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Case AnalysisBy: Mark Lor T. Munar
INTRODUCTION
HISTORY• Founded by Vemon Carver Rudolph in 1937 and opened on July 13, 1937 in Winston-Salem, North Carolina
• The company started out by selling doughnuts to local grocery stores.
•Rudolph decided to cut a hole in the wall of the bakery so that his Hot Original Glazed doughnuts could be sold directly to the customers.
•In 1950, the doughnut making process was mechanized with the use of KK automatic doughnut cutter. Hand-cut doughnuts became a thing in the past. All the process in the bakery becomes automatic.
INTRODUCTION
Type Public (NYSE: KKD)
Industry Restaurant
Founded 1937
Headquarters Winston-Salem, North Carolina, United States
Employees 3,700 (2009)
Website krispykreme.com
PRODUCT LINE• Krispy Kreme’s product line consists of the
following:
Iced Drinks and Kool Kremes
Doughnuts
Coffee
MISSION - VISION
MISSION“To touch and enhance lives through the joy that is Krispy
Kreme”
VISION
“To be the worldwide leader in sharing delicious tastes and creating joyful memories”
The points included in the mission: 6. Philosophy, 8.Public image.
The proposed MISSION:
Our mission is to provide our customers1 with the best of our Krispy Kreme doughnuts and coffee2, and to
insure consistency in all of KKD branches around the world3. We are looking forward to watch our
franchisees9 financially to keep going to achieve our vision5. We make sure that the ingredients we use
are the best6. The public image has a high priority in our company so we'll keep participating in the
community through supporting the social events and donations8. Our signature original glazed will
continue to be our unique product and offered in all of our stores around the world7.
1) Customer,2)Products or service, 3)Market, 4)Technology 5)Concern for survival,6)Philosophy, 7)Self concept, 8)Concern for public image, 9)Concern for employees.
INTERNAL ASSESSMENT
CORE COMPETENCIES• Even though Krispy Kreme has
vertically integrated but their core competency is still in the doughnut making business. Krispy Kreme has strategic advantage over others because of forward and backward integration.
• There are other big players in the industry such as Dunkin Donuts, Winchell`s Donut House, Tim Hortons and LaMar`s Donut but the point that differentiate Krispy Kreme from other players is the “HOT DOUGHNUT EXPERIENCE” and the company owned stores that give a classic touch to the donut experience which it termed as “Doughnut Theatre”
BUSINESS AND FINANCIAL METRICS
2009 2008 2007Revenue 383.98 429.32 461.2Cost of Revenue, Total 345.01 380.01 389.38Gross Profit 38.98 49.31 71.82Selling/General/Administrative Expenses, Total 23.46 26.3 48.86
Research & Development 0.0 0.0 0.0Depreciation/Amortization 8.71 18.43 21.05Interest Expense (Income), Net Operating 0.0 0.0 0.0
Unusual Expense (Income) 0.55 57.34 28.49Other Operating Expenses, Total 1.5 0.01 1.92Operating Income 4.76 -52.78 -28.5Interest Income (Expense), Net Non-Operating 0.0 0.0 0.0
Gain (Loss) on Sale of Assets 0.0 0.0 0.0Other, Net 2.82 -2.97 -0.45Income Before Tax -3.56 -64.73 -41.03Income Tax - Total 0.5 2.32 1.21Net Income -4.06 -67.05 -42.24
2009 2008 2007Preferred Dividends 0.0 0.0 0.0General Partners' Distributions 0.0 0.0 0.0 Basic Weighted Average Shares 65.94 63.81 61.87Basic EPS Excluding Extraordinary Items -0.06 -1.05 -0.68
Basic EPS Including Extraordinary Items -0.06 -1.05 -0.68
Diluted Weighted Average Shares 65.94 63.81 61.87Diluted EPS Excluding Extrordinary Items -0.06 -1.05 -0.68
Diluted EPS Including Extraordinary Items -0.06 -1.05 -0.68
Dividends per Share - Common Stock Primary Issue 0.0 0.0 0.0
Gross Dividends - Common Stock 0.0 0.0 0.0Interest Expense, Supplemental 10.68 9.8 20.33Depreciation, Supplemental 8.1 17.8 20.3
BUSINESS AND FINANCIAL METRICS
2009 2008 2007Normalized EBITDA 14.02 22.99 21.04Normalized EBIT 5.31 4.56 -0.01Normalized Income Before Tax -3.01 -7.39 -12.53Normalized Income After Taxes -3.7 -29.78 -23.72
Normalized Income Available to Common -3.7 -29.78 -23.72
Basic Normalized EPS -0.06 -0.47 -0.38Diluted Normalized EPS -0.06 -0.47 -0.38Amortization of Intangibles 0.61 0.63 0.75
BUSINESS AND FINANCIAL METRICS
KRISPY KREME’S FINANCIAL RATIOS ANALYSIS (Key Ratio)
Growth Rate % Krispy
Kreme
Industry
Sales (qtr vs year ago qtr) -11.40 5.00
Net Income (YTD vs YTD) NA 34.70
Net Income (qtr vs year ago
qtr)
59.40 30.20
Sales (3 years annual
average)
-9.97 6.20
Net Income (3 years annual
average)
NA 14.37
Dividens (3 years annual
average)
NA 24.05
KRISPY KREME’S FINANCIAL RATIOS ANALYSIS (Key Ratio)
Price ratio Krispy Kreme Industry
Current P/E Ratio NA 17.3
P/E Ratio 3 Years High NA 6.7
P/E Ratio 3 years Low NA 3.8
Price/Sales Ratio 0.74 2.35
Price/ Book Value 4.26 6.29
Price/Cash Flow Ratio 35.60 11.60
KRISPY KREME’S FINANCIAL RATIOS ANALYSIS (Key Ratio)
Profit Margin % Krispy
Kreme
Industry
Gross Margin 13.9 35.3
Pre-tax Margin 0.3 5.1
Net Profit Margin -0.3 13.6
3 Years Gross Margin
(Average)
13.4 36.3
3 Years Pre-Tax Margin
(Average)
-15.6 15.1
3 Years Net Profit Margin
(Average)
-16.1 10.6
KRISPY KREME’S FINANCIAL RATIOS ANALYSIS (Key Ratio)
Financial Condition Krispy Kreme Industry
Debt/Equity Ratio 0.81 2.16
Current Ratio 1.5 1.0
Quick Ratio 1.2 1.0
Interest Coverage 0.9 25.6
Leverage Ratio 2.8 4.2
Book Value/Share 0.90 11.94
KRISPY KREME’S FINANCIAL RATIOS ANALYSIS (Key Ratio)
Investment Return % Krispy
Kreme
Industry
Return on Equity -1.6 54.2
Return on Assets -0.5 12.5
Return on Capital -0.7 14.9
Return on Equity (3 Years
Average)
-55.5 27.8
Return on Assets (3 Years
Average)
-21.7 9.8
Return on Capital (3 Years
Average)
-29.7 12.2
KRISPY KREME’S FINANCIAL RATIOS ANALYSIS (Key Ratio)
Management Efficiency Krispy Kreme Industry
Income/Employee -254 10,444
Revenue /Employee 91,067 98,255
Receivable Turnover 17.1 49.5
Inventory Turnover 18.7 97.5
Assets Turnover 1.9 1.1
KRISPY KREME’S FINANCIAL RATIOS ANALYSIS (3 Year Summary)
Date Average P/E Price/
Sales
Price/
Book
Net Profit
Margin (%)
02/0
9
-51.30 0.24 1.62 -1.1
02/0
8
-6.20 0.43 3.34 -15.6
01/0
7
-13.10 1.73 10.22 -9.2
Date Book Value/Sh
are
Debt/
Equity
ROE
(%)
ROA (%) Interest Coverage
02/0
9
$0.86 1.30 -7.0 -2.1 0.4
02/0
8
$0.87 1.35 -118.5 -33.1 -5.4
01/0
7
$1.26 1.36 -53.5 -12.1 -1.4
STRENGHTS:1. Strong Brand Recognition and Recall2. Krispy Kreme makes it possible for
different organizations throughout the community to use their product as a fundraiser. Fundraising program has helped non-profit organizations raise millions of dollars in needed funds.
3. Krispy Kreme has Strong Channel of Distribution. Krispy Kreme is most popular in grocery and convenience stores which gives customers easy access to the product.
4. Employees are better trained.5. Expanded assortment of offerings at
KKD stores including beverages6. It has a unique brand and variety of
freshly made donuts. Wide appeal of signature hot original glazed doughnuts
7. KKD can offer to have customers watch product being made at the donut theater.
WEAKNESSES:1. Lack of more International
locations in the United Kingdom, Japan and Spain
2. Manufactures all equipment internally in its Manufacturing and Distribution Department
3. Non-interactive website 4. No online ordering
capability 5. Uncertainty of
International markets6. KKD snacks are not
healthy (need to consider low-calorie donut)
7. Perishability of product
Strengths & Weaknesses
STRENGHTS:8. It has a high capacity to make 4,000 to
10,000 donuts daily.9. Krispy Kreme Doughnuts prides
themselves on high customer satisfaction with fresh quality donuts.
10.It offers additional products through businesses acquisitions.
11.Krispy Kreme offers a product that is second to none, with regards to taste, freshness and the finest ingredients. It has a great desire for growth and success of people and company.
12.KKD has great service and innovation.13.Krispy Kreme has Doughnut machine
Technology. It also has e-commerce which gives owners access to real-time information.
14.KKD has a drive through window for sales.
15.It also has a new fall product line of donut called Spice.
16.It is expanding into Dunkin Donuts territory.
WEAKNESSES:8. Limited product line
(heavy reliance on doughnut sales)
9. Overextended (i.e., Montana Mills acquisition)
10.Pricing in some locations11.Bad Relations with
Franchisees (cost of equipment, packaging, ingredients etc)
12.No other Standout Products (Weak Menu)
Strengths & Weaknesses
INTERNAL FACTOR EVALUATION (IFE) MATRIXINTERNAL FACTOR EVALUATION (IFE) MATRIX of Krispy Kreme
DoughnutsKey Internal Factors Weight Rating Weighted
Score Strengths1 Strong Brand Recognition and Recall 0.14 4 0.562 Wide appeal of signature Hot Original
Glazed Doughnuts0.08 4 0.32
3 Strong Channel of Distribution 0.06 3 0.184 Customers watch product being made at
the Donut Theater0.05 3 0.15
5 High customer satisfaction with Fresh Quality Donuts.
0.08 4 0.32
6 Doughnut machine Technology 0.09 3 0.277 Gained Reputation through various
fundraising programs0.05 3 0.15
8 New fall product line of donut called Spice
0.04 3 0.12
INTERNAL FACTOR EVALUATION (IFE) MATRIXINTERNAL FACTOR EVALUATION (IFE) MATRIX of Krispy Kreme
DoughnutsKey Internal Factors Weight Rating Weighted
Score Weaknesses1 Lack of more International locations in
the United Kingdom, Japan and Spain0.10 1 0.1
2 Limited product line (heavy reliance on doughnut sales)
0.09 1 0.09
3 KKD snacks are not healthy (need to consider low-calorie donut)
0.06 2 0.12
4 No online ordering capability 0.05 1 0.055 Bad Relations with Franchisees (cost of
equipment, packaging, ingredients etc)0.06 2 0.12
6 Pricing in some locations 0.05 1 0.05TOTAL 1.00 2.6Total weighted score for the Krispy Kreme internal factor is 2.6 which is above average. So it is internally strong but it indicates that there is still room for further improvement.
EXTERNAL ASSESSMENT
MACRO ENVIRONMENT ANALYSIS
COMPETITORS• Dunkin' Donuts is the world's largest coffee
and baked goods chain, serving more than 3 million customers per day. Dunkin' Donuts sells 52 varieties of donuts and more than a dozen coffee beverages as well as an array of bagels, breakfast sandwiches and other baked goods.
• LaMar’s Doughnuts’ strategy is to go to its customers by operating neighborhood, bistro-style doughnut stores with gourmet espresso bars in high traffic areas. Currently they operate 40 franchised and company owned gourmet doughnut stores in seven states, and the goal is to open 1200 stores nationwide by 2010.
COMPETITORS• Starbucks (SBUX) is an international coffeehouse
that has built one of the world's most powerful and recognizable brands upon high-quality coffee and the unique "Starbucks Experience." Starbucks has sought to capitalize on its growing popularity through expansion; the addition of over 1500 stores in just over a year brought its total store count to over 16,600 in 2008.
• Tim Hortons (THI) is the largest fast food restaurant chain in Canada (and the fourth-largest in all of North America) based on sales and number of restaurants. Tim Horton's also has a food menu to complement its beverage selection, offering doughnuts, sandwiches, and other food items.
COMPETITIVE PROFILE MATRIXKey Success Factor/Strength Measure
Weight
Krispy Kreme
Dunkin Donuts
Tim Horton’
s
Starbucks
LaMar’s Doughn
utsQuality/Product Performance 0.15 3 0.45 3 0.5 2 0.3 4 0.6 2 0.3
Reputation/image 0.1 3 0.3 4 0.4 2 0.2 3 0.3 2 0.2
Manufacturing capability 0.2 3 0.6 3 0.6 1 0.2 4 0.8 2 0.4
Technological skills 0.05 3 0.15 2 0.1 2 0.1 3 0.2 3 0.2
Dealer network/distribution capability
0.05 2 0.1 2 0.1 2 0.1 3 0.2 2 0.1
New product innovation capability 0.05 2 0.1 2 0.1 2 0.1 3 0.2 2 0.1
Financial Resources 0.05 2 0.1 2 0.1 2 0.1 2 0.1 1 0.1
Relative cost position 0.05 2 0.1 2 0.1 2 0.1 2 0.1 2 0.1
Customer Service Capability 0.3 2 0.6 3 0.9 3 0.9 3 0.9 3 0.9
Sum of Weights 1
Weighted Overall Strength rating 2.5 2.9 2.1 3.3 2.3
• Analysis:
The Firm with the largest overall competitive strength rating enjoying the strongest competitive position is Starbucks followed by Dunkin Donuts and then Krispy Kreme. Here Krispy Kreme score exceeds Tim Horton’s and LaMar’s Doughnuts. So Krispy Kreme is at net competitive disadvantage against Starbucks and Dunkin Donuts.
WEIGHTED COMPETITIVE STRENGTH ASSESMENT
1st Starbucks 3.1
2nd Dunkin Donuts 2.92
3rd Krispy Kreme 2.74
4thLaMar’s
Doughnuts 2.55th Tim Horton’s 1.82
• Analysis:
After quantitatively analyzing the current market with a weighted competitive strength assessment, it can be concluded that Dunkin Donuts has a few distinct advantages over Krispy Kreme that will allow more lasting power for Dunkin Donuts. Although Krispy Kreme outperforms Dunkin’ Donuts in taste and freshness, Dunkin Donuts sweeps all of the other categories. They have greater manufacturing capabilities, distribution capabilities, customer awareness, lasting power, and coffee taste.
WEIGHTED COMPETITIVE STRENGTH ASSESMENT
OPPORTUNITIES:1. Growth in two-income households will
increase snack-food consumption2. Untouched domestic locations3. Increasing popularity of coffee shops and
bakery cafes4. Customer receiving "Hot-Donut" now
instead of waiting 5. All equipment and Uniforms are supplied6. Penetration into foreign/intl. Markets and
popularity of American foods and fashion in overseas markets
7. Americans continue to experience time-starvation
8. Acquisition of Atlanta Bread 9. Expansion of new locations (Maine, Mass)10.Entertaining opportunities moving from
home to work environment11.Channel expansion possibilities (i.e.,
Internet pre-ordering)12.Technological advancements (i.e.,
paperless ordering, predictive modeling software, hand held computers for delivery drivers)
13.On-Premise sales royalties (3%).The higher the sales, the more money received
THREATS:1. Competitors like Dunkin
Donuts, Tim Horton’s, Starbucks and other National Chains/Specialty Eateries.
2. Low-carb trend in eating preferences
3. Increasing cost of Ingredients
4. Increasing utility and fuel costs
5. All-natural, organic, healthy eating trends
6. Krispy Kreme stores went up too fast
7. Cultural differences in breakfast and snack foods
8. Increase in eating at full-service restaurants combined with a decrease in the use of fast-food restaurants
9. Store locations too scattered
Opportunities and Threats
EXTERNAL FACTOR EVALUATION (EFE) MATRIX
EXTERNAL FACTOR EVALUATION (EFE) MATRIX OF Krispy Kreme DoughnutsKey External Factors Weight Ratin
gWeighted Score
Opportunities1 Growth in two-income households will
increase snack-food consumption0.14 4 0.56
2 Untouched domestic locations 0.09 3 0.273 Increasing popularity of coffee shops and
bakery cafes0.06 3 0.18
4 Channel expansion possibilities (i.e., Internet pre-ordering)
0.07 4 0.28
5 Penetration into foreign/intl. Markets 0.08 3 0.246 Technological advancements 0.05 3 0.157 Acquisition of Atlanta Bread 0.04 2 0.088 On-Premise sales royalties 0.04 2 0.08
EXTERNAL FACTOR EVALUATION (EFE) MATRIX OF Krispy Kreme DoughnutsKey External Factors Weight Ratin
gWeighted Score
Threats1 Competitors like Dunkin Donuts, Tim
Horton’s, Starbucks and other National Chains/Specialty Eateries.
0.10 2 0.2
2 Increasing cost of Ingredients 0.08 1 0.083 Store locations too scattered 0.07 2 0.144 Increase in eating at full-service restaurants
combined with a decrease in the use of fast-food restaurants
0.08 3 0.24
5 Cultural differences in breakfast and snack foods
0.04 2 0.08
6 All-natural, organic, healthy eating trends
0.06 1 0.06
TOTAL 1.00 2.64Total weighted score for the Krispy Kreme external Factors is 2.64 which indicates that the business has above average ability to respond to external factors.
EXTERNAL FACTOR EVALUATION (EFE) MATRIX
STRATEGY FORMULATIO
N
SWOT MATRIX
OPPORTUNITIES SO STRATEGIES WO STRATEGIES
1. Increasing popularity of coffee shops and bakery cafés
1. Development of bakery cafés 1. Increase products offered in locations (i.e., coffee, sandwiches)
2. Popularity of American foods and fashion in overseas markets
2. Development of store locations in overseas markets
2. Develop Montana Mills in a way that fits the mission of KKD
3. Growth in two-income households
3. Increase locations to be convenient for busy traffic areas in several markets
3. Increase locations
4. Americans continue to experience time-starvation
4. Provide special offerings geared towards encouraging people to bring doughnuts to work
4. Offer standardized, but value pricing compared to Starbucks
5. Entertaining opportunities moving from home to work environment
5. Continue to be innovative in technological applications that can improve efficiency
STRENGTHS WEAKNESSES
1. Strong brand recognition and recall
Perishability of product
2. Wide appeal of signature glazed doughnuts
Limited product line (heavy reliance on doughnut sales)
3. Vertical integration Overextended (i.e., Montana Mills acquisition)
4. Development in international markets
Lack of locations in some areas
5. Strong channel of distribution
Pricing in some locations
SWOT MATRIX
STRENGTHS WEAKNESSES
1. Strong brand recognition and recall
Perishability of product
2. Wide appeal of signature glazed doughnuts
Limited product line (heavy reliance on doughnut sales)
3. Vertical integration Overextended (i.e., Montana Mills acquisition)
4. Development in international markets
Lack of locations in some areas
5. Strong channel of distribution
Pricing in some locationsTHREATS ST STRATEGIES WT STRATEGIES
1. Competitors like Dunkin Donuts and Starbucks
1. Focus on signature glazed doughnuts as a differentiating advantage over competitors
1. Develop new product offerings
2. Increase in eating at full-service restaurants combined with a decrease in the use of fast-food restaurants
2. Offer nutritional information with an emphasis on new low-carb, low-calorie, or organic offerings
2. Offer value-based and consistent pricing
3. Low-carb trend in eating preferences
3. Develop low-carb doughnuts 3. Expand product line with low calorie doughnuts and beverages
4. All-natural, organic, healthy eating trends
4. Develop doughnut made with organic ingredients
SPACE MATRIXInternal Strategic Position External Strategic Position
Financial (FP) +6 best, +1 worst+1_ Return on investment+1_ Leverage+3_ Liquidity+1_ Working capital+1_ Cash flow+1_ Ease of exit from market+4_ Risk level of business+ 1.7__ average
Stability (SP) -1 best, -6 worst
-3_ Stage of technological life cycle-3_ Rate of inflation-2_ Demand variability-2_ Price range of competing offerings-1_ Barriers to entry into market-4_ Competitive pressure-3_ Price elasticity of demand-2.57__ average
__-0.87__y-
coordinate
(FS + ES)Competitive (CP) -1 best, -6
worst-3_ Market share-2_ Price/quality ratio-3_ Product life cycle-2_ Customer loyalty-2_ Competition's capacity utilization-2_ Technological know-how-3_ Bargaining power-2.43__ average
Industry (IP) +6 best, +1 worst
+3_ Stage of industry/alliance evolution+3_ Growth potential+4_ Profit potential+4_ Financial stability+4_ Technological know-how+4_ Resource utilization+3_ Capital intensity+3.67__ average
__1.24__x-
coordinate
(CA + IS)
Vector magnitude: square root of (y2 + x2) = _1.51____ versus maximum 7.07 = ___weak______(strong, medium, weak)
FP
CP
+6
+5
+4
+3
+2
+1
IP+6 +5 +4 +3 +2 +1
0
-1
-2
-3
-4
-5
-6
-1 -2 -3 -4 -5 -6
SP
Conservative Market
Penetration Market
Development Product
Development Related
Diversification
Aggressive Backward, Froward
Horizontal Integration Market Penetration Market Development Product Development Unrelated/Related
Diversification
Defensive Retrenchment Divestiture Liquidation
Aggressive Backward, Froward
Horizontal Integration Market Penetration Market Development Product Development
SPACE MATRIX
V = 1.51
I/E MATRIX
So as the V quadrant suggests a defending approach, Krispy Kreme is suggested to adapt the hold and maintain strategy that concerns mainly with market penetration and product development.
GRAND STRATEGY
•KKD should evaluate their present approach to marketing seriously.
•Although the industry is growing, they are unable to compete effectively.
•They need to determine why the firms current approach is ineffective and how the company can best change to improve its competitiveness.
•As a last resort, divestiture or liquidation should be considered..
Summary of Matrices
SPACE I/E GRAND TOTALAlternative Strategies Forward Integration x 1Backward Integration x 1Horizontal Integration x x 2Market Penetration x x x 3Market Development x x x 3Product Development x x x 3Related Diversification Unrelated Diversification Retrenchment Divestiture x 1Liquidation x 1Joint Ventures
QSPM
QSPM
Ranking of Generic StrategiesThese are strategies that should be used in
implementing the specific strategies identified in the SWOT analysis
Score 1. Market Penetration
4.2
2. Market Development
3.4
3. Product Development
3.08
IMPLEMENTATION
SPECIFIC STRATEGIESBegin advertisements in TV Expand product line with low calorie doughnuts and beverages
This would increase the visibility on the market
Increase of sales
It contributes to the penetration of new and international market
Using a credible celebrity would definitely impact the sales
Expand product line with low calorie doughnuts and beverages
This would retain customers who are starting to be health conscious
It contributes to the penetration of new
Increase of sales
Diversify product mix, develop culturally oriented products,
This would attract new customers and attract international market
It will make the company more competitive
This would increase sales
SPECIFIC STRATEGIESGive emphasis to Research and Development
As noticed, KKD does not have a R & D team/department. This is a very important area for the business to be sustainable.
Hire marketing experts and food technologists and scientists
This would lead to the creation of healthy foods
Tap and collaborate with other research facilites to come up with innovative customer solutions.
Continue and develop more “Donut Making Theater”
This is attractive to the children for educational purposes as well as the rest of the consumers.
Knowing how your food was prepared safely gives you confidence on eating and buying it.
This also would improve customer experience while buying thier doughnuts.
SPECIFIC STRATEGIES
Continue with the Fund Raising Campaigns
Aside from the CSR aspect, this is also a sort of advertisment
It creates a notion to the customer that everytime they buy, they are helping the calamity victims and the less fortunate.
SPECIFIC STRATEGIES
Create a Vision and Mission Statements
Come up with a good mission statement
Penetrate Asia and the Middle East
Make use of the development aggreement .
This is a huge market to penetrate and opportunities are huge.
This would lead to increase in revenues.
Review and close unprofitable stores and focus on other domestic areas and global
This would increase capital from locations and properties
Decrease loss and develop new market
Reduce Operating Cost by 10% gearing towards Operational Efficiency
Conserve.
Supply Chain-Strategically position production areas and centralize as much as possible to save fixed cost. KKD can use Transportation Method and Assignment Method for this in order to determine the lowest possible cost in the distribution and manufacture of the products.
Establish exclusive partnership with suppliers.
Encourage Innovation within the organization in relation to operational efficiency, high performace and dollar impact.
OBJECTIVES 5–YEAR PLAN
EVALUATION
STRATEGY EVALUATION• Review /revisit underlying bases of strategy
formulation.• Examine major changes that affects the
internal and external position of the firm• Prepare revised IFEM and EFEM• Compare the existing IFE and EFE matrices with
the revised.• Check of firm is heading towards achieving its
objectives.• Make necessary changes when appropriate.
Measure organizational performance:1. Compare actual progress against planned toward meeting
stated objectives.
2. Quantitative measurements such as financial ratios, revenue growth, asset growth, must be considered.
3. Qualitative measurements must also be considered, such as
• Is the strategy internally consistent or with environment
• Is strategy appropriate in view of available resources or is it too illusionary
• Does the strategy involve an acceptable degree of risk
• Does the strategy have an appropriate time framework
4. Take corrective actions where appropriate