STRATEGIC EVALUATION

PRESENTED BY,
POORNIMA V
NITHYA MOHANAN
LIRIN LEE JOSEPH

DEFINITION: Strategic evaluation is defined as the

process of determining the effectiveness
of a given strategy in achieving the
organizational objectives & taking
corrective actions whereever required.
Final step in SM process.
Evaluation makes sure that the
organizational strategy as well as its
implementation meets the
organizational objectives.

IMPORTANCE OF STRATEGIC
EVALUATION
To test the effectiveness of the strategy.
Helps to know whether the organisational
objectives are achieved with the strategies
adopted.
Performs a crucial task of keeping the
organisation on right track.
In the absence of such mechanism, there
would be no means for strategists to find
out whether or not the strategy is producing
the desired effect.

 Helps to assess whether the

decisions match the intended
strategy requirements.
Provides a considerable amt of
information & experience to
strategists that can be useful in new
strategic planning.
Helps to analyze organisational as
well as financial performance of the
firm.

PARTICIPANTS IN STRATEGIC
EVALUATION

Shareholders
Board of Directors
Chief Executives
Financial controllers
Company secretaries
External & Internal auditors
Middle level managers
Audit & Executive committees.

PROCESS OF STRATEGIC EVALUATION

Fixing bench mark of performance.

What benchmarks to be set?
How to set them & how to express them?
To determine benchmark-Special
requirements for performing the main task.
Quantitative & Qualitative criteria for
assessment of performance.
Quantitative- ROI, EPS, Cost of Pdn..etc..
Qualitative Skills & competencies, risk
taking potential.,etc.

 Measurement of performance
The standard performance is the
benchmark with which the actual
performance is to be compared.
Reporting & communication helps in
measuring the performance.
For measuring performance- financial
statements like B/S, Profit&loss a/c,
must be prepared on annual basis.

 Analyzing Variance
While measuring actual perormance with
std performance, there may be variances
which must be analyzed.
Taking corrective action
Once the deviation in performance is
identified, it is essential to plan for a
corrective action.
If performance < Desired performance,
stategists must carry detailed analysis of
the factors responsible for such
performance.

TECHNIQUES OF STRATEGIC
EVALUATION
GAP ANALYSIS
Measure the gap b/w organisations current
position & its desired position.
Evaluate a variety of aspects of
business,from profit & pdn to marketing, R &
D, MIS.
Financial data is analyzed & compared to
other businesses within the same industry to
evaluate the gap b/w the organisation & its
strongest competitors.

 SWOT ANALYSIS
Evaluates the organisations
strengths, weakness, opportunities &
threats.
SW- Internal factors
OT- External factors.
Helps to determine how to best focus
resources to take advantage of s &
o and combat w & T.

 PEST ANALYSIS
Identify- political, economic,social &
technological factors that may impact
organisations ability to achieve
objectives.
Political factors- financial regulations,
legislation regarding wages & benefits.
Economic factors- all shhifts in economy,
inflation, deflation..
Social factors Demographics & changing
attitudes.
Changes in technology.

 BENCHMARKING
Evaluate how close the organisation has
come to its final objectives,.
Organisations may benchmark
themselves against other organisations
with in the same industry or prior to the
situation.
Variety of performance measures as well
as policies & procedures evaluated
regularly to identify & to maintain
sustainable competitive advantage.