A corporate strategy framework is hierarchically the highest strategic plan which defines the pathway and overall corporate goal of an organization. So, whether you’re a startup or a well-established business, evaluating your corporate strategy over a certain period is important to ensure growth & sustainability.

In this blog, we will walk you through the whole process of strategy evaluation.

Steps for Corporate Strategy Evaluation

Since different organizations work on different goals and parameters, there’s no universal approach to evaluate a corporate strategy. As a result, each organization has its way of evaluating a strategy. In order to ensure business growth through unstable business environments, maximize workforce efficiency, effectively utilize resources, and avoid market disruptions, evaluation of the corporate strategy is highly important.

Phase 1: Evaluate the current strategy

Starting with the evaluation of a corporate strategy primarily requires an honest and clear assessment of where a business stands in the current state. Doing so will help in acknowledging the unused resources that can be used going forward and inefficiencies that can be rectified. 

So, what can be the starting part of this evaluation?

A good place to start the evaluation process is to get back to the mission statement and the prime goal of the organization. From there, an inspection of the resource and their usage can be done. The best way to do so includes SWOT Analysis – an examination of the strengths, pain points, challenges, and opportunities of an organization which is led by the formulation of a strategic plan based on the elements examined.

Phase 2: Examine the internal & external consistency

Both the internal and external consistency are equally significant aspects of a corporate strategy. Internal consistency refers to the influence of distinctive policies on the business goals while external consistency refers to the effect of policies with respect to the government pacts, cooperative bargaining, foreign investments, and corporate relationship with other forces. Internal consistency is particularly important in the process of strategy evaluation because it determines the areas where strategic decisions or choices must have to be made.

So, how does a well-worked out strategy look like? Here are the checkpoints –

• Each policy fits into an incorporated hierarchy – does one policy relates to other policies established by the company to meet the goals that the company is working to attain?

• Chosen policies are consistent with the external business environment – do they make sense or relate with what is going outside?

An inconsistent strategy does not specifically imply that an organization is in danger but it can certainly cost the organization.

Phase 3: Align strategy with available resources and inherent risks

The resource of an organization determines its capability to respond to the anticipated threats and opportunities. These critical resources are what the company has the most and the least at the same time. In the course of strategy determination, retaining harmony between strategic goals and available resources is undoubtedly the most pressing challenge.

This requires an estimation of:

• A critical measure of available resources required to achieve a particular goal
• The rate at which the goal will be achieved
• The possibility of whether the resources will be available

When strategy and resources are taken together, an organization can specify the degree of risk undertaken. Each organization has to decide the amount of risk they want to proceed with. There are a number of factors that can help a firm assess the degree of risk inherent associated with a specific strategy –

1. The number of uncertain resources on which the strategy is established

2. The periods for the availability of the resources

3. The number of resources dedicated to a particular endeavor.

The greater the volume of these factors, the greater the degree of risk inherited.

Phase 4: Allot a reasonable Time Horizon

A reasonable corporate strategy not just focuses on the goals to be achieved but also emphasizes when those goals will be attained. Since the availability of resources is associated with a specific time period, it’s important to set an achievable and appropriate time required to achieve a goal.

Because a goal may lose its strategic importance if it is not attained within a certain time horizon. Thus, there must be enough time assigned to achieve a goal so that the workforce can adjust themselves for the same.

Wrapping Up

The impact of a strategy has been witnessed in every generation and industry. Because what made Apple and Netflix a huge success was the same which made Kodak and Blockbuster an equally huge failure – a strategy. An effective business strategy plays a major role in anticipating the future of an enterprise. On the contrary, an inappropriate strategy can result in the collapse of a well-off business. Ultimately, it is one of the fundamental key instruments that helps a business yield established goals, profit, and business objectives.