DON HONORIO VENTURASTATE UNIVERSITY
GRADUATE SCHOOL
Villa De Bacolor, Pampanga, Philippines
NARRATIVE REPORT
Chapter 9
STRATEGY REVIEW, EVALUATION AND CONTROL
Submitted to:
Dr. Ma. Antonette Morales Guinto
Strategic Management Professor
Submitted by:
Manese, Ralph Chandrai A.
Pare, Vina Marie T.
Pecson, Janine Ciara S.
Quiambao, Marizzel B.
Salvador, Sheena D.
Page 1 of 29
Table of Contents
A. STRATEGY EVALUATION PROCESS, CRITERIA AND METHODS4
STRATEGY EVALUATION4
THREE BASIC ACTIVITIES4
COMPREHENSIVE STRATEGIC MODEL4
THE PROCESS OF EVALUATION STRATEGIES4
● RUMELT’S CRITERIAL FOR EVALUATING STRATEGIES5
a. Consistency5
b. Consonance5
c. Feasibility5
d. Advantage5
APPLICATION (JOLLIBEE FOODS CORPORATION) 6
● JFC MISSION6
● FSC STANDARD6
● INTERNAL FACTORS6
● Mystery Shopper6
● FSC Audit6
● EXTERNAL FACTOR8
B. THREE STRATEGY-EVALUATION ACTIVITIES9
TABLE 1: STRATEGY EVALUATION ASSESSMENT MATRIX10
1. REVIEWING THE BASES OF STRATEGY11
2. MEASURING ORGANIZATIONAL PERFORMANCE12
●
FINANCIAL RATIOS TO MAKE THREE CRITICAL
COMPARISONS12
a. Compare the firm’s performance over different time periods12
b. Compare the firm’s performance to competitors12
c. Compare the firm’s performance to industry averages12
● APPLICATION (PSHS-CLC) 12-13
● FRAMEWORK FOR MEASURING ORGANIZATIONAL
PERFORMANCE13
● PROBLEMS WITH QUANTITATIVE CRITERIA14
● QUALITATIVE CRITERIA14
3. TAKING CORRECTIVE ACTION15
● THE STRATEGY EVALUATION FRAMEWORK16
C. PUBLISHED SOURCES OF STRATEGY-EVALUATION INFORMATION17-18
D. CHRACTERISTICS OF AN EFFECTIVE STRATEGY EVALUATION19-20
● BASIC REQUIREMENTS FOR EFFECTIVE STRATEGY
EVALUATION19-20
a. Economical19
b. Meaningful19
c. Timely Information19
Page 2 of 29
d. True Picture19-20
e. Facilitate action and be directed20
f. Not dominate Decisions20
g. Simple20
E. BALANCE SCORECARD20
THREE (3) COMPONENTS OF BALANCE SCORECARD21
● FOUR (4) PERSPECTIVE OF BALANCE SCORECARD21
a. Financial Perspective21
b. Customer Perspective21-22
c. Internal Process Perspective22
d. Learning and Growth Perspective22
STRATEGY MAP23
SCORING THE BALANCE SCORECARD23-25
F. CONTINGENCY PLANNING26
CONTINGENCY PLAN COMMONLY USED BY FIRMS26-27 MAJOR
BENEFITS OF HAVING A CONTINGENCY PLAN27
SEVEN-STEP PROCESS FOR CONTINGENCY PLANNING27-28
APPLICATION (RDF) 28
Page 3 of 29
CHAPTER 9: STRATEGY REVIEW, EVALUATION AND CONTROL
A. THE STRATEGY EVALUATION PROCESS, CRITERIA AND METHODS
STRATEGY EVALUATION
🞂 vital to an organization’s well-being; timely evaluations can alert management to
problems or potential problems before a situation becomes critical.
Strategy Evaluation Process
THREE BASIC ACTIVITIES
1. Examine the underlying bases of a firm’s strategy
2. Compare expected results with actual results.
3. Take corrective actions to ensure that performance conforms to plans.
COMPREHENSIVE STRATEGIC MANAGEMENT MODEL
Page 4 of 29
THE PROCESS OF EVALUATING STRATEGIES
RUMELT’S CRITERIA FOR EVALUATING STRATEGIES
a. CONSISTENCY
It is important to strive for consistency when setting goals and policies. Organizational
conflict and interdepartmental bickering are often symptoms of managerial disorder, but these
problems may also be a sign of strategic inconsistency. Three guidelines help determine if
organizational problems are the result of inconsistencies in strategy:
🞂 If managerial problems continue despite changes in personnel and if they tend to be
issue-based rather than people-based, then strategies may be inconsistent.
🞂 If success for one organizational department means, or is interpreted to mean, failure for
another department, then strategies may be inconsistent.
🞂 If policy problems and issues continue to be brought to the top for resolution, then
strategies may be inconsistent.
b. 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.
c. FEASIBILITY
The final broad test of strategy is its feasibility; In evaluating a strategy, it is important to
examine whether an organization has demonstrated in the past that it possesses the abilities,
competencies, skills, and talents needed to carry out a given strategy.
d. ADVANTAGE
Page 5 of 29
A strategy must provide for the creation or maintenance of a competitive advantage 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.
JOLLIBEE FOOD CORPORATION
MISSION
To serve great tasting food, bringing the joy of eating to everyone
FSC STANDARD
🞂 FOOD
- Served to the public must meet the company's excellence standards or it will not be
served at all.
🞂 SERVICE
- Must be fast and courteous
🞂 CLEANLINESS
- From kitchen to utensils, must always be maintained. Jollibee is proud of its
employees who carry out their jobs.
INTERNAL FACTORS
MYSTERY SHOPPER
🞂 DINING CREW MUST GREET THE MS UPON ENTERING THE STORE
🞂 CASHIER- SECONDS MUST DO UPSELLING AND SUGGESTIVE SELLING
🞂 CORRECT AND CLEAN PLATING
🞂 CLEAN DINING FLOOR
🞂 CLEAN COMFORT ROOM
Page 6 of 29
🞂 CLEAN AND NEAT UNIFORM FOR CREWS AND MANAGERS
🞂 MUST HAVE MANAGER ON DUTY IN THE DINING AREA
🞂 BUZZING
INTERNAL FACTORS
FSC AUDIT
FOOD
🞂 TEMPERATURE
🞂 APPEARANCE
🞂 PORTIONING
🞂 TEXTURE
🞂 TASTE AND AROMA
SERVICE
🞂 CORRECT POSITIONING AND MANNING
🞂 STANDARD EQUIPMENT
🞂 MERCHANDISING EQUIPMENT
🞂 EXCEPTIONAL CUSTOMER SERVICE
🞂 PEOPLE SERVICE IMAGE
Page 7 of 29
🞂 DINING TASK
🞂 SPEED MEASUREMENT
CLEANLINESS
🞂 OUTSIDE STORE
🞂 DINING AND FUNCTION AREA
🞂 CUSTOMER RESTROOM
🞂 COUNTER
🞂 KITCHEN AND BACKUP
🞂 STOCKROOM AND OTHER ROOMS
🞂 FACILITIES
🞂 UTILITY ROOM/CLEANING SUPPLIES, EQUIPMENT AND FIXTURE
EXTERNAL FACTORS
CUSTOMERS FEEDBACK
❑ MINOR
❖ PRODUCT AVAILABILITY
❖ STREET CHILDREN ASKING FOR MONEY INSIDE STORE OR DRIVE
THRU
Page 8 of 29
❖ SENIOR AND PWD NOT DISCOUNTED
❖ FORGOT TO INCLUDE SPOON AND FORK, KETCHUP AND HOT SAUCE
FOR TAKE OUT ORDER
❑ MAJOR COMPLAIN
🞂 RUDE BEHAVIOR OF MANAGER AND CREW
🞂 MISSED OUT ADVANCE ORDER
🞂 WRONG ITEM
🞂 MISSED ITEM
🞂 Unclean and unmaintained customer restroom and handwashing facilities
🞂 Foul odor in any part of the store
❑ CRITICAL COMPLAIN
🞂 FOOD SAFETY
🞂 JOLLY TOWEL
🞂 LATE DELIVERY
Page 9 of 29
B. THREE STRATEGY-EVALUATION ACTIVIES
Reported by: Janine Ciara S. Pecson
Strategic Evaluation is the third and final stage of strategic management process. This is
the stage where we can discern whether the formulated and implemented strategies worked
according to our expectations and were able to contribute to achieve the determined
organizational objectives. Furthermore, the strategic evaluation process involves your analyzing
your strategic plan and assessing how well you’ve done against achieving goals in your strategy;
measuring the effectiveness of the implemented strategies and determine the realized and
unrealized objectives of the organization.
The strategic positioning of the organization forms an integral part of the strategy
evaluation. Strategic position is the position of the business in relation to the market and
competitors. It informs the strategic choices that need to be made and subsequently implemented.
The strategic position is concerned with the impact on the strategy of the external environment,
internal resources and competencies, and the expectations and influence of stakeholders. A
consideration of the environment, strategic capability, expectations, and purpose within an
organization provides a basis for understanding the strategic position of an organization. A
strategic position is simply the view of a company that results from its strategy-driven
decision-making.
There is a need to understand the organization’s strategic position to conduct a strategic
evaluation and have a better assessment on what appropriate actions an organization must
undertake.
There are three strategy evaluation activities that will help the organization monitor and
addressed the organization's actions.
Page 10 of 29
THE THREE STRATEGY EVALUATION ACTIVTIES:
1. Reviewing Bases of Strategy
2. Measuring Organizational Performance
3. Taking Corrective Action
Depending on the result of the three evaluation activities, the organization may revisit the
strategies and objectives, optimize the strategies, change the strategies totally and retain the
current strategy without changing anything.
The strategy evaluation matrix summarizes the three strategy-evaluation activities in
terms of key questions that need to be addressed. What are the appropriate actions an
organization must take as a response to the formulated and implemented strategies? The
strategy-evaluation assessment matrix can be used to address this question:
TABLE 1: STRATEGY-EVALUATION ASSESSMENT MATRIX
Notice in the Strategy-Evaluation Assessment Matrix that corrective actions are almost
always needed except when (1) external and internal factors have not significantly changed and
(2) the firm is progressing satisfactorily toward achieving stated objectives.
Page 11 of 29
1. REVIEWING THE BASES OF STRATEGY
Reviewing the underlying bases of an organization’s strategy could be approached by
developing a revised Matrix and IFE Matrix. A revised IFE Matrix should focus on changes in
the organization's management, marketing, finance/accounting, production/operations, R&D, and
computer information systems strengths and weaknesses. A revised EFE Matrix should indicate
how effective a firm's strategies have been in response to key opportunities and threats.
The Internal factors and external factors are the roots of present strategies. Externally,
actions by competitors, changes in demand, changes in technology, economic changes,
demographic shifts, and governmental actions.
Since change is constant, organizations should continually monitor internal and external
events and trends so that timely changes can be made as needed. External and Internal Factors
can prevent firms from achieving long-term and annual objectives.
This analysis could also address such questions as the following:
1. How have competitors reacted to our strategies?
2. How have competitors' strategies changed?
3. Have major competitors' strengths and weaknesses changed?
4. Why are competitors making certain strategic changes?
5. Why are some competitors' strategies more successful than others?
6. How satisfied are our competitors with their present market positions and
profitability?
7. How far can our major competitors be pushed before retaliating?
8. How could we more effectively cooperate with our competitors?
External opportunities and threats and internal strengths and weaknesses that represent
the bases of current strategies should continually be monitored for change. It is not really a
question of whether these factors will change, but rather when they will change and in what
ways. Some key questions to address in evaluating strategies are given here.
1. Are our internal strengths still strengths?
2. Have we added other internal strengths? If so, what are they?
3. Are our internal weaknesses still weaknesses?
4. Do we now have other internal weaknesses? If so, what are they?
5. Are our external opportunities still opportunities?
6. Are there now other external opportunities? If so, what are they?
Page 12 of 29
7. Are our external threats still threats?
8. Are there now other external threats? If so, what are they?
9. Are we vulnerable to a hostile takeover?
CONCLUSION:
In this activity you will need to prepare a revised IFE and EFE Matrix which will be then
compared to existing IFE Matrix and EFE Matrix that was identified during the strategy
formulation. From those comparison if there are major changes corrective action is needed to
address those changes.
2. MEASURING ORGANIZATIONAL PERFORMANCE
Measuring performance is a vital part of monitoring an organization’s progress 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.
Performance evaluation is to determine if plans have been successful and identify any
changes that might be necessary. It is an analysis used to develop improved plans and objectives
to keep the firm on track to fulfill its mission and improve their overall performance.
Performance measurement comes in many forms, from financial reports to quality
measures. Any activity a firm can have a performance measure developed to evaluate the success
of that activity.
Financial Ratios to make three critical comparisons:
1. Compare the firm’s performance over different time periods.
Includes measuring performance that may be in a form of sales, revenue, income, and
profit margins that should be on a daily, weekly, monthly, or annual basis. The
deciding factor on when we should evaluate depends on how important the objective
is to the organization, how quickly the situation might change, and how difficult or
costly it would be to fix a problem once it has occurred.
2. Compare the firm’s performance to competitors.
3. Compare the firm’s performance to industry averages.
Use financial ratios to evaluate companies and make comparisons between companies
within an industry to determine its position. (e.g.: profitability ratios, debt or leverage
ratios, operations ratios based on the financial statement of the companies)
APPLICATION:
I applied the Framework for Measuring Organizational Performance in my work setting. I
am currently employed as an Administrative Officer III designated as the Supply and Property
Page 13 of 29
officer in Philippine Science High School – Central Luzon Campus; a school dedicated in
offering secondary education with an emphasis on STEM (Science, Technology, Engineering,
and Mathematics) aimed at preparing students to become globally competitive Filipino science
and technology leaders and professionals.
Philippine Science High School (PSHS) was established by the Republic Act (RA) 3661,
also known as the PSHS Charter, which was signed into law in 1964 by President Diosdado
Macapagal. This charter mandates the PSHS to a secondary course with emphasis on subjects
pertaining to service offered on a free scholarship basis with the end in view of preparing its
students for a science career.
Philippine Science High School offers a 6-year scholarship (Junior and Senior High
School).
Based on the applied framework organizational performance (See Table 2), the Philippine
Science High School Central Luzon Campus has an over-satisfactory performance in terms of the
scholarship programs it caters to.
TABLE 2:
FRAMEWORK FOR MEASURING ORGANIZATIONAL PERFORMANCE
Page 14 of 29
Factor refers to the criteria. The factor or performance measure were aligned on the
purpose, objectives, vision and mission and strategies implemented.
Actual result refers to the outcome or performance of the company based on strategies
implemented.
Expected result may be considered as a set of predetermined tolerance limit/standard
limit that can be used to determine whether the results can be accepted satisfactorily.
Variance is the difference between the actual result and the expected result. If the actual
performance deviates from the standard limit, the performance can be considered as acceptable,
and the variance is insignificant. On the other hand, if the performance is below standards, effort
must be directed to finding the root causes of the deviation and coming up with corrective action
to fix it.
ANALYZE VARIANCES
Evaluating the actual result against the standards or expected result will reveal whether:
a. The actual results matched the expected result
b. The actual results differ from the expected result in a positive way
c. The actual results differ from the expected result in a negative way
PROBLEMS WITH QUANTITAVE CRITERIA
a. Most quantitative criteria are geared to annual objectives rather than long term
objectives.
b. Different accounting methods can provide different results on many quantitative
criteria
c. Intuitive judgements are almost always involved in deriving quantitative judgement.
Qualitative criteria are important in evaluating strategies. Human factors can be
underlying causes of declining performance
a. High absenteeism and turnover rates
b. Poor production quality and quantity rates
c. Low employee satisfaction
d. Marketing, finance and accounting, R&D, or MIS factors can also cause financial
problems
Some additional key questions that reveal the need for qualitative judgments in strategy
evaluation are as follows:
Page 15 of 29
1. How good is the firm’s balance of investments between high-risk and low-risk
projects?
2. How good is the firm’s balance of investments between long-term and short- term
projects?
3. How good is the firm’s balance of investments between slow-growing markets and
fast-growing markets?
4. How good is the firm’s balance of investments among different divisions?
5. To what extent are the firm’s alternative strategies socially responsible?
6. What are the relationships among the firm’s key internal and external strategic factors?
7. How are major competitors likely to respond to strategies?
CONCLUSION:
Qualitative criteria are as important as quantitative criteria in measuring an organizational
performance. There must be a counterbalance with the quantitative and qualitative approach in
evaluating strategies. The need for this counterbalance gave rise to the preparation of an
organization of a balance scorecard.
3. TAKING CORRECTIVE ACTION
Aims at rectifying strategies, processes, products, and objectives. Corrective action may
also be in a form of preventive action.
The final strategy-evaluation activity, taking corrective actions, requires making changes
to competitively reposition a firm for the future.
Repositioning refers to the major change in positioning for the brand/product. To
successfully reposition a product, the firm must change the target market’s understanding of the
product. Therefore, repositioning involves completely altering how the target market perceives
the product. Repositioning is often a challenge, especially for brands that are well known to the
public.
Corrective Actions Possibly Needed to Correct Unfavorable Variances:
1. Alter the firm’s structure.
2. Replace one or more key individuals.
3. Divest a division.
4. Alter the firm’s vision or mission.
5. Revise objectives.
6. Alter strategies.
7. Devise new policies.
Page 16 of 29
8. Install new performance incentives.
9. Raise capital with stock or debt.
10. Add or terminate salespersons, employees, or managers.
11. Allocate resources differently.
12. Outsource (or rein in) business functions.
Change is inevitable. No organization can escape change, change is constant, change is
never-ending. Taking corrective actions is necessary to keep an organization on track toward
achieving stated objectives.
Corrective action should place an organization in a better position to capitalize on internal
strength; to take advantage of the external opportunities; to avoid mitigate external threats; and to
improve internal weakness.
THE STRATEGY EVALUATION FRAMEWORK
Page 17 of 29
WHAT IS THE RESULT OF STRATEGY EVALUATION?
Strategy can lead to strategy-formulation and/or strategy-implementation changes or no
changes at all. Strategy evaluation is somehow expensive because of the process of trial and
error.
KEY TAKEAWAYS
Strategy evaluation is sometimes counterproductive. This is due to the resistance in the
organization. Resistance may be based on such feeling as loss of status, implies criticisms of
present competence, and fear of failure on the new situation. Therefore, it is necessary to
overcome such resistance by creating situations of participation and full explanation when
changes are predicted.
Time of the essence is important also in strategy evaluation. As I’ve mentioned before
corrective action is not only focus on rectifying when there are problems identified during the
evaluation, but it may also be in a form a preventive action. Timely evaluation will minimize the
possible problems risk associated with the strategies implemented and our strategy plan.
In reality, strategy is a circular process of constant repetition and evolution. A good
strategy should never really 'end'. Rather, it should morph into something more ambitious and
sophisticated as goals are met.
REFFERENCES:
https://www.cascade.app/blog/strategy-evaluation
https://creately.com/blog/business/strategy-evaluation-process/
https://opentextbc.ca/principlesofmanagementopenstax/chapter/measuring-and-evaluating-strateg
ic-performance/
C. PUBLISHED SOURCES OF STRATEGY-EVALUATION INFORMATION
- Focus primarily on large, publicly held businesses, the comparative ratios and related
information are widely used to evaluate small businesses and privately-owned firms as
well.
- For example, BusinessWorld is the largest selling and the highest circulated business
magazine in the country. It cuts through the clutter of news and provides perspective with
analytical insight.
Page 18 of 29
- The fourth issue of BusinessWorld In-Depth, with the theme “Navigating the Now
Normal”, features the Top 200 Consolidated Corporations in the Philippines. It is a
special edition of BusinessWorld’s Top 1000 Corporations in the Philippines that contains
the top 200 consolidated corporations based on consolidated audited financial statements.
- This issue also includes six feature stories: profile and summary performance of the top
200 and the outlook of these firms for the succeeding year; outlook on the Philippine
economy based on latest projections by financial institutions; the world’s search for a
vaccine and what the global economy needs to do while waiting for said vaccine; the
current conditions in the workplace and what firms must do to manage the workforce in
the so-called “new normal”; and stories about the future of consumption.
- In relation to my example, published by BusinessWorld newspaper the Top 200
corporations in the Philippines by Revenue based on available consolidated financial
statements collected by BusinessWorld as of November 2019. The rankings do not yet
reflect the impact of the economic and health crisis brought by the COVID-19 as these
were based on the firms’ financial performance in the fiscal year 2019.
Philippine Corporations by Revenue Gross Revenue
San Miguel Corp. P1.07 trillion
Top Frontier Investment Holdings, Inc. —
San Miguel’s top shareholder P1.07 trillion
Petron P520.61 billion
SM Investments Corp. P506.3 billion
Ayala Corp. P330.91 billion
Page 19 of 29
- San Miguel Corp. topped the list with P1.07 trillion in gross revenue in 2019, higher by
0.8% from the year before. Top Frontier Investment Holdings, Inc., which is San
Miguel’s top shareholder, and fuel business Petron Corp. occupied the second and third
spots with consolidated gross revenues of P1.07 trillion (up 0.9% year on year) and
P520.61 billion (down 7.7%), respectively. Fourth on the list is Sy-led SM Investments
Corp. with gross earnings of P506.3 billion, up 11.5% from the previous year. Ayala
Corp. and its subsidiaries grabbed fifth spot with P330.91 billion last year, 9.8% more
than their consolidated earnings in 2018.
D. CHARACTERISTICS OF AN EFFECTIVE STRATEGY EVALUATION SYSTEM
As we all know, Strategic management process generates decisions that is why the evaluation
strategy is vital for the well-being of the company or the organization.
Strategy evaluation must meet several basic requirements to be effective, and these are the
characteristics:
1. ECONOMICAL
- Strategy evaluation activities must be economical; too much information can be just
as bad as too little information. Too many controls can do more harm than good. So,
meaning to say, the process should not be made unnecessarily elaborate and incurs
too many costs and evaluation itself. Also, it is better to include those things that are
only necessary with a minimal amount of time, resources, and effort.
2. MEANINGFUL
- Strategy-evaluation activity should be meaningful; they should specifically relate to a
firm’s objectives. The purpose of evaluation must be clear. An evaluation should have
its purpose and significance.
- Example: In our Agency (Government Agency), we have Strategic Performance
Management System (SPMS). This ensures that the employee achieves the objectives
set by the organization and the organization, on the other hand, achieves the
objectives that it has set as its strategic plan. The performance of the office and every
individual are regularly monitored at various levels. Monitoring and evaluation
mechanisms ensure that timely and appropriate steps can be taken to keep a program
on track, and that its objectives or goals are met in the most effective manner.
3. TIMELY INFORMATION
- Strategy-evaluation activities should provide timely information; on occasion and in
some areas, managers may daily need information. The evaluation process should
conform to a proper time dimension for control, and information retrieval or
dissemination. Time dimension of control should coincide with the time span of the
activity or the implementation phase. Also, information on developments or feedback
should be timely to make evaluation and control more appropriate.
Page 20 of 29
- Example: In our office, every Monday I'm giving updates or timely information to my
Supervisor regarding our monthly targets so that before the deadline of the
submission our Supervisor already reviewed our reports and we can submit the
reports on the prescribed time.
4. TRUE PICTURE
- Strategy evaluation activities should be designed to provide true picture of what is
happening. Standards and target must be realistic.
- Example: In a certain company, even if your employees and managers are actually
working hard but still your company has low sales, low productivity, and the
profitability ratios may drop alarmingly, the management must inform its employees
about what is really the status of the establishment. This is somewhat related to being
transparent of the company.
5. FACILITATE ACTION AND BE DIRECTED
- The fifth one is Strategy evaluation process should facilitate action and should be
directed to those individuals of the organization. In other words, to facilitate action is
to make it easier or more likely to happen. In an organization, by putting words into
action, it helps to create solutions especially in tackling complex problems whether
about people, groups, and corporation.
- Example: During our assembly meeting, we raised/tackled some issues and concerns
within our office. It's where actions and decisions are made to solve the problem.
6. NOT DOMINATE DECISIONS
- The sixth one is that Strategy evaluation process should not dominate decisions.
Meaning, all functional and operating areas must cooperate with each other in
evaluating and controlling strategies. Aside from that, in an organization, since you’re
working as a team, you should let other people to speak. You have to consider unique
perspective to benefit the overall business, because a diverse team of people can
contribute individual ideas. And as they say, a team that works well together, can
succeed together and produce great results.
- For example, during our assembly meeting, we shared our own ideas and perspectives
especially when it comes to decision-making. (Brainstorming)
7. SIMPLE
- The last characteristics of an effective strategy evaluation is to be SIMPLE, not too
cumbersome, and not too restrictive. Meaning to say, it is about being simple to
implement. In evaluating strategies in organization, it is better that it is easily
understood or can be presented with no difficulty. Because complex strategy
evaluation system often confuses people and accomplish little. The test of an effective
evaluation system is about its usefulness and not its complexity.
E. WHAT IS BALANCE SCORECARD?
Page 21 of 29
Balanced Scorecard 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. An effective Balanced
Scorecard contains a carefully chosen combination of strategic and financial objectives tailored
to the company’s business.
Balance Scorecard is a strategic performance management system.
Developed in the early 1990s by Harvard Business School professors Robert Kaplan and
David Norton. Balance Scorecard it was voted by Harvard Business Review one the most
influential business ideas had ever been presented and about 80% of the companies across the
world used a balance scorecard today due to various things to set goals, set action plans and
monitor kpi's.
3 components of Balance Scorecard:
1. it helps companies to set their strategic goals
2. it helps companies to define action plans that will deliver their strategic goals
3. it helps companies to develop KPIs and Metrics that will help them monitor the delivery of
their strategic goals.
Four (4) Perspective of Balance Scorecard
1. Financial Perspective - Top level Financial objectives that measures. Answers the question
how do we look to our shareholder? Considering the following factors.
*Market Share
*Revenue Growth
Page 22 of 29
*Return of Investment
*Financial Productivity
- As a business what do I want to achieve if I’m a commercial company? I want to make some
money, I want to deliver some profits, grow revenue. You define your financial goals, action
plans and metrics.
2. Customer Perspective - Focuses on customer satisfaction.
It answers the questions How are customer see us considering the following factors:
*Customer Service
*New Products
*New Markets
*Customer Retention
*Customer Satisfaction and Loyalty
- What I need to deliver to my customers? What are my customer goals? Are they particular
segments I am targeting? are they new products I'm launching? is there shift in my customer
strategy? what are basically the priorities around customer and markets and then again you
define a number of goals and actions plans and metrics.
3. Internal Process Perspective - Answers the question what should we best at? concern with
assessing process quality to identify how well the business is running considering the following
factors:
*Operations Management Processes
*Customer Service Processes
*Regulatory and Social Processes
*Innovation Processes
- asked yourself what do we now need to be a really good at internally as a business? what are
the key areas that we need to focus on to deliver to our customers and ultimately deliver financial
results. you might focus on marketing, product development on relationships with partners or
any key goals might be internally you need to be really good at.
4. Learning and Growth Perspective - Focuses on 3 key elements.
● Human Capital - People, Skills, Recruitment, Staff Engagement
Page 23 of 29
● Information Capital - Data, Data Systems, Data Flows, I.t Infrastructure and so on.
● Organizational Capital - Culture, leadership and structure of the business
Determines the necessary skills and training modules requires for the successful
implementation of the company process. "Enablers of your Business"
The basic form of a Balanced Scorecard may differ for different organizations. The Balanced
Scorecard approach to strategy evaluation aims to balance long-term with short-term concerns, to
balance financial with nonfinancial concerns, and to balance internal with external concerns.
Strategy Map
Scoring the Balance Scorecard
Page 24 of 29
Page 25 of 29
• Actual results that equal target: 80%
• Actual results that equal stretch target: 100%
• Interpolation modeling using this scale used to derive scores for any actual result
Page 26 of 29
F. CONTINGENCY PLANNING
Contingency Planning defined as alternative plans that can be put into effect if certain key events
do not occur as expected.
As stated the contingency plan is commonly known as the plan b of an organization. This is to
prepare and minimize possible losses in times of unfavorable events.
The following are some contingency plans commonly established by firms:
1. If a major competitor withdraws from particular markets as intelligence reports indicate, what
actions should our firm take?
- Business Intelligence reporting is broadly defined as the process of using a BI tool to prepare
and analyze data to find and share actionable insights. In this way, BI reporting helps users to
improve decisions and business performance.
This will give the company the chance to plan for the possible opportunity to win the market.
The organization should boost the market penetration or market strategy to win the market share
of the said competitor.
2. If our sales objectives are not reached, what actions should our firm take to avoid profit
losses?
-This should always be considered by the organization since there will always be a chance that a
certain product won’t hit the market and reach the target sales. By considering this, it allows the
company to further utilize the product promotion. The company can also establish different plans
like increasing promotional campaign and minimizing expenses that are not helpful in hitting the
target sales.
3. If demand for our new product exceeds plans, what actions should our firm take to meet the
higher demand?
- The organization should also consider on how they will accommodate higher demands of
product. Checking the product’s life cycle will help the organization in establishing plans for this
possible event.
(Ex: Product in the Growth Stage – manpower can be increased for production but if the product
is in the maturity stage increase in time production will do to cover the higher demands)
4. If certain disasters occur—such as loss of computer capabilities; a hostile takeover attempt;
loss of patent protection; or destruction of manufacturing facilities because of earthquakes,
tornadoes or hurricanes—what actions should our firm take?
Page 27 of 29
- We all know that change is inevitable. Resiliency and recovery must be one of the
characteristics that a company should have. With this characteristic the organization can easily
adopt and cope up with the changes in the business cycle and unfavorable events that may occur.
It helps the organization to think and consider future events that may possibly happen.
5. If a new technological advancement makes our new product obsolete sooner than expected,
what actions should our firm take?
- For example: Nokia became out dated when android phones came up to market. It did try to
compete but later failed. Based on my research Microsoft took over Nokia way back in 2013,
however even before the takeover Nokia is heading to its downfall. Nokia failed to cope up with
the in-demand android production of other competitors and soon enough it declared its
bankruptcy.
https://seekingalpha.com/article/916271-how-stephen-elop-destroyed-nokia
https://screenrant.com/how-nokia-died-microsoft-acquisition/
MAJOR BENEFITS OF HAVING CONTINGENCY PLAN:
1. It permits quick response to change.
- It allows the organization to take actions based on the proposed contingency plan.
2. It prevents panic in crisis situation.
- Having contingency plan makes the organization ready and equipped during crisis and
undesirable events.
3. It makes managers more adaptable by encouraging them to appreciate just how variable the
future can be.
- It challenges the managers to always think outside the box and to always consider the future in
every plan they want to propose within the organization.
Seven-step process for effective contingency planning:
1. Identify both beneficial and unfavorable events that could possibly derail the strategy or
strategies.
2. Specify trigger points. Calculate about when contingent events are likely to occur.
3. Assess the impact of each contingent event. Estimate the potential benefit or harm of each
contingent event.
Page 28 of 29
4. Develop contingency plans. Be sure that contingency plans are compatible with current
strategy and are economically feasible.
5. Assess the counter impact of each contingency plan. That is, estimate how much each
contingency plan will capitalize on or cancel out its associated contingent event. Doing this will
quantify the potential value of each contingency plan.
6. Determine early warning signals for key contingent events. Monitor the early warning signals.
7. For contingent events with reliable early warning signals, develop advance action plans to take
advantage of the available lead time.
RDF’s contingency plan:
RDFFLFI minimizes losses by transforming products, offering products to employees at
a lower price and selling discounted products to customers (sale). Transforming meat cut ups into
another products like ground pork, sinigang cut, bulalang cut, mix cut ups and etc. Near expiry
products and products that don’t pass standard quality will be available to RDF’s canteen so that
the employees can avail at a lower price. Fresh Options offer discounted price for seasonal
products like BBQ marinades during holiday season.
During the outbreak of African Swine Fever and this Covid-19 pandemic, RDF
experienced shortages in production of pork meat. The action taken for this is to import carcass
from trusted farms to meet the customers demand. However, there are still disadvantages, like
the quality of the imported product is not the same as the home-grown products produce by RDF
and that the expenses will be higher that will cause less profit for the company.
Conclusion:
Contingency plan promotes resiliency and recovery. It allows the organization to be ready and to
cope up with the changes that may occur by investing in contingency planning.
Page 29 of 29
