Johnson Controls
• Our commitment to exceed the expectations
of customers is the engine for our growth,
and is at the core of our success.
• Technology adds value to our products and
services, giving customers additional
reasons to choose Johnson Controls.
• Our goal is to enhance shareholder’s value.
• Employee dedication to our customers is
key to continued, profitable growth.
• Outsourcing is the largest source of growth for
our company, benefiting our automotive, plastics,
,batteries and controls businesses. Whether it’s
doing more within an automobile or a building, it
adds up to a multi-billion dollar opportunity for
Johnson Controls.
• Our customers expect Johnson Controls to be
responsive to their needs anywhere in the world.
Expanding our reach into emerging international
markets like the Asia-Pacific region, Eastern
Europe and South America is creating new
opportunities for growth.
Chapter 9
Strategy Review,
Evaluation, and Control
Nature of Strategy Evaluation
• Examining the underlying bases of a firm’s
strategies
• Comparing forecasted results with actual
results
• Taking corrective actions to ensure that
performance conforms to plans.
• Adequate, accurate, and timely feedback is
the cornerstone.
Importance of Strategy
Evaluation
• Organizations face dynamic environments
– External and internal factors changing quickly
• Successful organizations should never be
lulled into complacency.
Strategy Evaluation is Difficult
• Instability in world economies
• Shorter product development and product
life cycles
• Constant technological advancements
• More competitors; fewer regulated
industries
• International competition
The Process of Evaluating
Strategies
• Necessary for all sizes and kinds of
organizations.
• Should be performed on a continuing basis.
• Successful strategies may take years, so
strategists need to combine patience with a
willingness to take corrective action
Strategy
Evaluation
Framework
Strategy Evaluation Framework
A Strategy-Evaluation Framework (Figure 9-2)
Activity One: Review Underlying Bases of Strategy
Evaluate internal situation
Compare revised versus existing Internal
Audit Information
Evaluate external situation
Compare revised versus existing External
Audit Information
Do significant
differences occur?
Yes
Activity
Three:
No
Activity Two: Measure Organizational Performance:
Compare planned versus actual progress toward meeting
stated objectives
Take
Corrective
Do significant
differences occur?
No
Continue present course
Yes
Actions
Activity One:
Reviewing Bases of Strategy
• Re-examine external
– How have competitors reacted to our strategies?
– How could we more effectively cooperate with
competitors?
• Re-examine internal
– Have we added strengths and/or corrected
weaknesses?
• Very important to continually be monitoring
Measure Organizational Performance
Compare Past
Periods and
to Industry
Averages for
the Company
Compare to Pro
Forma Projections
Annual Objectives
Long Term Obj.
By Product
By Division
By Department
By Geographic Area
By Salesperson
By Strategic Business
Unit
Activity Two:
Measuring Organizational
Performance
• Quantitative measures
– most commonly used are financial ratios
• Return on investment; return of equity; profit
margin; market share; debt to equity; earnings per
share; sales growth; asset growth.
• Intuitive judgments of performance
• Internal consistency of strategies
• Acceptable level of risk
Activity Three:
Taking Corrective Actions
• Making changes to reposition a firm
competitively for the future.
Take Corrective Action
Revise Mission
Alter Goals and Objectives
Establish New Goals and Objectives
Alter Strategies
Establish New Policies
Hire New Employees or Managers
Close or Open New Facilities
Take Corrective Action (cont.)
Expand or Diversify
Institute Advertising Campaign
Purchase New Equipment
Allocate resources differently
Countless Other Actions May Be Needed
Contingency Planning
• Alternative plans that can be put into effect
if certain key events do not occur as
expected.
– Acquisitions: BT and MCI
• Alternative strategies not selected can serve
as contingency plans.
• Sometimes unexpected opportunities occur.
The End
and
The Beginning