Strategic Control & Evaluation: Tools, Processes & Feedback

Core Concepts

1. Strategic Control: The Feedback Loop

Strategic control ensures that executed strategies match intended strategies by comparing actual performance against planned objectives. It involves:

• Monitoring (tracking progress)
• Evaluating (assessing deviations)
• Correcting (adjusting actions)

flowchart TD
    A["Strategic Plan"] --> B["Implementation"]
    B --> C["Monitoring\n(Real-time data)"]
    C --> D["Evaluation\n(Compare vs. Goals)"]
    D -->|"Deviation?"| E["Corrective Action\n(Adjust strategy/tactics)"]
    D -->|"On Track"| F["Continue"]
    E --> B

Why it matters: Without control, even the best strategy fails (e.g., Ncell’s failed 5G rollout in 2021 due to poor demand forecasting).

2. Types of Strategic Control

Key Tools for Strategic Control

A. Balanced Scorecard (BSC)

Developed by Kaplan & Norton, the BSC translates strategy into four perspectives:

mindmap
  root((Balanced Scorecard))
    Financial["Profitability\n(Growth, ROI)"]
    Customer["Satisfaction\n(Retention, NPS)"]
    Internal["Process Efficiency\n(Operational metrics)"]
    Learning["Innovation\n(Training, R&D)"]

Worked Example: Pathao’s BSC

• Financial: Driver earnings growth (target: 20% YoY).
• Customer: App rating >4.5 (achieved via referral bonuses).
• Internal: Delivery time <30 mins (optimized via AI routing).
• Learning: Partnered with Kathmandu University for logistics tech.

Advantages: ✔ Aligns all departments to strategy. ✔ Balances short-term (financial) and long-term (innovation) goals.

Disadvantages: ✖ Requires data accuracy (e.g., fake reviews inflate NPS). ✖ Time-consuming to implement (e.g., Himalayan Java’s initial 6-month setup).

B. Benchmarking

Comparing performance against industry leaders to identify gaps. Types:

1. Internal: Compare branches (e.g., Nabil Bank’s Pokhara vs. Kathmandu).
2. Competitive: vs. rivals (e.g., Daraz vs. Sastodeal).
3. Functional: Best practices (e.g., Toyota’s "Just-in-Time" inventory).

Case Study: NTC’s Benchmarking Failure

• Problem: NTC lagged behind India’s BSNL in fiber-optic speed (2018).
• Action: Partnered with Huawei to upgrade infrastructure.
• Result: 30% faster speeds by 2020 (but still behind Airtel Xstream).

C. Financial & Non-Financial Metrics

Worked Example: Kathmandu Traffic Routes

• Problem: Congestion on Ring Road (2022).
• Metric: Average speed dropped to 15 km/h (benchmark: 40 km/h).
• Solution: Dynamic traffic lights (reduced delays by 25%).

Performance Evaluation Methods

1. Financial Ratios

Used to assess profitability, liquidity, and efficiency. Key Ratios for Nepali Firms:

2. Non-Financial KPIs

Critical for customer-centric and sustainability strategies. Examples:

• Customer Satisfaction (CSAT): "How likely are you to recommend us?" (Scale: 1–5).
  • eSewa’s CSAT: 4.2/5 (2023).
• Employee Engagement: Survey scores (e.g., Ncell’s 78% engagement rate).
• Sustainability: Carbon footprint reduction (e.g., Himalayan Java’s 30% cut by 2025).

Strategic Evaluation: Did It Work?

A. Gap Analysis

Compares actual vs. planned performance to identify gaps. Steps:

1. Define target (e.g., "Increase market share to 30%").
2. Measure current position (e.g., "Current share: 22%").
3. Calculate gap (8% shortfall).
4. Corrective action: Aggressive marketing (e.g., Daraz’s "Free Delivery" promo).

B. SWOT Revisited (Post-Implementation)

After executing a strategy, reassess Strengths, Weaknesses, Opportunities, Threats to refine the plan. Example: NEPSE’s 2022 Performance

In the Real World

1. eSewa’s Real-Time Fraud Detection

   • Idea Used: Premise Control (monitoring assumptions about user behavior).
   • How: eSewa’s AI flags transactions with unusual patterns (e.g., sudden large payments) in real time, reducing fraud by 40% (2023).
   • Link to Unit: Shows how strategic surveillance (external monitoring) prevents losses.

2. Daraz’s Dynamic Pricing Algorithm

   • Idea Used: Implementation Control (adjusting tactics based on KPIs).
   • How: Daraz’s system raises/lowers prices based on inventory levels and competitor actions (e.g., +15% during Dashain sales).
   • Worked Example: During 2023 Dashain, Daraz’s conversion rate dropped when prices were too high → algorithm auto-adjusted, boosting sales by 22%.

3. NTC’s Load-Shedding Prediction Model

   • Idea Used: Special Alert Control (crisis response).
   • How: NTC uses weather data + historical demand to predict blackouts and preemptively reroute power (reduced outages by 35% in 2022).
   • Visual:

     flowchart LR
         A["Weather Data"] --> B["Demand Forecast"]
         B --> C["Power Rerouting"]
         C --> D["Reduced Outages"]

Exam Tip

How This Unit is Tested

1. Definitions & Differences (5 marks):

   • Distinguish between strategic surveillance and implementation control.
   • Example question: "Explain how benchmarking differs from the balanced scorecard. Use Ncell and Daraz as examples."

2. Case Analysis (10 marks):

   • Given: A company’s financial/non-financial data.
   • Task: Identify one control tool (e.g., BSC) and two KPIs to evaluate its strategy.
   • Example:

     "Nabil Bank’s ROI is 12%, but its NPS is 38. Suggest a strategic control tool and two metrics to improve."

3. Scenario-Based Questions (15 marks):

   • Given: A real-world scenario (e.g., "Pathao’s rider attrition rate is 30%").
   • Task: Apply gap analysis or benchmarking to propose solutions.
   • Example:

     "Khalti’s UPI integration failed in 2020. Analyze this using premise control and suggest corrective actions."

4. Diagram-Based (5 marks):

   • Draw a balanced scorecard or control process flowchart for a given company (e.g., Himalayan Java).

Top 3 Mistakes to Avoid: ❌ Ignoring non-financial metrics (e.g., only focusing on ROI for a customer-facing firm like eSewa). ❌ Not linking tools to strategy (e.g., using benchmarking without comparing to a clear goal). ❌ Overcomplicating answers (examiners prefer concise, structured responses with real examples).

Quick Revision Checklist

Before the exam, ensure you can: ✅ Define strategic control and its four types. ✅ Explain the balanced scorecard with a Nepali company example. ✅ List three financial and three non-financial KPIs with applications. ✅ Perform a gap analysis on a given scenario (e.g., NEPSE’s market share). ✅ Describe how eSewa/Khalti/Daraz use strategic control tools in practice.