Winning Strategi es TEAM A2
Feb 25, 2016
Winning Strategies
TEAM A2
CONTENTS Theory & Approach of Balanced
Scorecard (BSC)
Waveriders’ Vision
Linking BSC with Strategy No 3
Advantages & Disadvantages of
BSC
BALANCED SCORECARDTHEORY & APPROACH
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.
What is BSC?
THEORY & APPROACHES? Balanced Scorecard helps the
organization to manage and view its activities by focusing on four different but equally important perspectives.
The Financial PerspectiveThe Customer PerspectiveThe Business Process
PerspectiveThe Learning and Growth
Perspective (Roberts, 2006)
WAVERIDERS’ VISION(2013 – 2017)
To be the first choice for clients where luxury meets affordability and set high level standards in the military marine industry.
Learning & Growth Perspective
Goal Measure Target
Continue to Invest in New Technology
Number Of new developments in
the product
3
Identify New Distributor who could take on the European Sales
Percent of Market Share 30%
Gross Margin (%) 15%
Install New Finance System for Euros
Percent of Customers who can track order status electronically
20%
Internal Business Perspective
Goal Measure Target
Efficiency in ManufacturingCycle Time 30 min
Percent of products defective at final test
2%
Improve Safety Specifications
Percent of audits conducted on schedule
97%
Reorganize the Sales Team Number of Sales Orders 320
Reorganize & Reduce HR Team
Number of staff reduced annually
1
Install New Finance System to Reduce Finance Workload
Number of overtime request forms
40
Percent of financial reports delivered on
schedule
96%
Customer Perspective
Goal Measure Target
Customer Satisfaction Number of follow up calls
700
Improve Safety Specifications
Number of customer complaints on Safety
Issues
5
Euros Promotional Campaigns
Cost of Marketing Campaigns
£50k
Offer Discounts Number of Discounts per annum
4
Improve Product Specifications
Percent of Performance against standards (European
Standards)
98%
Become the price leader Cost per unit benchmarked against
competitors
Finance Perspective
Goal Measure Target
Increase Profitability ROCE
Move C&B Mgr into the Finance Dept.
Number of Payroll errors
0
Increase efficiency of using the new technology
ROA
Install New Finance System Estimated Cost £25K(2013)
Identify Euro promotional campaigns
Cost of Marketing
£250k(2013)
Continue to Invest in New Technology
Cost of Investing
£150k(2017)
To be the first choice for clients
where luxury meets
affordability and set high level
standards in the military marine
industry
STRATEGY 3 MAP - WAVERIDERS
BALANCED SCORECARDPerspective # of Metrics Weight
(Balanced)Weight
(Unbalanced)Financial 2 25% 24%Customer 6 25% 24%Internal
Business Process
8 25% 28%
Learning & Growth
3 25% 24%
TOTAL 19 100% 100%
Learning & Growth PerspectiveGoal Measure Measure
UnitActual Target
Implement New Finance System to Decrease Finance Workload
Percent of financial reports delivered on
schedule(per week)
% 61% 96%(2017)
Recruit and Retain Qualified Sales Rep
Turnover of Sales Personnel
% 13% 3%(2017)
Internal Business Perspective
Goal Measure Measure Unit
Actual Target
Improve Efficiency in Manufacturing
Percent of product parts defective at final test
% 10% 1% (2017)
Improve Safety Specifications Percent of audits conducted on schedule
% 70% 97% (2017)
Reorganize the Sales Team Number of Sales Orders Score 260 320 (2017)
Reduce HR Team Number of staff reduced annually
Score 4 (3 Admins + 1 T&D Mgr )
1 (per annum) starting from
2014
Move C&B Mgr into the Finance Dept.
Number of Payroll errors(Per Annum)
Score 10
1(2017)
Identify New Distributor who could take on the European Sales
Percent of Market Share % 15% (5% leisure market + 10%
Marine)
30% (10% +20%) / (2017)
Gross Margin (%) % 7.75% 15% (2017)
Increase Innovation Interventions
Number Of new developments in
the product
Score 1 3 (per annum)
Customer Perspective
Goal Measure Measure Unit
Actual Target
Become the price leader in the Euro Market
Cost per unit benchmarked against competitors
£ £3500 (sea
spray) & £14900
(sea horse)
Increase price by £87.5 (sea spray) & £372.5
(sea horse) (increase of 2.5% by 2017)
Improve Relationships with Customers
Percent of Customers who can track order status
electronically
% 0 20% (Per Annum)
Identify Successful Euro Promotional Campaigns
Percent of New Euro Customers acquisitioned through the campaigns
% - 15%(2017)
Provide Best Value of Products to our Customers
Number of customer complaints on Safety
Issues(per month)
Score 35 5 (2013)
Percent of Performance against standards (Marine
European Standards)
% 89% 98%(2017)
Provide High Quality Service to our Customers
Number of follow up calls(per week)
Score 400 700
Finance PerspectiveGoal Measure Measure
UnitActual Target
Increase Profitability ROCE % 9..05% 13%(2017)
Increase the efficiency of using new technology
ROA % 8.3% 11.93%(2017)
Balanced Scorecard Action Plan
Objectives Measurement Target Initiative Budget
Increase Profitability ROCE 13% - -
Increase the efficiency of using new technology ROA 11.93% - -
Become the price leader in the Euro Market Cost per unit benchmarked against competitors Increase the Price -
Improve Relationships with Customers Percent of Customers who can track order status electronically 20% Install New Finance System
£12,5k
Identify Successful Euro Promotional Campaigns Percent of New Euro Customers acquisitioned through the campaigns
15% Increase Marketing Spend
£250k
Provide Best Value of Products to Our Customers
Number of customer complaints on Safety Issues(per month)
5 - -
Percent of Performance against standards (Marine European Standards)
98%
Provide High Quality Service to our Customers Number of follow up calls(per week)
700 - -
Reorganize the Sales Team Number of Sales Orders 320 - -
Reduce HR Team Number of staff reduced annually 1 Applying Redundancy £77k
Move C&B Mgr into the Finance Dept. Number of Payroll errors(Per Annum)
1 - -
Identify New Distributor who could take on the European Sales
Percent of Market Share 30% - -
Gross Margin (%) 15%
Increase Innovation Interventions Number Of new developments in the product
3
Continue to Invest in New Technology
£150kImprove Efficiency in Manufacturing Percent of product parts defective at final test 1%
Improve Safety Specifications Percent of audits conducted on schedule 97%
Implement New Finance System to decrease finance workload
Percent of financial reports delivered on schedule(per week)
61% Install New Finance System
£12,5k
Recruit and Retain Qualified Sales Rep Turnover of Sales Personnel 13% Take on new 3 Sales Rep
£96k
TOTAL BUDGET £598k
ADVANTAGES & DISADVANTAGES OF BSC
Advantages Disadvantages• Gives a clear picture of the future and a path to for getting there.• Gives a balance view of Company’s performance• Gives a balance between short – term and long – term objectives.• Identify cause and effect relationships between the different elements of an organization.• Converting intangible assets into tangible outcomes.
• The cause and effect relationships are problematic.• Not easy to convert into a measurement model.• It focuses primarily on top - down performance measurement.
THANK YOU
Q & A
REFERENCES Balanced Scorecard Institute. (1998). Balanced Scorecard
Basics. From http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx
Kanji, G. (2002) Measuring Business Excellence. London: Routledge.
Kaplan, S. , Norton, D. (1996) The Balanced Scorecard: Translating Strategy into Action. Massachusetts: Harvard Business School Press.
Kaplan, S. , Norton, D. (2004) Strategy Maps: Converting Intangible Assets into Tangible Outcomes. Massachusetts: Harvard Business School Press.