Squeaky Brakes focused mainly on financial perspective of our business, ignoring operational aspects. However, Kaplan and Norton suggest that there are four perspectives, which must be considered.
* How do customers see us? (customer perspective)
* What must we excel at? (internal perspective)
* Can we continue to improve and create value? (innovation and learning perspective) * How do we look to shareholders? (financial perspective)
To boost the customer’s perspective in future:
* Market summary reports, show customer satisfaction, in terms of delivery time and loss of sales. Squeaky Brakes had a 0.9 rating at some points for delivery, resulting in 10% loss sales. In future, we should ensure we produce enough bikes for a 1.0 rating. * Should refer to perceptual map and hit segment centres so we satisfy consumer demand. This is possible through development of specs. * Market research should be used to satisfy consumer needs. Ie: high quality for road bikes, low price for youth bikes and mountain bikes are in the middle and need balance of both. * We should continue advertising and branding at high levels to drive consumer demand. Ie: advertise on TV for youth bikes and spend on PR magazines for road bikes.
The internal perspective must also be considered, focusing on internal operations of the company. * Minimize wastage or increase production depending on bike demand. Squeaky Brakes needs to increase production as we had consistently loss sales. Ie: Increase SCU (Standard capacity unit) or efficiency. * Achieve economies of scale by developing costs of bikes and efficiency * Keep inventory to a minimal as it adds extra costs to maintain it. Eg: Security and space of stock
The innovative and learning perspective is about innovation, improving and learning. We must continuously create value for consumers. * First mover advantage – try enter untapped markets before competitors so we can develop these bikes and create value. Eg: Create value for the youth bike segment by developing costs. As quality is not a deciding they perceive value as the lowest price. Eg: Create value for road bike segment by developing specs and quality as price is not a deciding factor. * Consider the product life cycle, when adjusting price, promotion and development. If they have not hit the segment centres of the perceptual map, we should improve until it does.
The financial perspective is concerned with our SHV.
* In week one we were last in Mikes Bikes as we overspent on advertising/ PR. In future we need to ensure we check forecast results and available cash before making decisions, or get a loan. * Continue increasing dividends and repurchasing shares as we did to increase SHV. * Although we got out loans in Mikes Bikes, in future we can consider selling shares to increase capital. * We can also look at how competitors are doing financially in the industry report and how it affects their SHV. Favourable movements can be mimicked and improved.
Week 3 – The Balanced Scorecard – Kaplan and Norton
Financial, ignoring operational
* Customers? (customer)
* Excel? (internal)
* Improve and create value? (innovation and learning)
* Shareholders? (financial)
* Market summary = customer satisfaction, delivery time and loss of sales. 0.9 rating = 10% loss sales.
Future = 1.0 rating.
* Perceptual map
* Market research, satisfy consumer needs. Ie: road, youth * Advertising/ branding, drive consumer demand. Ie: road, youth
Internal perspective excel within
* Minimize wastage or increase production depending demand. Loss sales, oncrease production
Ie: SCU (Standard capacity unit), efficiency.
* Economies of scale
Innovative and learning perspectives, requires continuous value * First mover advantage, enter untapped,...