By Team A4

Fani Dimopoulou Thomas KandrikalSurya Saha Ji ShenIvaylo Stoykov Miia Zhang

Winning Strategies Part 1

ON TARGET Theory of BSC

Advantages &

Disadvantages of BSC

Steps to minimise

disadvantages

Strategy deployment for

WaveRider

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Financial PerspectiveTo achieve our goals, How Should we appear to our shareholders?

Strategic goals

Objectives Measures Targets Initiatives

Adapted from the Balanced Scorecard by Robert S. Kaplan and Dave P. Norton. Harvard Business School Press. 1996.

Customer PerspectiveTo achieve our vision, How should we appear to our customers?

Strategic goals

Objectives Measures Targets Initiatives

Learning & Growth PerspectiveTo achieve our vision, How will we sustain our ability to change and improve?

Strategic goals

Objectives Measures Targets Initiatives

Business Process PerspectiveTo satisfy our customers and stakeholders, What business Process must we excel at?

Strategic goals

Objectives Measures Targets InitiativesVision

The BSC approach gives a broad view of the factors that lead to business success (Kaplan and Norton, 1996).

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Not only the financial measurements are considered but also the operational ones.

By Team A4

ON TARGET

ADVANTAGES

DISADVANTAGES

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By Team A4

Balanced outlook

Improve alignment of actions

into strategic goals

Identify prioritiesProactive approachEmployee perspectiveCustomer perspective

ScalabilityExpensive process Time consuming

Subjective BSC can cause uncertaintyImbalance b/n financial & non

financial measuresThe BSC changes over timePossibly gamed by employees

Cost benefits not knownEmployee & supplier contribution not

entirely recognised

Focus on top down performance measurements

S.M.A.R.T. / C.A.M.E.L.S. / POLICY DEPLOYMENT

ON TARGET

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Choose non financial measures that look ahead alongside financial measures that looks behind

Manage gaming among employees by having threshold limits for measures

Combine dissimilar measures : formulaic and subjective measures need to be combined

Measures will change over time, so all measures need to be updated periodically

Test the business model statistically to validate the measure.

Trade off between generic and specific measures

Choose measures in context to a business model or to a firm’s strategy

Anticipate how the performance measurement system will change

ON TARGET

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Strategy Number 3 deployment /BSC approach

WaveRider

By Team A4

ON TARGET

7 By Team A4

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6/6 points have positive impact on the companyTotal estimated expenses: £425k

Increase in operating profit due to retail price increase European market is growing and WaveRider needs to penetrate abroad to gain market shareThis strategy proposes re-engineering of three departments

Decrease in distribution costs by changing the current distributor

Source: team’s discussion

ON TARGET

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To achieve excellence

before, during and after the purchase

of the world’s

best RIB boats

By Team A4

ON TARGET

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Financial PerspectiveTo achieve our goals, How Should we appear to our

shareholders?Strategic goals

Objectives Measures Targets InitiativesIncrease netprofit margin

Increase in £profit

Increase 10%in op. margin

Profit/unit(retail price)

Increase ROCE Increase in £profit

Increase 15%in ROCE Decrease stock

Adapted from the Balanced Scorecard by Robert S. Kaplan and Dave P. Norton. Harvard Business School Press. 1996.

Customer PerspectiveTo achieve our vision, How should we appear to our

customers?Strategic goals

Objectives Measures Targets InitiativesIncrease

popularity inEU

Increase sales Increase 5%in sales

Promotion &EU distributor

Increasecustomer

satisfaction

Increase inSales /

Decrease incomplaints /

CustomerFeedback

6 sigma Invest intechnology

Learning & Growth PerspectiveTo achieve our vision, How will we sustain our ability to change

and improve?Strategic goals

Objectives Measures Targets InitiativesMonitor

demand forboats

No of boatssold 1,500 boats

Adjustdiscounts as

needed

Business Process PerspectiveTo satisfy our customers and stakeholders, What business

Process must we excel at?Strategic goals

Objectives Measures Targets InitiativesIncrease

interdepartmental

performance

Decrease laborcosts

Decrease 10%in totalsalaries

Financesoftware

Improveefficiency ofsales team

Increase salesIncrease 10%in internal &

external sales

Re-engineeringsales

department

Increase market share in Europe

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By Team A4

Vision

To achieve excellence before,during and after the purchaseof the world's best RIB boats

ON TARGET

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Strategy № 3 proposes solutions to the majority of the problems risen by the board of

directors

It does not cover Production Director’s view of introducing new products (e.g. engines, clothes, e.tc.)

However,

It does not include measures for improving personnel’s performance as Human Resources Director pointed out that the company has the same employees since the beginning

By Team A4

It is a short term strategy

ON TARGET

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Bourne M. et al (2003) “Implementing performance measurement systems: a literature review”, International Journal of Business Performance Management, Vol. 5, No.1, pp. 42-57

Kaplan, R.S. and Norton, D.P. (1996) The Balanced Scorecard — Translating Strategy into Action. Harvard Business School Press, Boston, MA.

Ma, Y. & Xu, X. (2004) The advantages and Disadvantages of Balanced Scorecard and It’s Application, Journal of Shenyang Normal University Social Sciences Edition.

Mooraj S. et al (1999) "The Balanced Scorecard: a Necessary Good or an Unnecessary Evil?", European Management Journal Vol. 17, No. 5, pp. 481–491

ON TARGET

By Team A4

Thank you