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CS Professional · Strategic Management and Corporate Finance · Introduction to Strategic Management

Kaveri Auto Components Ltd. planned to grow sales from Rs 200 crore to Rs 260 crore in a year. At year end, sales were Rs 247 crore, and the board concluded strategy had partly worked and asked management to find reasons for the shortfall and adjust the plan. What percentage of the planned increase was achieved, and which strategic management stage does the board's action represent?

The planned increase was Rs 60 crore and the actual increase Rs 47 crore, so 78.3% of the target growth was achieved. Comparing results with plans and directing corrective adjustment is the strategy evaluation and control stage of strategic management.

  1. A65%; strategy formulation
  2. B78.3%; strategy evaluation and controlCorrect
  3. C81.0%; strategy implementation
  4. D78.3%; environmental scanning

Explanation

Planned increase = 260 - 200 = Rs 60 crore. Actual increase = 247 - 200 = Rs 47 crore. 47/60 = 78.3%. Comparing actual with planned results and taking corrective action is evaluation and control. Using 247/260 = 95% or other bases gives wrong figures such as 81.0% or 65%.

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