1. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 1 Strategy Evaluation and Control Chapter 7

2. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 2 chapter objectives  after finish chapter student will understand:  The controlling process  What is Key Performance Indicators  How to take action correction?

3. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 3 The Nature of Strategy Evaluation Controlling and evaluation is the last activity in the strategic management process. Most strategists agree, therefore, that strategy evaluation is vital to an organization’s well-being, timely evaluation can alert management to problem or potential problems before a situation become critical. 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.

4. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 4 The Process of Evaluation Strategies Set performance standard Measure Performance Compare actual work Determine Deviation Standards Within limit? Continues works No Yes Take Correction action

5. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 5 Key Performance Indicators (KPIs) -Key performance indicators are quantifiable measurements that reflect the critical success factors of an organization. -In order to set performance standards according to the controlling process mentioned above, strategist should established KPI to measure the organization implementation. -4 KPI should be consider during evaluation: -Financial Perspective -Customer Perspective -Internal Process Perspective -Learning and Growth Perspective

6. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 6 Financial Perspective  Return of Investment  Revenues  Cost per Unit  asset utilization  Unit cost...

7. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 7 Customer Perspective  Firms should realize that its revenue comes from their customers who willing to pay for firms value. market share customer retention customer acquisition customer satisfaction

8. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 8 Internal Process Perspective  Customer satisfaction to our products or services come from employee’s effort.  employee willing to work according to better work environment.

9. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 9 Learning and growth perspective  Organization capabilities  competencies We can measure by:  Employee skills  Attitude  employee turnover  employee satisfaction ...

10. Strategic Management: Chapter 7 Basic Strategy Evaluation and Control Page 10 The final strategy evaluation activity, taking corrective action, requires making changes to reposition a firm competitively for the future. Examples of changes that may needed are alerting an organization’s structure, replacing one or more key individuals, selling a division, or revising a business mission. Other changes could include establishing or revising objectives, devising new policies, issuing stock t raise capital, adding additional salespersons, allocating resources differently, or developing new performance incentives.  Taking Corrective Actions