Question

1.) How do we know if a company’s strategy is working?

Your answers will be short essays and should be three full paragraphs or longer

Answer 1

Strategies of organizations are the plans that guide them in their way to achieve a goal in business. It is very necessary to know the effectiveness of the strategies by making an assessment on whether it is working or not. Strategic analysis is a method that helps to determine the effectiveness of the current strategy in the existing business environment. It helps in checking whether the strategy is helping the company fail or succeed. This can be done by some of the following methods.

Evaluation of the strategy during the stage of formulation can help understand whether it would prove to be effective or not. The strategy of the business should be capable enough to meet all the stated goals. It should also be in alignment with the vision, mission and values of the organization.

During the stages of execution of strategy, it should be divided into milestones. These should actually be listed metrics that help track the progress of the organization. These quantifiable performance measures can be also known as Key Performance Indicators (KPI), which will be unique for each kind of business. Different metrics can be adopted for different facets, i.e, for finance it can be profit, revenue, cash flow, etc.

The performance should be evaluated continuously instead of assessing it all of a sudden in the audit process. Tracking the results consistently will help in knowing whether the strategy is helping the organization to perform well. It will also help in allotting the resources and take corrective actions whenever required. Thus, it can develop a more effective approach to the business strategy.

Dashboards can be employed which contain data regarding the performance. It is similar to that of a progress report which consists of data right from the date of planning to the date when the outcome is expected from the company. The positive growth of the financials, sales and customer satisfaction will definitely represent the effectiveness of business or otherwise.

The business strategy thus formulated should be capable of mitigating and containing all the prospective risks that the business could face. Any kind of uncertainty shouldn’t affect the business as per an effective strategy. It should also have backup plans to sustain during the times of uncertainty and vulnerability.

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