Strategic management Functional strategy Strategy Implementation Strategy Evaluation/Control

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STRATEGIC MANAGEMENT
Functional Strategy
Strategy Implementation
Strategy Evaluation/Control
Group (01)
Adiba Riyasaat (01) ………….. Marketing & Financial Strategy (20%)
Ammara Faiz (02) …………..... R&D and Operation Strategy (20%)
Amna Khalid (03) ……………. Purchasing & logistics Strategy (20%)
Anmol baber (05) …………….. HR & information Strategy (20%)
Aneela Mustufa (04) ………… Strategy implementation & Strategy Evaluation and
Control (20%)
Strategic Management
Sir Rashid Saleem
University of Education
Lower Mall Campus
Lahore
December 07, 2015

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Abstract
Strategic management includes three strategies (Functional strategy, strategy implementation,
strategy evaluation and controls). Functional strategy tells about the core functions of marketing,
finance, human resource and operational strategy. Programs, budgets, job design, MBO and
T&D all are helpful in strategy implementation. We can control the project by evaluating
financial, HR, marketing and operational performances.

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FUNCTIONAL STRATEGY
CORE COMPITENCIES
Core competencies are the combination of pooled knowledge and technical capacities that allow
a business to be competitive in the marketplace. Theoretically, a core competency should allow a
company to expand into new end markets as well as provide a significant benefit to customers. It
should also be hard for competitors to replicate.
Core competencies fulfill three criteria:
1. Provides potential access to a wide variety of markets.
2. Should make a significant contribution to the perceived customer benefits of the end
product.
3. Difficult to imitate by competitors
EXAMPLE
A company's core competencies may include precision mechanics, fine optics, and micro-
electronics. These help it build cameras, but may also be useful in making other products
that require these competitors
MARKETING STRATEGY
Marketing strategy is the fundamental goal of increasing sales and achieving a
sustainable competitive advantage. Marketing strategy includes all basic short-term and long-
term activities in the field of marketing that deal with the analysis of the strategic initial situation
of a company
INTENSIVE STRATEGIES
Market penetration, market development, and product development are sometimes referred to as
Intensive strategy because they require intensive efforts to improve a
firm's competitive position with
Existing products

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 Market Penetration--seeking increased market share for present products in present
markets
 Market Development-introducing present products in new geographic areas
 Product Development-seeking increased sales by improving or modifying present
products
LINE EXTENSION
Line extension refers to the expansion of an existing product line. For instance, a soft drink
manufacturer might introduce a "Diet" or "Cherry" variety to its cola line, while a toy
manufacturer might introduce new characters or accessories in its line of action figures. In
short, line extension adds variety to its existing product for the sake of reaching a more
diverse customer base and enticing existing customers with new options.
BRAND EXTENSION
Brand extension refers to the expansion of the brand itself into new territories or markets. For
instance, if a soft drink manufacturer unveils a line of juices or bottled water products under its
company name, this would constitute an example of brand extension. The brand, or company, is
an established name, and so the name alone can serve to drive customers to try new products
completely unrelated to the older product line
Line Extension Benefit
 Gain more potential customers
 Offer customers more variety
 Greater marketing efficiency
 Greater production efficiency
 Lower promotional costs
 Increased profits
Brand Extinction Benefits

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 More potential customers
 The opportunity to sell more to each customer
 Greater marketing efficiency
 Greater production efficiency
PUSH STRATEGY
A push promotional strategy involves taking the product directly to the customer via whatever
means, ensuring the customer is aware of your brand at the point of purchase.
"Taking the product to the customer"
Examples of push tactics
 Trade show promotions to encourage retailer demand
 Direct selling to customers in showrooms or face to face
 Negotiation with retailers to stock your product
 Efficient supply chain allowing retailers an efficient supply
 Packaging design to encourage purchase
 Point of sale displays
PULL STRATEGY
A pull strategy involves motivating customers to seek out your brand in an active process.
"Getting the customer to come to you"
Examples of pull tactics
 Advertising and mass media promotion
 Word of mouth referrals
 Customer relationship management
 Sales promotions and discounts
PRICING STRATEGY

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. A pricing strategy takes into account segments, ability to pay, market conditions, competitor
actions, trade margins and input costs, amongst others.
Premium pricing; high price is used as a defining criterion. Such pricing strategies work in
segments and industries where a strong competitive advantage exists for the company.
Example: Porches in cars and Gillette in blades.
Penetration pricing; price is set artificially low to gain market share quickly. This is done when
a new product is being launched. It is understood that prices will be raised once the promotion
period is over and market share objectives are achieved.
Example: Mobile phone rates in India; housing loans etc.
Economic Pricing; no-frills price. Margins are wafer thin; overheads like marketing and
advertising costs are very low
Example: Friendly wash detergents; Nirma; local tea producers.
Skimming strategy; high price is charged for a product till such time as competitors allow after
which prices can be dropped. The idea is to recover maximum money before the product or
segment attracts more competitors who will lower profits for all concerned.
Example: the earliest prices for mobile phones,
ADVERTISING STRATEGY
An advertising strategy can be defined as a blueprint to help sell a given product to consumers.
There are almost as many different advertising strategies are there are products to advertise, and
each company follows its own unique strategy plans
Advertising and marketing campaigns have considerably increased The Coca-Cola Company’s
(KO) brand power over the years. In 2013, Coca-Cola spent $3.37 billion, or 7.0% of it’s 2013
revenues, on advertising—including in-store activations, loyalty points programs, and point-of-
sale marketing.
DIFFERENTIATION

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Differentiation is the incorporation of attributes, such as quality or price, into a product to
encourage the intended customers to perceive it as different and desirable. Example, if your
company sells seat belts to automotive manufacturers, perhaps your unique value is never-fail,
on-time delivery with no rejected belts. If other seat belt manufacturers are not meeting these
desired goals, you will have a unique advantage against your competition, and will have
differentiated your seat belts from those of your competitors.
POSITIONING
Positioning is how you provide your product or service brand identification as you go to market.
It is the next step after you have determined how to differentiate your product or service. In the
seat belt example, the seat belt manufacturer can market itself on the premise that it does not
miss delivery times and that its products are free of flaws. The product is positioned against
those of competitors on the basis of timely delivery and excellence in manufacturing. All of the
seat belt manufacturer's major marketing efforts should emphasize this positioning in the
marketplace.
FINANCIAL STRATEGY
To get the most out of your financial resources and achieve sustainability you'll need to
successfully manage all your funding and financing sources in an overarching strategy for your
organization.
INVESTMENT
An asset or item that is purchased with the hope that it will generate income or appreciate in the
future. Investing is actually pretty simple; you're basically putting your money to work for you
so that you don't have to take a second job, or work overtime hours to increase your earning
potential. There are many different ways to make an investment, such as stocks, bonds.
DEBT TO-EQUITY RATIO
The debt to equity ratio is a financial, liquidity ratio that compares a company's total debt to total
equity. The debt to equity ratio shows the percentage of company financing that comes from
creditors.

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Formula
Debit to-equity ratio = Total liabilities/Total equity
Example; Assume a company has $100,000 of bank lines of credit and a $500,000 mortgage on
its property. The shareholders of the company have invested $1.2 million.
DER = $100,000 + $500,000 / $1,200,000 = .5
DIVIDEND POLICY
A dividend policy is a company's approach to distributing profits back to its owners or
stockholders. If a company is in a growth mode, it may decide that it will not pay dividends, but
rather re-invest its profits (retained earnings) in the business.
The dividend payout ratio measures the percentage of a company's net income that is given to
shareholders in the form of dividends.
Example, let's assume that Company XYZ distributed four regular quarterly dividend payments
of $0.25 each, for a total annual dividend payment of $1.00 per share. Over the same period,
XYZ reported net earnings of $10 per share.
$1 / $10 = 10%
LEVERAGED BUYOUT
The acquisition of a publicly-traded
company, often by a group of private investors, that is financed with debt.Often, the acquirer in a
LBO issues junkbonds in order to raise the capital necessary for the acquisition. Aleveraged buy
out allows a company to be taken over with little capital, but it can be a high risk endeavor. A
leveraged buyout is one of the ways in which a business, acting as an investor, can purchase
control of another business. Leveraged buyouts, or LBOs, may be available when other types of
buyouts aren't for small businesses that lack the cash needed to acquire another business.

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RESEARCH & DEVELOPMENT STRATEGY
TECHNOLOGY LEADERSHIP:
Leader is called pioneer
Pioneering an innovation.
That strategy which is to be the first firm to market new technologies. ( exiting and dangerous
strategy).
This strategy involves pioneer firms to develop first version of the new product and demonstrate
that market exists.
Technology leadership fits well with differentiation.
Example:
Nike spends more than most in the industry on R&D to differentiate the performance of the
athletic shoes from that of its competitors.
TECHNOLOGY FOLLOWER:
follower is called copy-cat
Imitating the products of competitors. That strategy which is to be innovative imitator of
successful products thus minimizing the risk and cost start-up.
A follower strategy makes sense with cost leadership strategy.
Example:
Dean Foods Company, the president Mr.Howard Dean says that;
We are able to have the customer come to us and say, if You can produce X, Y and Z product
for the same quality and service.
OPERATION STRATEGIES:
STANDARDIZATION

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Achieving maximum productivity through standardization of service product and service design
and delivering global economy of scale and lowest unit cost which is an important tenet of
economics ( product and production orientation)
Standardization means “one size fits all”.
CUSTOMIZATION:
On the other hand customization refers to the tailoring of the campaign according to the needs of
an individuals or group of individuals. These are high margin products where the volumes are
low and the buyers are few
LAYOUT DESIGN:
To achieve through skill imagination and resourcefulness in layout and work methods,
production effectiveness and efficiency while supporting a high quality of work life.
PROCESS SELECTION is basically the way goods or services are made or delivered, which
influences numerous aspects of an organization, including capacity planning, layout of facilities,
equipment and design of work systems. Process selection is primarily used during the planning
of new products or services that is subject to technological advances and competition. Process
selection is dependent on the company's process strategy, which has two main components:
capital intensity and process flexibility.
MAKE-OR-BUY DECISION:
The make-or-buy decision is the action of deciding between manufacturing an item internally (or
in-house) or buying it from an external supplier (also known as outsourcing). Such decisions are
typically taken when a firm that has manufactured a part or product, or else considerably
modified it, is having issues with current suppliers, or has reducing capacity or varying demand.
FULL INTEGRATION:
Should be considered only when that activity or functional adds significant value to the
company’s products or services in addition to providing advantage.
TAPER INTEGRATION:
A firm should always produce at least some of the activity or function if that activity has the
potential for providing the company competitive advantage.

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PARTIALLY INTEGRATION:
The activity contributes highly to the company’s products or services. The firm should purchase
it through long term contracts with trusted suppliers and distributors.
OUTSOURCING:
A firm should consider outsourcing any activity or function that has low potential for
competitive advantage if that activity constitutes only a small part of the total value of the firms
products or services, it should be purchased from open market ( assuming that quality providers,
of the activity are plentiful)
PURCHASING STRATEGY
Purchasing strategy deals with obtaining the raw materials, parts, and suppliers needed to
perform the operation’s functions.
 VENDOR SELECTION AND DEVELOPMENT:
The decision making that occurs when a firm selects a supplier in order to minimize the risk of
choosing the wrong one. Strategies used include the rating of vendors on the scale, the practice
of choosing vendors from an approved list, multiple sourcing, and choosing the lowest priced
vendor to minimize the potential for financial loss.
Vendor development involves four stages
1) Survey stage:
Survey involves collecting information on different suppliers of the desired materials.
2) Enquiry stage:
After a list of possible suppliers complied, the next step is to inquire a few of them further.it
involves a detailed analysis of suppliers activities furnished by vendors or collected by the
company
3) Negotiation stage:
The vendors who are successful in the enquiry stage may be called for negotiations in order to
discuss business possibilities.
 During this stage, various terms namely credit, quantity discount, quality specifications
etc. can be decided.
 Finally a list of approved vendors drawn.

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 Accordingly, purchase orders are placed with the approved vendors
 Several aspects of buying techniques are used at third stage.
4) Experience and evaluation stage:
At this stage, the buyer evaluates and appraises the performance of the vendors. The objective is
to improve the performance of the vendors in which they are deficient.
The evaluation is done especially on two counts, namely quality (judge by rejection of lot-size)
and delivery (judge by delay of delivery.
 PARALLEL SOURCING:
“Two suppliers are the sole suppliers of two different parts, but they are also back up suppliers
for each other’s parts.”
Parallel sourcing as defined by RICHARDSON (1993), therefore provides a way to maintain
competition between suppliers that have similar capabilities and deliver the same type of
components.
Parallel sourcing is a strategy where the buyer seeks to keep its option open, exploring other
sources, and thereby putting pressure on the single source supplier.
 LONG-TERM CONTRACTS:
After adopted the source for raw material, the firm should purchase it through long-term
contracts with trusted suppliers or distributors.
“In a long term contract, the buyer offers a fixed set of prices to the first supplier, if the supplier
accepts the contract, the buyer switches suppliers only in the event of supplier 1’s bankruptcy”.
Long term contracts financing possible. This legal template is for a supplier to sell products or
materials to a purchaser at pre-determined prices with minimum/maximum annual quantities, all
sales being made against purchase orders.
 TENDER NOTICES:
It is an invitation from the owner to the contractor to execute some work at specified cost in
specified time.it is published in the form of tender notice in newspapers, noticeboards, gussets
etc. according to the cost of works.
For the contract to be valid, there must be an offer from the owner in the form of tender notice to
get some specified work to be executed and there must be an acceptance from the contractor to
execute the work, both the offer and the acceptance must be legal and definite.
Information to be given in a tender notice.
 Name of department inviting tender
 Name of work and location
 Designation of officer inviting tender

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 Last date and time of receipt of tender
 Period of availability of tender document
 Cost of tender document
 Time of completion and time o contract
 Earnest money deposit to be paid
 Date, time and place of opening the tender
 Designation of the officer opening the tender
LOGISTICS STRATEGY
 INBOUND LOGISTICS:
Inbound logistics is an integral element of business operations for a manufacturing firm,
involving the processes of receiving, storing and distributing raw materials for use in
production. It is the first stage in value chain, which business management expert Michael
Porter outlined in his 1985 book "Competitive Advantage." Small business manufacturers
may not manage as much inventory, but should still optimize inbound logistics processes
 OUTBOUND LOGISTICS:
The movement of material associated with storing, transporting, and distributing goods to its
customers.
Outbound logistics are the processes involved in moving products from the creating firm to the
firm’s customers. This portion of logistics is completely separate from taking and using raw
materials, otherwise known as inbound logistics. This field relies heavily on transportation and
storage of finished goods. Outbound logistics refers to the product from the seller’s standpoint,
and product may mean different things to different people.
OUTBOUND PROCESS:
A business goes through several stages in the outbound logistics process. The sales department
first receives a purchase order from the client. The sales department checks inventory availability
to ensure they can fulfill the order. The sales department then sends the customer order to the
warehouse for picking and packing. The order is shipped and a warehouse clerk updates
inventory levels. The business bills the client and eventually collects cash for the order
HRM STRATEGY:
“A co-ordinate set of actions aimed at integrating an organization’s culture, organization, people

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and system in order to get achieve the business goals.”
HUMAN RESOURCE PLANNING (HRP):
HRP also referred to as workforce planning or personnel planning.
“Process of determining the human resource needs of an organization and ensuring that the
organization has the right number of qualified people in the right time”.
RECRUITMENT AND SELECTION:
RECRUITMENT:
“Process of seeking and attracting a pool of people from which qualified candidate for the job
vacancies can be chosen”
Sources of recruitment:
Internal sources:
 Employees.
 Job posting and bidding.
External sources:
 Advertising.
 Employment agencies.
 Temporary help agencies.
 Employee leasing companies.
 Campus recruiting.
 Internet recruiting.
 Employee referrals.
SELECTION:
“The process of choosing from among available applicants the individuals who are most likely to

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successfully perform a job”.
Steps in the selection process:
1. Completion and screening of the application form.
2. Preliminary interview.
3. Employment testing.
4. Diagnostic interview.
5. Reference checking.
6. Final decision.
TRAINING AND DEVELOPMENT:
“Learning process that involves the acquisition of skills, concepts, rules or attitudes to enhance
employee performance.”
Methods of training:
 On the job training.
 Job rotation/cross training.
 Apprenticeship training.
 Class room training.
 Virtual classroom.
PLANNING AND CONTROLLING (P&C):
 Human resource planning is a process that identifies current and future human resource
needs for an organization, based on the goals and objectives set by upper management.
Human resource planning serves as a link between human resource management and the
overall strategic plan of an organization.
 Human resource controlling applies the concept, principles, and tools of controlling to

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human resource management. HR controlling systems usually provide information such
as staff costs, the costs of the HR function and traditional employee statistics without any
problems.
INDUSTRIAL AND EMPLOYEES RELATIONS:
Sound industrial relations and effective social dialogue are a means to promote better wages and
working conditions as well as peace and social justice. As instruments of good governance they
foster cooperation and economic performance, helping to create an enabling environment for the
realization of the objective of Decent Work at the national level.
CAREER MANAGEMENT:
Career management is the process through which employees:
 Become aware of their own interests, values, strengths, and weaknesses
 Obtain information about job opportunities within the company
 Identify career goals
 Establish action plans to achieve career goals
INFORMATION SYSTEM STRATEGY:
“Strategic information systems (SIS) are information systems that are developed in response to
corporate business initiative. They are intended to give competitive advantage to the
organization.”
MANAGEMENT INFORMATION SYSTEM (MIS):
Provide information in the form of prespecified reports and displays to support business decision
making.

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For example: sales managers may use their networked computers and web browsers to receive
instantaneous displays about the sales results of their products and access their corporate intranet
for daily sales analysis reports that evaluate sales made by sales persons.
MARKETING INFORMATION SYSTEM (MKIS):
A marketing information system is a management information system (MIS) designed to support
marketing decision making. Jobber (2007) defines it as a "system in which marketing data is
formally gathered, stored, analyzed and distributed to managers in accordance with their
informational needs on a regular basis."
HUMAN RESOURCE INFORMATION SYSTEM (HRIS):
Information system that support human resource management activities such as recruitment,
selection and hiring, job placement and performance appraisals and training and development.
ENTERPRISE RESOURCE PLANNING:
Integrated cross functional software that reengineers manufacturing, distribution, finance, human
resource, and other basic business processes of a company to improve its efficiency, agility and
profitability.
KNOWLEDGE MANAGEMENT:
Knowledge management (KM) is the process of capturing, developing, sharing, and effectively
using organizational knowledge. It refers to a multi-disciplinary approach to achieving
organizational objectives by making the best use of knowledge.
CREATING CORPORATE SCENARIO AND STRATEGY SELECTION:
A Business Scenario describes:
 a business process, application, or set of applications, that can be enabled by the
architecture

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 the business and technology environment
 the people and computing components (called "actors") who execute the scenario
 the desired outcome of proper execution
Creating the Business Scenario
The Overall Process
1 - Identifying, documenting and ranking the problem driving the scenario
2 - Identify the business and technical environment of the scenario and documenting it in
scenario models
3 - Identifying and documenting desired objective
4 - Identifying the human actors (participants) and their place in the business model
5 - Identifying computer actors (computing elements) and their place in the technology
model
6 - Identifying and documenting roles, responsibilities and measures of success per actor;
documenting the required scripts per actor, and the results of handling the situation
7 – Checking and refining only if necessary
STRATEGY IMPLEMENTATION
Strategy implementation is a term used to describe the activities within an organization to
manage the execution of a strategic plan.

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PROGRAMS, BUDGETS AND PROCEDURES
Programs: is a statement of the activities or steps needed to accomplish a single use plan
Its purpose is to make the strategy “action Oriented”
Budget: is a statement of corporation’s program in terms of dollars
Procedures: are system of steps or techniques that describe in detail how a particular task or job
is to be done
It is a detailed of various activites that must be carried out to complete a corporation’s program
ORGANIZATION STRUCTURE AND LIFE CYCLE
Organization structure: it refers to the way in which a group is formed, its line of
communication and its means for channeling authority and making decision.
It clarifies the formal relationship in the various positions within the organization
Oraganizational life cycle: Describes how organization grow, develop and eventually decline.
 Stages:
 Birth Stage
 Growth
 Maturity
 Decline
 Death
JOB DESIGN
Job design: study of individual tasks to increase relevance
The process of defining how work will be performed and what tasks will be required in a given
job
CENTERALIZATION VS. DECENTERALIZATION
Centeralization: the degree which decision making is concentrated at a single point in the
organizations
Decenteralization: the degree in which decision making is pushed down the managers who are
closest to the action

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STAFFING/ R&S
STAFFING is defined as filling and keeping filled positions in the organization.
Staffing is the process of filling positions/posts in the organization with adequate and qualified
personnel
For example: with changes in technology need for hiring workers who can work with high
technology demand
RECRUITMENT :Process of locating, identifying, and attracting capable candidates Can be
for current or future needs Critical activity for some corporations
In the recruitment, a pool of eligible and interested candidates is created for the selection of most
suitable candidates.
Its purpose is to provide a large enough group of candidates so that the organization will be able
to select the qualified employees it needs.
SELECTION: series of steps from initial applicant screening tofinal hiring of the new
employee.
It involves evaluating and choosing among job candidates
T&D
TRAINING
Training is the process of teaching new or current employees the basic skills they need to
perform their jobs.
To improve the knowledge, skills, and abilities of employees.
DEVELOPMENT
It focuses on the personal growth & skills. This is essential in keeping the staff motivated about
learning new concepts and keeping the department profitable
WHY T & D
No one is a perfect fit at the time of hiring and some training & development must take place.
Planned development programs will return values to the organization in terms of :
• increased productivity
• reduced costs

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• Morale
As we know that training and development refers to the process to obtain or transfer KSA
(knowledge, skills and abilities) needed to carry out a specific activity or task ; therefore,
benefits of training and development both for employer and employees are strategic in nature and
hence much broader. In order to meet the current and future challenges of our business, training
and development assumes a wide range of learning actions, ranging from training of the
employees for their present tasks and more so, knowledge sharing to improve the business
horizon and customer’s service
LEADERSHIP:
Introduction
Leadership is the ability to develop a vision that motivates others to move with a passion toward
a common goal. So leadership is a process by which a person influences others to accomplish an
objective and directs the makes it more cohesive and coherent
Definition
Leadership The ability to influence agroup toward theachievement of goals.Management Use of
authority in her entin designated formal rank to obtain compliance from organizational members.
 Leading People
 Influencing People
 Commanding People
 Guiding People
MANAGING CULTURAL DIVERSITY
Understanding Diversity
 The concept of diversity is based on individual acceptance and respect.
 It is understanding that individuals are unique and different
Definition
It is the ongoing process of incorporating the recognition of workforce and customer differences
into all core business management functions, communications, process and services to create a
fair, creative and effective organization.
Why?
Managing cultural diversity in an effective way can lead to a range of benefits. It allows you to
enhance the synergy of workforce and provide a sustainable competitive advantage in the market
place.

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MANAGEMENT BY OBJECTIVES (MBO)
A comprehensive and formal organization wide goal-setting and appraisal program requiring:
 Setting of organization’s goals
 Setting of departmental goals
 Discussion of departmental goals
 Defining expected results (setting individual goals)
 Conducting periodic performance reviews
 Providing performance feedback
TOTAL QUALITY MANAGEMENT (TQM)
Quality
Quality is the customer satisfaction
It is a comprehensive and structured approach to organizational management that seeks to
improve the quality of products and services through ongoing refinements in response to
continuous feedback
OR
A comprehensive, organization wide effort to improve the quality of product and services
applicable to all organization
Or
Meeting quality expectations as defined by the customer
Explanation:
o TQM is a philosophy which applies equally to all parts of the organization
o All staff are empowered
STRATEGY EVALUATION AND CONTROL
MANAGEMENT CONTROL AND ITS TYPES
Management control: A process of monitoring performance and taking action to ensure desired
results.
It sees to it that the right things happen in right ways and the right tine.
Types of Control:

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Preliminary: sometimes called the feed forward controls, they are accomplished before a work
activity begins.
They make sure that proper directions are set and that the right resources are available to
accomplish them
Concurrent: Focus on what happens during the work process. Sometimes called steering
controls, they monitor ongoing operations and activities to make sure that things are being done
correctly.
Post action: Sometimes called feedback controls, they take places after an action in completed.
They focus on end results, as opposed to inputs and activities.
Managers have two broad options with respect to control
i. They can rely on people to exercise self (internal) over their own behavior.
ii. Alternatively, managers can take direct action (external) to control the behavior of others.
MEASURING ORGANIZATIONAL PERFORMANCE
ACTIVITY BASED COSTING
Activity: An Activity is an event that incurs costs
Activity Based Costing is a management accounting approach which allocate all direct and
indirect costs to cost objects in order to help management understand critical business
information.
i. Direct Costs (salaries for project staff and material required for a particular project)
ii. Indirect Costs ( Taxes, administration, security cost)
Features:
 ABC system provides accurate costing of product/services
 ABC system helps in benchmarking other products
 It supports performance management
 Implementing ABC system requires a big budget initially.
FINANCIAL PERFORMANCE
A subjective measure of how well a firm can use assets from its primary mode of business and
generate revenues. This term is also used as a general measure of a firm's overall financial
health over a given period of time, and can be used to compare similar firms across the same
industry or to compare industries or sectors in aggregation

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In a simple example, an automaker may suddenly see a drastic drop in the sales of its less fuel-
efficient cars. It knows fuel prices have recently surged to record highs, so it reacts by using
incentive programs to emphasize sales of its cars that offer better fuel efficiency
MARKETING PERFORMANCE:
Measurement and management (MPM) is the systematic management of marketing resources
and processes to achieve measurable gain in return on investment and efficiency, while
maintaining quality in customer experience
Other reasons why companies evaluate marketing performance include:
 Monitoring marketing's progress towards its annual goals
 Determining what areas of the marketing mix – product, price, place, and promotion –
need modification or improvement to increase some aspect of performance
 Assessing whether company goods, services, and ideas meet customer and stakeholder
needs
 Evaluating Marketing Performance
OPERATIONAL PERFORMANCE:
This is a measure of how well the company is doing. Many different measures, such as expense
ratios, sales performance and policy terminations are taken into consideration when evaluating
operating performance.
HR PERFORMANCE:
 Human Resource Controls, monitors, regulates the performance of Human Resource of
an Organization
 The performance of employee is evaluated by conducting performance appraisal method
 The performance of human resource largely depends on the success or failure of the
organization

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