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.