The document discusses the importance of monitoring and evaluating business strategies, emphasizing the need for timely feedback and effective corrective actions to ensure organizational success. It highlights key performance indicators, financial ratios, and the role of industry situation analysis in understanding market dynamics and competition. Additionally, it outlines strategic options for navigating different market conditions, including emerging, high-velocity, mature, and declining industries.

1. Monitoring,
Evaluating and
taking
Corrective
Actions

2. The need to Monitor
4. Illustrate Key
indicators that need to
be monitored: and
5. Explain the
Application of some
Financial Ratios that
can be used in
evaluating the
performance of
Business Firms.
Agendas
1. Discuss the
importance of
monitoring and
implementation and
Execution Strategy
2. Describe some tools
in doing monitoring
task
3. Explain the basic
concept Strategy
Audit and
Unbalance
2

3. The need to
Monitor

4. “
“It is important because it
would be meaningless
exercise to go through the
process of doing
Environmental Scanning,
Setting the Mission-Vission
all the way to the
Implementing the strategies
if no effort will be made to
assess the result and the
impact of the entire
process”
4

5. Monitorin
g
Covers the set of
activities needed
to keep an
update of the
level of
implementation
and execution of
strategy
5

6. USE OF CHARTS
AND MILESTONE
INDICATORS
Useful tools specifically for
the purposes of informing
the top management and
Board of Directors of the
company
6

7. “The era of
computerization
and wide spread
use of
commercial
Software provide
variety of tools
for monitoring
progress of
projects or
activities
covering from
engineering to
finance”
7

8. Consideration in
Reporting
Monitoring
Activities
Monitoring is a way to
search out for the reason
and related variables or
information that may help
explain the result or impacts
of the strategy.
8

9. In order to be relevant and
meaningful, reporting monitoring
activities should take into account
the ff.
9
Process of
effective
Monitoring
Prompt feedbacks on implementation
activities is needed before actions
are fully completed
02
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10. STRATEGIC
AUDIT
It is essentially an
examination or assessment
of the efforts of business
organization to document
the strategic management
agenda of the company.
1
0

11. Balance Scorecard as
Evaluation Tool
1
1
The balanced scorecard (BSC) is
a strategic planning and
management system that organizations
use to:
• Communicate what they are trying to
accomplish
• Align the day-to-day work that everyone is
doing with strategy
• Prioritize projects, products, and services
• Measure and monitor progress towards
strategic targets

12. Evaluating Top
Management

13. 1
3
The performance of the
business organizations is
traditionally viewed upon
by:
▹ Business Owners
▹ Stockholders
▹ Investors
Note: Management team as a whole
is principally responsible

14. 14
Business
Failures
Ordinary Employees Concerned Officer

15. 15
Business
Failures
Ordinary Employees Concerned Officer/s

16. 1
6
According to Hybrid
Strategic Management
Model (Chapter VI)
▹ Board of Directors of the
Firm is involved in
monitoring, planning and
implementing strategies.

17. 1
7
Board of
Directors
Serve as
watchdog

18. 18
Corporate Vision
To be the leader in each of the sectors we operate in
Corporate Strategy
Provide the best customer
service in each sector
Continuously Innovate in
all our products offering
areas
Provide the best customer
service in each sector
Financia
l
Custome
r
Internal Growth
• Improved cash flow
• Improved profitability
• Improved return on
capital employed
• Service Improvement
• Value Improvement
• Introduce Innovative
customer loyalty
system
• Integrate information
system
• Implement TQM
• Management Swap
Programs
• Develop New
Geographic Areas
• Product enhancements
• Pilot new products
Performance
measures:
• Cash flow performance
index
• Double reserves
• Increase return on
capital employed by
3
Performance measures:
• Improved service
satisfaction index by 5
• Value comparison
variance of +/- 1
• Loyalty card survey
• Complaints reduction
target of 5
Performance
measures:
• Reduce project time by
6
• Reduce rework by 3
• HRM performance
comparison
Performance
measures:
• Increase market share
by 8
• Increase number of
stores opened by 3
• Increase number of
product suggestions
• Pilot index

19. Some Key Indicators
▹ Trend in sales and
market shares
▹ Acquiring and/or
retaining
customers
▹ Trend in profit
margins
▹ Trend in net profits
▹ Trend in return on
investments
▹ Overall financial
strength and credit
ranking
▹ Overall financial
strength and credit
ranking
▹ Efforts at continuous
improvement
activities
▹ Trend in stock price
and stockholder
value
▹ Image and reputation
with customers ; and
▹ Leadership role(s) –
technology, quality,
innovation, e-
1
9

20. Consideration
for Financial
Ratios
2
0

21. Three Financial
document to
prove the
soundness and
competitivenes
s of the
business
Balance Sheet
Income
Statement
Cash
Flow
21

22. 2
2
Financial Ratios
 Liquidity Ratios
 Profitability Ratios
 Activity Ratios
 Leverage Ratios

23. 2
3
Liquidity Ratios
 explain the financial position of the
firm in terms of its ability to
address its short term obligations
and how solvent is the business.
 common liquidity ratios include
the quick acid test ratio, current
ratio, and days sales outstanding.

24. 2
4
Profitability Ratios
▹ It is refer to parameters indicative
of the level of income and profit
levels as a result of business
operations.
▹ It shows the monetary returns out
of the infusion and use of capital
or investments
▹ (net profit margin, gross profit
margin, return on investments,
equity, and earnings per share)

25. 2
5
Activity Ratios
▹ It is refer to how well the business
manages the routine activities -
inventory management, assets
turnover, accounts receivable, etc.
▹ ( inventory turnover, assets, fixed
asset accounts receivable and
networking capital turnover, ave
collection period and days of cash
ratio)

26. 2
6
Leverage Ratios
▹ Indicates how well the firm
manages its financial resources
vis-à-vis its external obligations as
well as its equity positions.
▹ ( debt to asset ratio, debt to equity
ratio, long-term debt to capital
structure, times interest earned,
coverage of fixed charges, and
current liabilities to equity.

27. Taking
Corrective
Actions
2
7

28. 2
8
▹ STRATEGIC PLAN is not a guaranty or
license to success. Rather, it is only a guide
in search of competitive and hopefully
successful and profitable business
operations.
▹ MONITORING and EVALUATING the
performance of the business is useful in
knowing the impact or result of the strategy
upon the competitiveness and profitability of
a firm.

29. 2
9
▹ By knowing the setbacks in case of failure,
concerned managers can develop options
or corrective measures to put back the
business on stream and on the right course.
It may be costly for the firm but it has to be
accepted that planning and executing the
plan is a learning process by itself.
▹ ASSESSING or EVALUATING the business
performance and taking corrective
measures are just as important as any of
the tasks in strategic managements if only
to pursue specific courses of actions
leading to the realization of the stated
vision-mission statement.

30. INDUSTRY
SITUATION
ANALYSIS
3
0

31. 3
1
The Need for Industry
Situation Analysis
A new business venture or a new entrant to the
industry has to do the following to earn a market
share:
▹ Find out what is prevailing in the industry or
sector the business is joining in.
▹ The business managers should find a way out and
see what is in the industry and how the business
would play in the market already dominated by
the existing competitors.

32. 3
2
The Context of
Industry Situation
Analysis
▹ It involves seeing and analyzing the
situation of the industry as a whole and
situating the firm within the industry.
▹ It concerns with assessing the industry or
situation in relation to the concerns of
business organizations as it operates in a
competitive stance.
▹ It involves assessing the industry in relation
to the factors external to the firm.

33. 3
3
The Strategic Group
▹ The industry situation analysis should lead
to a realization as to which specific
subgroup or strategic group within the
industry the new entrant would be involved
in.
▹ Given its resources and competitiveness as
well as the kind of product and services it
offers, the business should be able to tailor
fit its direction or strategy within the
strategic group and may even result to
finding a market niche which it can focus on
serving on

34. COMPETITOR
ANALYSIS
3
4

35. 3
5
COMPETITOR
ANALYSIS
▹ In broader context, industry
situation analysis concerns with the
industry at large that leads to
competitor analysis.

36. 36
Figure 71. Strategic group in the Personal Computer Industry
in the USA)
Apple
Compaq,
Hewlett-
Packard,
IBM
Gateway
Packard,
Bell. AST
Research,
Tandy
Dell
Fragmente
d players
High
High
Low
Low
Product
Quality

37. Concerns of analysis
of competition among
the major players in
the industry or
market:
▹ Understand
their strategies
▹ Watch their
actions
▹ Evaluate
competitive
pressures
▹ Size up their
resources
strengths and
weaknesses and
their capabilities;
and
▹ Try to anticipate
rival’s next move
3
7

38. 3
8
WHAT TO LOOK FOR IN THE INDUSTRY
ANALYSIS

39. 3
9
BASIC TO DOING
INDUSTRY SITUATION
ANALYSIS:
▹ Doing desk research
▹ Legwork
WHY?
To search for relevant data
or information that would form
part of the industry analysis.

40. 40
Categorizing Objectives and Strategies of
Competitors

41. 4
1
TYPES OF INDUSTRY
SITUATIONS
 In addressing industry situation
analysis, the effort leads to
identifying and characterizing
various industry situation largely
influenced by the nature of product
life cycle and a variety of theories
and principles.

42. 4
2
▹ The variety of factors prevailing
in the industry and the
environment at large redounds to
industry categories, groups or
type which may be either new or
emerging, high velocity, mature,
declining, stagnant, fragmented,
industry leaders and runner-up.

43. The New or
Emerging
Industry
4
3

44. New or emerging
industry refers to a kind
of market or industry
situation in the early
stages of development
and typically with small
number of players.

45. The industry is
characterized by the
following:
▹ A new and unproven
market
▹ Proprietary
technology
▹ Low entry barriers
▹ Experience curve
effects may permit
cost reductions as
volume builds
▹ Buyers are first-time
users
▹ Marketing involves
inducing initial
purchase and
overcoming customer
concerns
▹ Possible difficulties in
securing raw materials
▹ Firms struggle to fund
research and
development,
operations and build
resource capabilities
for rapid growth

46. 4
6
Strategic Options for Competing in an Emerging Market
Strategic Options for Competing in an Emerging Market

47. Strategic options as
suggested by
Thompson and
Strickland
1. Win early race for industry leadership by
employing a bold, creative strategy.
2. Push hard to perfect technology, improve
product quality, and develop attractive
performance features
3. Move quickly when technological uncertainty
clears and a dominant technology emerges
4. Form strategic alliances with;
4.1 Key suppliers

48. 4
8
4.2 Companies having related
technological expertise
5. Capture potential first-mover advantages
6. Pursue
6.1 New customers and user
applications
6.2 Entry into new geographical
areas
7. Focus advertising emphasis on
7.1 Increase frequency of use
7.2 Creating brand loyalty
8. Use price cuts to attract price-sensitive
buyers

49. 4
9
High Velocity Markets
High velocity markets or
industry refers to one that is
considered fast moving or in
a fast-pace and high
turnover of products.

50. This industry is
characterized by any
of the following:
5
0
• Rapid-fire technological
change
• Short product life cycles
• Rapidly evolving customer
expectations
• Frequent launches of new
competitive moves
• Entry of important new rivals

51. Strategic
options for
competing in
high velocity
markets
5
1

52. Strategic Options for High Velocity Markets:
1. Invest aggressively in research
and development
2. Develop quick response
capabilities
2.1 Shift resources
2.2 Adapt competencies
2.3 Create new competitive
capabilities
2.4 Speed new products to
market
3. Use strategic partnership to
develop specialized expertise
and capabilities
4. Initiate fresh actions every
few months
5. Keep products/services fresh
and exciting

53. 53
Meeting of challenge of high velocity markets
 Thompson’s
and
Strickland’s
suggested
strategic
posture and
specific actions

54. Keys to success
in high velocity
markets
54

55. Thompson’s and
Strickland’s keys to
successfully compete in
a high velocity market
1. Use of cutting-edge expertise
2. Speed in responding to new
developments
3. Alliance or collaboration with
others
4. Agility of the firm

56. 5. Innovativeness and creativity
6. The attitude of being opportunistic
7. Flexibility of the firm’s resources
8. The pioneering attitude and spirit
or first-to-market capabilities
56

57. INDUSTRY
SITUATION
ANALYSIS
5
7

58. 5
8
 Mature Industry
 Strategic Options in a Mature
Industry
 Stagnant or Declining
Industry
 Strategic Options in a
Stagnant or Declining
Industry

59. 5
9
Mature Industry
 Whether an industry is considered
emerging or high velocity in nature,
such market or industry will eventually
slow down and mature or even vanish
out following the pattern of the product
lie cycle.
 Mature Industry or market is one that
has passed its high growth stage and
slowly leading to its peak.
�

60. 6
0
Mature Industry can be
characterized by any of the
following features:
▹ Slowing down breeds stiffer
competition
▹ More sophisticated buyers demand
bargains
▹ Greater emphasis on cost an
service;
▹ “topping out” problem in adding
production capacity;

61. 6
1
▹ Product innovation and new
uses f product harder to come
by;
▹ International competition
increases;
▹ Industry profitability fall; and
▹ Mergers and acquisitions
reduce the number of industry
rivals

62. 62

63. To keep going and survive in
maturing industry or market,
doing the following strategic
options will be useful:
▹ Prune marginal
products and
models;
▹ Emphasize
innovation in the
value chain;
▹ Strong focus on cost
reduction;
▹ Increase sales to
present customers;
▹ Purchase rivals at
bargain prices;
▹ Expand
internationally;
and
▹ Build new, more
flexible
competitive
capabilities.
6
3

64. 6
4
STAGNANT OR
DECLINING INDUSTRY
▹ Stagnant or declining market is a
situation whose demand for the product or
services is faltering or has slowed down
and its product becoming extinct in the
market.
▹ A stagnant or declining market is
characterized by the following conditions:
• Demand grows more slowly than
economy as whole (or even declines);

65. 6
5
• Competitive pressures intensify
rivals battle for market share
• To grow and prosper, firm must
take market share from rivals;
and
• Industry consolidates to a
smaller number of key players
via mergers and acquisitions

66. STRATEGIC OPTIONS IN A
STAGNANT OR DECLINING
INDUSTRY
▹ As a business
ventures is destined
to continue doing
business amidst a
varying market
condition sometimes
adverse and at other
times favorable, it
has to keep up the
fight and compete in
a declining market
scenario or else fold
up and start another
business anew.
▹ To be able to
compete in a
stagnant or
declining markets
or industry ,
doing the
following
Strategic
Options will be
of help;
6
6

67. STRATEGIC OPTIONS IN A
STAGNANT OR DECLINING
NDUSTRY
a) Pursue focus
strategy aimed
at fastest
growing
market
segments
b) Stress
differentiation
base in quality
improvement
or product
innovation
c)Work diligently
to drive costs
down by way of
any of the
following
options:
6
7

68. 6
8
i. Cut marginal activities from value
chain;
ii. Use outsourcing
iii. Redesign internal processes to exploit
e-Commerce
iv. Consolidate underutilized production
facilities
v. v.add more distribution channels
vi. Close low-volume, high-cost
distribution outlets
vii. Prune marginal products

69. Fragmented
Industry
6
9

70. Fragmented industry or
market is one in which many
companies compete and there
is no single or small group of
companies which dominate the
industry.

71. Fragmented industry is
characterized by the
following:
a. Absence of market leaders with
large market shares
b. Buyer demand is so diverse and
geographically scattered that
many firms are required to satisfy
buyer needs.
c. Low entry barriers;
d. Absence of scale economics;

72. e. Buyers require small amounts of
customized or made-to-order
products;
f. Market for industry's product/service
may be globalizing, thus putting
many companies across the world in
same market arena;
g. Exploding technologies force firms to
specialize just to keep up in their
arena of expertise; and
h. Industry is young and crowded with
aspiring contenders, with no firm
having yet developed recognition to
command a large market share.

73. 7
3
Strategic Options in a Fragmented
Industry or Markets
 The fact that a fragmented
market or industry is largely
characterized by the absence
of a market leader simply
means that challenge and
opportunity for dominance is
up for grabs

74. 7
4
Considering any of the
following strategic
options:
a. Construct and operate
"formula" facilities
b. Become a low-cost operator;
c. Specialize by product type,
d. Specialize by customer type;
and
e. Focus on limited geographic
are.

75. Categories of
Market Players in
the Industry
 The process of doing industry situation or
markets analysis necessarily or eventually
leads to knowing who's who in the
industry. The who's who in the market or
industry comes in two general
classification. One group belongs to the
industry leaders and the other group is
classified as runner-up.

76. The Industry
Leaders  Business organization considered in the
category of industry leader is one that
is ahead of competitors either in terms
of market share and other quantitative
indicators like gross sales and income
levels.
 Fundamentally, industry leaders are
characterized by the following:
a. Stronger-than-average to powerful
position;
b. Well-known reputation; and
c. Employs proven strategies.

77. STRATEGIC
OPTION FOR
INDUSTRY
LEADERS

78.  Industry Leaders are
challenged by need to be always
on top shape and continue it's
dominance over time, if possible
as long as company exist.

79. 7
9
Thompson and
Strickland (1999)
suggested the following
strategic rules:
A. Stay on the offensive strategy
B. Fortify and defend the strategy
C. Do muscle flexing strategy

80. 8
0
A. Stay on Defensive
Strategy

81. 8
1
B. Fortify and defend Strategy
The objective can be met by the
following moves
▹ makes other firm to enter and
challengers to gain ground
▹ hold onto present market share
▹ strengthen market position
▹ protect competitive advantage

82. 8
2
C. Do muscle flexing strategy
Muscle flexing is the strategy by way
of doing any of the following:
▹ Competitive hardball with smaller
rivals that threatens leaders
position
▹ Signal smaller rivals that move to
cut into leaders business will be
hard fought
▹ Convince rivals they are better off
playing follow-the-leader.

83. 8
3
RUNNE
R
UP
FIRMS
 Runner up firms after to the
business organizations that are
lagging on terms of competitive
position in the form of market
share and some quantitative
indicates stability.
Three
Classifications:
A. Market challenges
B. Focusers
C. Perennial runner-ups

84. 84
NDUSTRY ANALYSIS
MATRIX
 To be able to craft a competitive strategy, it is important to
know the level of attractiveness of the industry or sector
that a business venturing into.

85. External Factor
Analysis
(EFAS)
85

86. Thank you!
GOODLUCK
SA DEFENSE!
8
6