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CA Intermediate · Financial Management and Strategic Management · Strategy Implementation and Evaluation

Kaveri Pharma has set a strategy to enter rural markets. Midway, the strategy team compares actual market share and distribution reach against targets set at the start, finds large gaps, and investigates whether the assumptions behind the plan remain valid. Which step of the strategic evaluation process is the team mainly performing at this point?

The team is measuring performance and analysing variances. Strategic evaluation compares actual results with the benchmarks set earlier, studies the deviations and checks the assumptions, before corrective action is taken. Setting vision, choosing strategy or allocating budgets belong to other stages of the strategic management process.

  1. AMeasuring performance and analysing variancesCorrect
  2. BEstablishing the vision of the firm
  3. CSelecting the corporate level strategy
  4. DAllocating the annual budget

Explanation

Strategic evaluation involves fixing benchmarks, measuring actual performance, analysing variances and taking corrective action. Here the team compares actuals with targets and studies the gaps, which is measuring performance and analysing variances. Vision setting and strategy selection occur at formulation, and budget allocation is an implementation task.

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