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Examine the underlying bases of a firm’s strategy Compare expected to actual results

Strategy Review, Evaluation & Control. Examine the underlying bases of a firm’s strategy Compare expected to actual results Identify corrective actions to ensure that performance conforms to plans. 3 Basic Activities. CAUSAL LINKAGE IN STRATEGY IMPLEMENTATION. LEAD INDICATORS.

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Examine the underlying bases of a firm’s strategy Compare expected to actual results

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  1. Strategy Review, Evaluation & Control • Examine the underlying bases of a firm’s strategy • Compare expected to actual results • Identify corrective actions to ensure that performance conforms to plans 3 Basic Activities

  2. CAUSAL LINKAGE IN STRATEGY IMPLEMENTATION LEAD INDICATORS FINANCIAL OUTCOME WORK BEHAVIOUR AND PERFORMANCE PROCESS EFFECTIVENESS/EFFICIENCY VALUE DELIVERY FINAL OUTCOME: LAGGARD INDICATOR

  3. DEVELOPING THE BSC:THE FOUR PERSPECTIVES FINANCIAL PERSPECTIVE CUSTOMER PERSPECTIVE INTERNAL PROCESS PERSPECTIVE LEARNING AND GROWTH PERSPECTIVE ABOVE RELATIONSHIP CHARTED IN A STRATEGY MAP

  4. ACHIEVE PROFITABILITY Financial F2: Achieve BudgetedPrdctn Volume F3: Attain Sales At Budgeted Level F1: Reduce Total Cost By 6% Customer C1: Increase Value Add To Customer By Providing Technical Assistance C2: Satisfy Customer By Delivering Quality Internal Process IP2: Improve HR Morale & Productivity IP1: Reduce Plant Turnaround Time IP4: Create Technical Support Team IP5: Install Quality Mgt System IP3: Improve Logistic Cost Learning L3: Acquire Knowledge On Customers’ Technologies L1: Improve Skills Related To Plant Turnaround L2: Improve Supervisory Skills L4: Dvlp Quality Troubleshooting Skills CRISIS PETCHEM SDN BHD STRATEGY MAP

  5. Strategy Review, Evaluation, & Control Consistency Rumelt’s4 Criteria Consonance Feasibility Advantage

  6. Strategy Review, Evaluation, & Control Monitor Strengths & Weaknesses; Opportunities & Threats • Are strengths still strengths? • Have we added additional strengths? • Are weaknesses still weaknesses? • Have we developed other weaknesses? • Are opportunities still opportunities? • Other opportunities develop? • Are threats still threats • Other threats emerged? • Are we vulnerable to hostile takeover?

  7. Strategy Review, Evaluation, & Control Key Financial Ratios • Return on investment (ROI) • Return on equity (ROE) • Profit margin • Market Share • Debt to equity • Earnings per share (EPS) • Sales growth • Asset growth

  8. RISK-RETURN GRAPH HI-TECH INVESTMENTS RISK ABOVE NORMAL UNIT TRUST BONDS AND FD 4-6% 10-15% 20-30%

  9. Strategy Review, Evaluation,& Control Alternative plans that can be put into effect if certain key events do not occur as expected • Respond to problems as well as opportunities Contingency Planning

  10. WHAT YOU SHOULD HAVE UNDERSTOOD? • THE INTERLINKAGE BETWEEN INTERNAL CAPABILITIES AND OUTCOME • LEAD AND LAGGARD MEASURES • THE ROLE OF THE BALANCED SCORECARD AS A STRATEGY IMPLEMENTATION AND EVALUATIONTECHNIQUE • SOME BASIC ISSUES IN EVALUATING FINANCIAL PERFORMANCE

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