Appraising the strategy related activities is known as strategy evaluation. Appropriateness of current strategy is in changing environment is measured in the strategy evaluation process. Strategy evaluation is as significant as strategy formulation because it throws light on the efficiency and effectiveness of the comprehensive plans in achieving the desired results.

Strategic evaluation focuses on monitoring and measuring the actual performance. Coordination among the managers, group, division and SBU if any in the organization determines the significance of strategic evaluation. In the organization, strategic evaluation is significant because of;

  • developing inputs for new strategic planning,
  • congruence between decision and intended strategy,
  • the urge for feedback,
  • appraisal and reward,
  • development of the strategic management process,
  • judging the validity of strategic choice etc.

Strategy evaluation helps to assess the validity and fitness of the various strategic alternatives in the organization. The purpose of strategic evaluation is to measure the effectiveness of the organizational vision, mission, goals and objectives in achieving its sustainability and competitiveness. 

Following are the characteristics of strategy evaluation;

  • Reviewing internal and external factors
  • Measuring and monitoring performance,
  • Testing the effectiveness of strategy,
  • Historical analysis,
  • Feedback discussion.