Strategy Evaluation Process and Its Significance - Essay Example

In the strategy review and evaluation phase, the company’s project managers determine whether the chosen strategy is meeting its objectives. In the process, the managers should give particular emphasis to the internal and external factors based on which the strategy was developed.

The process of strategy evaluation generally consists of four steps including setting a benchmark of performance, performance measurement, assessing variance, and taking corrective actions (‘Strategy Evaluation Process..’). To review and evaluate the current performance of the chosen strategy, Cath Kidston Ltd should periodically measure and assess the outcomes identified. It would be a better strategy for the managers to compare the actual outcomes against industry benchmarks, and corporate, operational, and individual targets. A close assessment of outcomes in the light of industry benchmarks would assist the company to determine whether or not the strategy performs up to the industry standards (Aswathappa, 2010, p.346). If appropriate tools are available for measuring the performance and the standards were set in the right manner, then it is really easy for the company to evaluate the strategy implemented. However, sometimes it is a cumbersome task to measure managers’ contributions and divisional performance as there is no single defined tactic to do this. For measuring the outcomes and evaluating the performance of the strategy, Cath Kidston Ltd should prepare financial statements such as balance sheets and profit and loss accounts for interim periods.

While comparing actual outcomes with industry benchmarks and other standards, the variance observed must be thoroughly evaluated. Managers must check whether the variance between actual and standard performance lies within the degree of tolerance limits set during strategy formation. A positive deviation indicates that the strategy performs better than planned. At the same time, a negative deviation reflects a shortfall in performance and the situation in turn would pose great threats to the long-term success of the strategy (Trehan M & Trehan, n.d. p.31). At this juncture, it is the responsibility of the strategists to discover what went wrong and what needs to be done to improve the situation (Ibid). Taking corrective action is the final step of strategy review and evaluation. Once a negative deviation in performance is identified, it is inevitable to take appropriate corrective action to ensure that the strategy would not end up in failure in the long term (Karami, 2012, p.58). If the actual performance has been consistently weak, then the managers must conduct a detailed analysis to identify the factors leading to such a poor performance. If it is observed that the organization’s potential does not justify the performance requirements set, then the company should lower the standards correspondingly. In some rare cases, corrective actions may not be enough to improve performance and under those circumstances, the organization may be forced to reformulate and re-implement the strategy.

For Cath Kidston Ltd, it would be easy to measure the actual outcomes and compare them against industry benchmarks based on revenues and net profits. Furthermore, the organization may gather customer feedback to identify how their shopping experience changed after the implementation of the chosen strategy. Finally, the company may also depend on third-party agencies to conduct market surveys and thereby obtain customers’ opinions and suggestions