Strategy Evaluation

Question 1

Why do we have to choose particular strategies?

Answer 1

because we can only have one at a time in a SBU/SBA, the one that is most viable

Question 2

state 2 examples of partial approaches to strategy evaluation

Answer 2

1. for corporate strategy: (if defined using the portfolio matrix) will our portfolio be balanced if we choose this strategy?
2. for business strategy: (if defined using Porter’s approach) what is the industry attractiveness? what is the company’s relative position in the industry?

Question 3

state 3 comprehensive approaches to strategy evaluation

Answer 3

1. qualitative criteria evaluation
2. quantitative criteria evaluation
3. mixed criteria evaluation

Question 4

how to decide on the approach of strategy evaluation?

Answer 4

based on what you are deciding (e.g., investment vs outsourcing decision)

Question 5

which type of comprehensive approach of strategy evaluation is most used in practice?

Answer 5

qualitative

Question 6

state 6 examples of criteria that are used in qualititative criteria evaluation

Answer 6

accordance:

• external: strategy vs O&T
• internal: S&W
• strategy VS mission and vision
• strategy VS manager’s value and goals
• suitability of length
• reasonableness

Question 7

state 6 examples of criteria that are used in quantitative criteria evaluation.

Answer 7

1. relative entry costs
2. performance (profitability)
3. risks (↑need of resources -> ↑risks)
4. sensitivitiy (like elasticity)
5. flexibility (common for production)
6. synergetic effects (effect of a certain business strategy on the whole company)

Question 8

what is the difference between partial and comprehensive strategy evaluation techniques?

Answer 8

the partial approaches focus on the evaluation of a specific strategy (business, functional)
the comprehensive approach focuses on the evaluation of all strategies within a company