10 Years Business Plan for Winery

Topics: Balanced scorecard, Strategic management, Strategy map Pages: 8 (2235 words) Published: October 26, 2009
Strategy map
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A strategy map is a visual representation of the strategy of an organization. It illustrates how the organization plans to achieve its mission and vision by means of a linked chain of continuous improvements. For a commercial business, the strategy map illustrates the long-term game plan or competitive strategy to achieve increased profitability. For a nonprofit or governmental organization, it illustrates the plan by which the organization intends to improve performance of its mission. In either case it illustrates the cause-and-effect relationships between different strategic objectives and their measures, or key performance indicators (KPIs) that are included in a balanced scorecard. The concept of strategy maps was introduced to the business world in 2001 by Robert S. Kaplan and David P. Norton as a means to illustrate and elaborate their earlier concept, the balanced scorecard. The standard reference for the strategy map is their book The Strategy-focused Organization.[1]. A further standard reference is their third book Strategy Maps, which provides numerous examples of the use of strategy maps in various organizations. Kaplan and Norton introduced the balanced scorecard performance management concept in a paper, "The Balanced Scorecard: Measures that Drive Performance" in the January 1992 edition of Harvard Business Review[2]. The focus of the balanced scorecard is to provide organizations with a "balanced" range of metrics against which to measure their performance. "Balance" implied that organizations can gain a broader view of leading indicators of performance by including non-financial metrics (e.g. learning and growth of employees, efficiency of internal business processes, and customer satisfaction). Based on continued experience with organizations that successfully implemented the balanced scorecard, Kaplan and Norton came to realize that there were two important factors that made organizations implement the balanced scorecard successfully -- the factors of focus and alignment. Organizations, while developing an appropriate scorecard to evaluate their business performance, were forced to rethink their strategic priorities and describe their strategies. This led Kaplan and Norton to a further principle -- you cannot measure what you cannot describe. Strategy maps, which had earlier been a part of the process of constructing the balanced scorecard, now became the central theme. In this way the balanced scorecard evolved from a performance management tool to a comprehensive strategic management tool. Strategy maps are a way of providing a macro view of an organization's strategy, and provide it with a language in which they can describe their strategy, prior to constructing metrics to evaluate performance against their strategies. Strategy maps were discussed briefly in Kaplan and Norton's book on the Balanced Scorecard. A more comprehensive treatment is offered in their 2004 book -- Strategy Maps. [edit] Perspectives

The "balance" in the balanced scorecard refers to the recognition that to achieve a comprehensive view of an organization's performance, it needs to be seen from different viewpoints, or perspectives. In the past, organizations only tended to look at financial measures, which are lagging indicators. Leading indicators come from three other perspectives, so that there are four perspectives in all: Financial perspective: In private-sector organizations, this perspective contains the financial results such as profit, return on capital, cash flow, and margins. In non profit organizations, it describes income from sponsors or taxpayers, cash flow and cost control results. Customer perspective: The customer is concerned with: {text:list-item} {text:list-item} {text:list-item} {text:list-item} Internal (business) process perspective: Involves:...

References: [edit] External links
A Balancing Act, by The Balanced Scorecard Institute[1]
Strategic decision making and national differences [2]
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