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Chapter 9 Strategy Monitoring, : - Coggle Diagram
Chapter 9 Strategy Monitoring
9.1 Strategy Evaluation (Three basic activities:)
Examine the underlying bases of a firm’s strategy.
Compare expected results with actual results.
Take corrective actions to ensure that performance conforms to plans.
9.2 Strategy Evaluation Criteria
Consonance
Consistency
Advantage
Feasibility
9.3 Why Strategy Evaluation is More Difficult Today
A dramatic increase in the environment’s complexity
The increasing difficulty of predicting the future with accuracy
The increasing number of variables
The rapid rate of obsolescence of even the best plans
The increase in the number of both domestic and world events affecting organizations
The decreasing time span for which planning can be done with any degree of certainty
9.4 The Process of Evaluating Strategies
Strategy evaluation should
Initiate managerial questioning of expectations and assumptions
Trigger a review of objectives and values
Stimulate creativity in generating alternatives and formulating criteria of evaluation.
Evaluating strategies on a continuous rather than on a periodic basis
Allows benchmarks of progress to be established
More effectively monitored
Successful strategies combine patience with a willingness to promptly take corrective actions when necessary.
9.5 Reviewing Bases of Strategy
How have competitors reacted to our strategies?
How have competitors’ strategies changed?
Have major competitors’ strengths and weaknesses changed?
Why are competitors making certain strategic changes?
Why are some competitors’ strategies more successful than others?
How satisfied are our competitors with their present market positions and profitability?
How far can our major competitors be pushed before retaliating?
How could we more effectively cooperate with our competitors?
9.6 Measuring Organizational Performance (Strategists use common quantitative criteria to make three critical comparisons:)
Comparing the firm’s performance over different time periods
Comparing the firm’s performance to competitors’
Comparing the firm’s performance to industry averages
9.7 Key Questions to Address in Evaluating Strategies
How good is the firm’s balance of investments between high-risk and low-risk projects?
How good is the firm’s balance of investments between long-term and short-term projects?
How good is the firm’s balance of investments between slow-growing markets and fast growing markets?
How good is the firm’s balance of investments among different divisions?
To what extent are the firm’s alternative strategies socially responsible?
What are the relationships among the firm’s key internal and external strategic factors?
How are major competitors likely to respond to particular strategies?
9.9 Contingency Planning:
alternative plans that can be put into effect if certain key events do not occur as expected.
If demand for our new product exceeds plans, what actions should our firm take to meet the higher demand?
If certain disasters occur, what actions should our firm take?
If our sales objectives are not reached, what actions should our firm take to avoid profit losses?
If a new technological advancement makes our new product obsolete sooner than expected, what actions should our firm take?
If a major competitor withdraws from particular markets as intelligence reports indicate, what actions should our firm take?
9.8 Characteristics of an Effective Evaluation System:
Strategy evaluation activities must be economical
Activities should provide timely information
Activities should be meaningful that should specifically relate to a firm’s objectives.
Activities should be designed to provide a true picture of what is happening
Activities should not dominate decisions
10.0Effective Contingency Planning
Determine the expected pros and cons of each contingency event.
Develop contingency plans for key contingency events.
Determine when the good and bad events are likely to occur.
Determine early warning trigger points for key contingency events.
Identify both good and bad events that could jeopardize strategies.
10.1 Twenty-First-Century Challenges in Strategic Management
Deciding whether strategies should be visible or hidden from stakeholders
Deciding whether the process should be more top-down or bottom-up in their firm
Deciding whether the process should be more an art or a science
10.2 Guidelines for Effective Strategic Management
Keep the process simple and easily understandable.
Eliminate vague planning jargon.
Keep the process nonroutine; vary assignments, team membership, meeting formats, settings, and even the planning calendar.
Welcome bad news and encourage devil’s advocate thinking
Do not allow technicians to monopolize the planning process.
To the extent possible, involve managers from all areas of the firm.
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