STRATMA

advantage

A strategy must provide for the creation or maintenance of a --- in a selected area of activity. Competitive advantages normally are the result of superiority in one of three areas: (1) resources, (2) skills, or (3) position.

(1) external and internal factors have not significantly changed and •(2) the firm is progressing satisfactorily toward achieving stated objectives.

Corrective actions are almost always needed except when:•

consistency, consonance, feasibility, and advantage.

Criteria for Evaluating Strategies

consistency

Organizational conflict and interdepartmental bickering are often symptoms of managerial disorder, but these problems may also be a sign of strategic inconsistency.

opportunity

Strategists need to create an organizational culture where strategy evaluation is viewed as an ---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.

Strategy Monitoring

The best formulated and best implemented strategies become obsolete as a firm's external and internal environments change.•It is essential, therefore, that strategists systematically review, evaluate, and control the execution of strategies.

measuring organizational performance

This activity includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives. Both long-term and annual objectives are commonly used in this process.

Contingency plans

can be defined as alternative plans that can be put into effect if certain key events do not occur as expected

Auditing

defined by the American Accounting Association (AAA) as "a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria, and communicating the results to interested users.

Adequate and timely feedback

is the cornerstone of effective strategy evaluation.

Richard Rumel

offered four criteria that could be used to evaluate a strategy: consistency, consonance, feasibility, and advantage

Consonance

refers to the need for strategists to examine sets of trends, as well as individual trends, in evaluating strategies. A strategy must represent an adaptive response to the external environment and to the critical changes occurring within it

taking corrective actions

requires making changes to competitively reposition a firm for the future. •The probabilities and possibilities for incorrect or inappropriate actions increase geometrically with an arithmetic increase in personnel.

strategic-management process

results in decisions that can have significant, long-lasting consequences.

revised IFE Matrix

should focus on changes in the organization's management, marketing, finance and accounting, production and operations, research and development (R&D), and management information systems (MIS) strengths and weaknesses.

revised EFE Matrix

should indicate how effective a firm's strategies have been in response to key opportunities and threats.

Strategy evaluation

should initiate managerial questioning of expectations and assumptions, should trigger a review of objectives and values, and should stimulate creativity in generating alternatives and formulating criteria of evaluation.

Balanced Scorecard

strategy evaluation and control technique. derives its name from the perceived need of firms to "balance" financial measures that are oftentimes used exclusively in strategy evaluation and control with nonfinancial measures such as product quality and customer service

feasibility

thatis, can the strategy be attempted within the physical, human, and financial resources of the enterprise?