Strategic Plan, Part III: Balanced Scorecard
BUS/475 – Integrated Business Topics
A Balanced Scorecard is, “A set of four measures directly linked to a company’s strategy: financial performance, customer knowledge, internal business processes, and learning and growth” (Pearce & Robinson, 2009, p. 202). Healthy Place needs to develop a balanced scorecard in order to assist in defining the company’s mission, values, vision, and SWOTT analysis. Herein, the four perspectives, financial performance, customer knowledge, internal business processes, and learning and growth will be discussed as they relate to the Healthy Place mission, values, vision, and SWOTT analysis.
Shareholder Value/Financial Perspective
“If we succeed, how will we look to our stakeholders” (BSI 2009, ¶5). Healthy Place will need to look at its asset utilization, customer satisfaction, increased net revenues, minimizing store production, and achieving financial stability. One way to measure these items is to monitor Earnings per share, Operating cost, revenue growth, Return on interest, and Return on capital. Implementing the objectives and performance measuring tools into the company’s daily routing, Healthy Place will be able to achieve the company’s goals that were defined in the mission and vision statement.
Customer Value Perspective
“To achieve our mission, how must we appear to our customers” (BSI 2009, ¶5). Healthy Place is a new company to the downtown area and the customers will be the ones determining the success of the company. Customer satisfaction, increase in market share, the delivery of products and services that are consistent with value and quality to everybody including special populations, increase in public awareness and visibility in the community in a way that will engage and expand community support and improve the stores brand image are the strategic objective involved with customers.
The best way for Healthy Place to achieve these objectives is to develop a set of performance tools that will measure the success in achieving these goals. The company will need to monitor customer satisfaction at all times by continuous surveys, promotions, increase in market share, store brand awareness, and constantly finding new products at lower prices. Poor company and employee performance reviews from customers can lead to the company being unsuccessful. This is why it is important for Healthy Place to know how customers view the store and if that view is the same one that is defined in the mission and vision statement. A way to initiate more customers is to expand into other cities and offer the customer a rewards program. These activities are designed to achieve customer satisfaction.
Process/Internal Operations Perspective
“To satisfy our customers, at which processes must we excel” (BSI 2009, ¶5). Healthy Place strategic goals should be developed in a way that will internally meet the customer’s needs and satisfaction. All strategic goals should be defined with the purpose of keeping the company running smoothly and in a way that will help to achieve the promises being made in the mission and vision statement. The strategic goals for Healthy Place are to improve business processes and efficiencies, acquire additional services and business options, and improve marketing of store and the marketing of the products and services.
These strategic objectives should be monitored on a daily basis to ensure an overall satisfactory outcome for the company. The best way for Healthy Place to ensure this is to create a set of performance tools that will measure the objective to ensure that they are being achieved. The company needs to decrease the number of duplicate products or services being offered, monitor the revenue being earned from new programs, orders are being received on time, increase in products and services being purchased by local vendors, and ensure employee and customer satisfaction through constant surveys. Healthy Place should initiate a frequent purchasing program and a new marketing campaign that will assist in generating new customers.
Learning and Growth Perspective
“To achieve our mission, how must our organization learn and improve” (BSI 2009, ¶5). This perspective can be considered the foundation upon how the balance scorecard is built and it will include employee training and the company’s cultural attitude and how these two are related to the company’s self-improvement. This area of the balance scorecard is to focus the company on how they can facilitate further improvements while addressing technological changes. The strategic objectives should focus on maintaining competent employees who constantly develop their skills and information from constant training.
The strategic objectives for Healthy Place will be to recruit constantly and retain a highly skilled workforce, increase employee satisfaction and retention, improve organizational trust & teamwork, and improve use of technology in the company. The performance measures that Healthy Place will need to implement are ensuring proper of products and services, constant training and retraining, customer satisfaction, and to decrease employee turnover rate. The company also needs to initiate a staffing optimization analysis, online billing upgrade that will allow companies to purchase services and products and pay later, and service training seminars and workshops outside the building.
Healthy Place has been able to develop a mission and vision statement that will help the company be successful and grow in the future. The best way for Healthy Place to do this is to define a strategy that can easily be communicate to management this strategy needs to incorporate the companies views, goals, and objectives. The measurements that the company needs to use to achieve the views, goals and objectives of the company need to be defined. The best way for a company to do the above is to develop a balance scorecard. The balance scorecard is a very vital component of any business and no two balance scorecards can be the same. When creating a balance scorecard one has to keep in mind that what works for one company will not always be a good fit for another company.
The four perspectives defined herein are: Financial, Learning and Growth, Customer, and Internal Process. With each perspective, Healthy Place has defined at least three strategic objectives; targets, and initiatives performance measures. The company will need to incorporate all the performance measures on a daily basis into the store to be able to fully achieve the goal of 100% customer satisfaction.
Balanced Score Card
Shareholder Value/Financial Perspective
•Increase market share over prior year
•Increase net revenues
•Minimizing store production costs
•Decrease in unit cost
•Increase operating cash flow over prior year
•Achieve financial sustainability
•Earnings per share
•Return on capital
•Return on interest
•20% profit margin
•2 – 6% market share Increase over the next 4 years
•Acquire a Competitor
•Deliver services consistent in value and quality
•Increase public awareness and visibility
•Engage and expand community support
•Increase Market Share
•Improve Brand Image
•Deliver quality services to special populations
•100% customer satisfaction
•25% increase of customers for the next 5 years
•Expand into other cities
Internal Process Perspective
•Improve business processes and efficiencies
•Make investments infrastructure
•Acquire additional services & business
•Improve marketing of store & products
•% Decrease in Redundancies on certain products & services
•Revenue from New Programs
•Employee & customer satisfaction
•30% increase of customers
•15% reduction in customer returns over the next 3 years
•Expand into having a frequent purchase Card Program
•New Marketing Campaign
Learning & Growth Perspective
•Recruit and retain a highly skilled workforce
•Increase employee satisfaction and retention
•Improve organizational trust & teamwork
•Improve Use of Technology
•Ensure proper organizational learning based on data, outcomes & experience
•Proper monitoring, training, and employee happiness
•Decrease in employee turnover rate
•100% involvement from all employees
•Staffing Optimization Analysis
•Online Billing Upgrade
Balanced Scorecard Institute (2009) Balanced Scorecard Basics. Retrieved March 5, 2010from URL: http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx
Pearce, J. A. II, & Robinson, R. B. (2009). Strategic management: Formulation, implementation, and control (11th ed.). New York: McGraw-Hill.
Written Assignment Feedback
|Student/Group Name(s) Course BUS475||Date 3/10/10 Assignment Balanced Scorecard|
|Subject Matter: Key elements of assignments covered Content is comprehensive/accurate/persuasive Displays an understanding of relevant theory Major points supported by specific details/examples Research is adequate/timely Writer has gone beyond textbook for resources||3/3|
|Higher-Order Thinking: Writer compares/contrasts/integrates theory/subject matter with work environment/experience At an appropriate level, the writer analyzes and synthesizes theory/practice to develop new ideas and ways of conceptualizing and performing||2/2|
| The introduction provides a sufficient background on the topic and previews major points Central theme/purpose is immediately clear Structure is clear, logical, and easy to follow Subsequent sections develop/support the central theme Conclusion/recommendations follow logically from the body of the paper||2/2|
|Format–10% Citations/reference page follow guidelines Properly cites ideas/info from other sources Paper is laid out effectively–uses, heading and other reader-friendly tools Paper is neat/shows attention to detailGrammar/Punctuation/Spelling–10% Rules of grammar, usage, punctuation are followed Spelling is correct Readability/Style–10% Sentences are complete, clear, and concise Sentences are well-constructed with consistently strong, varied structure Transitions between sentences/paragraphs/sections help maintain the flow of thought Words used are precise and unambiguous The tone is appropriate to the audience, content, and assignment||1/1 1/1 1/1|
Comments / Grade
|10/10 – Very nice job. Keep working hard. Best, Dr. Pogue|