or floor that protocols.
constitutes a fire hazard to the Fire detection and suppression
operation. equipment, e.g. smoke
o Potential risk of leakage or detectors, fire extinguishers,
burst in the water pipes on the Halon, etc. should be placed at
premises. all vulnerable locations
o High crime areas.

Natural Disaters
Low Establish line of communication
o Heavy rains/flooding with the local government for
o Earthquake rescue and evacuation
o Forest fires operations.
o Typhoon

5. Explain and discuss the Balance Scorecard.  Provide one example of any industry of your
choice.
A balanced scorecard is a strategic management performance metric used to identify and
improve various internal business functions and their resulting external outcomes. They are
used to measure and provide feedback to organizations. Data collection is crucial to providing
quantitative results as managers and executives gather and interpret the information and use it
to make better decisions for the organization.
The overall aim of the Balanced Scorecard is to “ balance” shareholder objectives with
customer and operational objectives. Its concept is consistent with the notions of continuous
improvement in management (CIM) and total quality management (TQM). The basic premise is
that firms should establish objectives and evaluate strategies on criteria other than financial
measures. The Balanced Scorecard is an important strategy-evaluation tool that allows firms to
evaluate strategies from four perspectives: financial performance, customer knowledge,
internal business processes, and learning and growth. Its analysis requires that firms seek
answers to the following questions and use that information, in conjunction with financial
measures, to adequately and more effectively evaluate strategies being implemented:

1. Is the firm continually improving and creating value along measures such as innovation,
technological leadership, product quality, operational process efficiencies, and so on?
2. Is the firm sustaining and even improving on its core competencies and competitive
advantages?
3. How satisfied are the firm’s customers?
Example of a Balance Scorecard: UST Hospital

Area of Objectives Measure of Target Time Expectation Primary Responsibility


Customers
Quality, convenient and Applicable to all
compassionate medical patients everyday All hospital personnel
care 100% customer to be gracious and
Quality care with access satisfaction accommodating to
to cutting edge tools and everyone
support staff
Improve overall customer
satisfaction
Organizational Capacity
Provide unparalleled The hospital
clinical care for patients administration
Conduct cutting edge Creation of supports the medical
research Research and annually staff participation to
Continuous development Development conferences locally
of medical staff and future Center and abroad. Also, the
staff administration
monitors the research
output/publication as
measured by impact
factor.
Operation/Internal
Process
Improve access for Development of
patients and referring specialized centers Administration,
MDs within the hospital annually medical staff,
Attract research funding and access to the marketing department
Achieve best clinical hospital through
outcomes social media and or
telemedicine
referral system
Financial
Grow revenue Increase revenue Administration,
Mange cost every year annually Finance department
Attract investors

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