Evaluation Of Balanced Scorecard In 'The Business' Promotes Goal Congruence. (70 Characters)

Write the Evaluation of the effectiveness of your balanced scorecard in promoting the goal congruence.

This report includes brief evaluation on case assessment of “The business,” which is assumed as strategic management system that is specialised in the retailing home improvement and outdoor living products. In the report with the development of different strategic tools and techniques, the market performance, and estimate, increase in performance are evaluated and analysed. The major objective of the report is to develop some management and marketing tools such as strategic mapping, swot analysis, mission vision and mission assessment and scorecard analysis of the entity. The Business is stated to be one of the known and growing home furnishing retail companies in Australia that has recently acquired by grocery and liquor retail chain (Ferreira, 2017).

The acquirer business at the time of acquisition has been trading in ASX or Australian stoic exchange with sales figure of AUD 1 billion per year. However, it has observed that operational expenditure of the company has been in it, the manager John Clarkson has engaged different activities to increase its operational level and operational income. In the company “The Business” the five-year objectives include AUD 5 billion of sales every year, it is focused to increase its sales figure to enhance its brand expansion and positioning in the market. 

On the other side, the 15% on return on sales through developing the operational income of company coming financial years. In the third objective, management of company is to enhance 15% of market share within 5 year of business. It has observed that there are key strategies that have developed by company to evaluate its marketing strategy of meeting its needs and objectives in the coming 5 years. The strategic mapping and scorecard analyse has to evaluated for the business opportunity and pace of growth for the company.  

It is evident that the Business’ current strengths are: Multi state operations, increased sales revenue, operate as a single company to its parent grocery chain and internal investment. Multi- state operations is a huge achievement for any business or organisation, with hardware stores consuming majority of Australian locations. For a company to take up nearly 77.2% of industry enterprises with 23 stores mainly in Victoria, New South Wales and Queensland is a big revenue factor. The important part about multi state operations leaves avenues for continued growth for the organisation. Another strength for ‘The Business’ has generated 1 billion in revenue which implies sales are occurring with an abundance of room for a substantial growth. ‘The business’ was acquired by a grocery and liquor retail chain, the parent company willing to make a financial investment and commitment of $1 billion dollars to improve existing stores, with intention to open five in the next two years. The business acts as a single company to its parent retail grocery chain company which is similar to Bunnings and its parent company Wesfarmers. ‘The business’ new structure invites significant benefits for the organisation internal and external but opens the door for multiple opportunities. 

Vision, Mission, and Overall Strategy

As for The Business’ current internal weaknesses are: location/ on-site car parking, poor range of products and store layout, customer service, management/ operating income nil. Store location/ on-site car parking are a big factor into the whole experience for customers and stakeholders. Allowing for customers to have a smooth process starts from the car park, making sure there is suffice amount of car parking spaces and where it doesn’t impact on other stores parking in your area. Take Bunnings for instance they’re apart of Wesfarmers chain but they also run a single company and base their location and choice of stores to be in more industrial areas, on their own generally not amongst shopping malls. Customer experience is a big focus in The Business’ weaknesses as poor product range and store layout can deter customers away which then affect revenue. Inside the shop they have been renowned for being too dark and not enough appropriate signage which impacts on customer experience, therefore customers are more inclined to not return, or speak poorly of their experience. Customer service was minimal and staff not being fully trained meant reduction in up sales, customer satisfaction poor, repeat customers, unsatisfactory reviews. Customer service falls to management which maybe saving costs in wages, but it heavily impacts on revenue which all resorts back to no profit. If management reduce wages would mean management would need to be floor focused, which they are not. 

‘The business’ opportunities are: increased residential and commercial construction within the area, location, online platform, loyal customers commercial and home. Loyal customers, allows for free marketing through word of mouth and online positive reviews. The amount of residential and commercial construction multiplying all over Australia justifies the amount of external opportunity for not only the industry but “The Business” also. Supporting its local business and communities through being able to provide residential and commercial businesses with their hardware needs. With external opportunities increasing every chance for the business to start making a profit comes with the growth to grow not only in physical stores but through the online portal. For instance being able to provide online ordering for small businesses who can use online portal to better their service also being able to show what products are visible available and also customers being able to see online without have to call or physically go to store. The opportunities that have arisen all connect with each other, loyal customer are creating from online platform which improves location and the ability to provide hardware solutions for the increase in residential and commercial construction within the stores areas.  

‘The business’ threats are: competitive market, share market becoming more appealing than people investing in houses etc., poor customer reviews, and location.

A major threat is the competitive market they are in and having to compete with some of the top industries like Bunnings, Mitre 10 and Home Timber & Hardware. Along with those major chains the market is still heavily competitive with smaller, privately owned business to also compete with. Another factor is along with a competitive market, the share market is ever increasing which is turning people away from investing in a house. People tend to want to get rich faster and at the moment house prices are forever increasing reducing the opportunity to be able to purchase or build a house. This then rolls over into another external issue customer reviews and location which work hand in hand. Bad customer reviews deters people away and opens the doors for other avenues like investing in shares and going to competitors. The location of hardware stores impacts how external stakeholders deciding on purchasing there, difficulty finding store, locating a park, competing for a park due to being next to a major shopping centre. All these threats coincide with the internal weaknesses mentioned above as customers experience can lead to external threats for the organisation.  

Vision statement: Our goal is to  provide a great range of products, exceptional customer service and competitive prices to give your home improvement an experience you’ll never forget. 

Mission statement: The business are owned by a grocery chain, but operates as a single company, creating its own amongst the community and in all states all over Australia. Our team work diligently and endeavour to maintain the businesses core goals and values. They are dedicated to give you that peace of mind feel when it comes to your home improvement solution. 

Strategy: The business strive to have a competitive advantage by simply providing excellent customer service and maintaining consistency in all stores all over Australia. Our team's guiding principles are reputation, teamwork, acknowledgement and respect, which are the foundations to building a family environment. An advantage we offer is you cannot find it in store, we seek to find a product similar in-store or online. We pride ourselves on ensuring our customers are receiving the best possible service by providing staff with frequent training. We ensure our staff are recognised and rewarded for hard work, whilst creating an environment everybody desires to be apart of. The desire to ensure internal and external stakeholders needs are meet that fit in with the core goals and values of the business. Improving our environmental resources by transition from plastic to paper, the simple innovations that justify the capability of change, which benefits society and the environment. 

Briefly define the objectives included in the strategy map and explain why these particular objectives are important for ‘The Business’. 

According to the financial perspective of strategic mapping of the company, it has observed that for expansion in the market; it is necessary to make the development of its product positioning, sale and purchases of the firm in the market (Moullin, 2017). It has been observed that company is focused on increasing its sales volume of the firm, as per observation the company is planning to increase its sales figures by A$ 5 billion at the end or within the time span of 5 financial years. The company thus might have plans to introduce more stores than 23 existing stores in different areas of Australia. On the other side, the company is focused on the developing its stores by the investment of A$ 1 billion. On the other hand, the objective of the financial perspective is also to increase the market share of business by 11% in the recent 5 years of planning. It was observed that increasing market share is engaged through expansion of business, product performance, and customer base in the market (Akkermans and Van Oorschot, 2018). It has been observed that the development of the market share increases in the investment and fund options for the business. Thus, the business can able to generate more funds from the market to increase its market positioning contently.  

In the strategic planning, another objective that is introduced by The Business is the development of quality of services and increasing after sales services. In Australian, retail industry, the home improvement, and outdoor living products have more alternatives in the market. There are several higher and lower brands available in the industry selling the same range and segment of products. Therefore, it has been observed that an increasing number of products and affects sales services help the business to retain its customers in the market. In customer perspective, one of the major objectives of the business is to customer retention and increasing quality of satisfaction of customers in the marketplace (Moullin, 2017). On the other hand, the company has been planning to introduce more 5-6 stores in the coming years, which describes the company is planning to reach every corner of the city to connect with the customers. The management of firm believes in the fact that increases in relationship increase repurchase and recommendation of customers towards the brand or the company. In the retail industry, different offers and benefits are one of the working tools that are used by business entities to attract customers. Thus, the business has planned to engage highly competitive prices offered and coupon systems to increase sales and customer retention (Nurcahyo, Pustiwari and Gabriel, 2018). 

The internal business process includes internal operational, functional administrative and business activities that are also focused to be improved in the near future for the overall development of the business. In relation to increasing performance in the market, it is necessary for business entities to increase the restructure and reinvent the internal working culture aspects and working procedure. In seek of entering the global market, most of the companies have made changes in workplace structure, culture and working procedures, which are internal business activities. In the case of the Business, it has observed that proper and quality training and development problem has been planned to introduce in norganisation. It certainly helps to introduce more skills and interactive power for employees that can be used to impress on the store and off store customers. The business has planned to make an investment on about A$ 1 billion to improve its existing store's structure and operational functioning. This can improve the customer attention more deliverable (Ferreira, 2017). It is focused on creating a family form environment, which includes respect, acknowledgement, team leading, team working, and respect. On the other hand, the company has not been able to earn an operating profit; the company has also focused on increase the operational attributes of the business. It has stated that the development of the business organisation. In objective preparation, internal business perspective also includes to include more skilled and better labour forest to increase the internal operational performance of the organisation (Risinger, 2018.  

The learning and growth objectives that are planned and developed by business include expansion of the biases in the market by entering into the different market range. It is in plans that the company is focused on hard-hearted and building supplies industry, which can help to increase its business products and segments. The Business can perform the expansion by making acquisition and merger with small firms having the same level and range of products. It will not only help to increase its product and production line, but also assist the company in improving in the particular industry successfully (Anjomshoae et al. 2017). On the other hand, the objective that has been planned by the business for future development is to increase technological advancement in the company operational, administrative, functional, and financial activities to be evaluated.    

Table 1: Strategy mapping 

According to the balanced scorecard, it has assessed that the company has been focusing on increasing the range of product segments to enhance sales volume of the company (Farokhi, Roghanian and Samimi, 2018). It has been observed that increasing the product range and product segments will provide more options for consumers for making a purchase of all home products under one roof. It will certainly help to improve the customer base and increase the sales volume of the company. On the other hand, it has expected that it might increase the customer base and sales by 22%. The balanced scorecard includes another objective that is redesigning and restructuring of stores layout. In case, the stores of the business have been in poor condition that has limited visits from customers in a particular month. Therefore, the reinvestment and reinvention of stores layout will help the company to present an attractive structure to increase customer attention. It has observed that the layout changes can increase customer visits to stores by 1015%. Thus, increasing visitors and customers certainly help to develop its sales and revenue growth in the market. In case, it has also stated about the poor quality of services are engaged, that has decline customer retention as per the assessment, in the scorecard the development of customer service quality has also been mentioned (Cooper, Ezzamel and Qu, 2017). It has observed that most of the sales are affected due to lack of checking the satisfaction level of customers. Therefore, increasing the quality of customers and development of employees training can help the company to increase its market positioning and market share in terms of revenue. The increasing relationship can also help the firm to develop its customer base to 33% in the market. In case of increasing training and development of employees, business is focused on increasing its workplace environment more cooperative, coordinating, and collaborating. It has targeted to enhance a family environment in the business arena so that every individual think about the profit of the company (Akkermans and Van Oorschot, 2018). 

Evaluation of the effectiveness of your balanced scorecard in achieving the over strategy - Tony

The balanced scorecard reflects the different strategies that can be obtained by the company to achieve the prospected goal. These strategies are the effective planning of the company for the sustainable development in the different fields.

The first strategy, which aligns to the objective of increasing the range of the products, has a clear intention of attainting a quantitative development for the company (Altenburg, Kulke, Hampel-Milagrosa, Peterskovsky and Reeg 2016). Increasing the profits is the primary target of this objective. However, the effective strategy that has been developed by the company is a unique one, whichis measured to be one of the most effective strategies to increase the market shares. The strategy plans to launch 50 new products in the different segments. This can increase the customer base of the company and can increase the performance of the company in the market.

The second strategy discusses about the restructuring of the resources. This is an essential and effective strategy as it has a broader outlook to improve the company’s performance in the market with regards to its competitors. The modern customers are more attracted towards the well-decorated and well-equipped stores (Varley 2014). Developing of the stores and its structures can help in the effective launch of the new products that have been discussed in the first strategy. This activity can draw in more customers and increase the effective performance of the company because the promotion of the new products in new stores can satisfy the customers with new experience. Hence, this strategy can help to retain a larger number of customers in the end.

The third strategy discusses of enhancing the customer service of the company. Customer service can be an effective tool of enhancing the business quality. The customers always prefer services or products, which provides the customers with an effective pre-sales and after-sales service (Lamberton and Diehl 2013). The company plans to develop a 360-degree customer service planning which can effectively look after the variety of customer needs that they can face while purchasing the products. Moreover, the feedbacks from the customers can help in the development of the company. The measurable factor of the strategy is that the company plans to project an increased customer retention by 45%. This can be an effective development for the company as it can increase the revenues and garner larger profits.

The fourth strategy that the company plans to implement is to invest in the preparation of an online sales platform. The modern day young customers are more attracted to the online shopping platforms (Faloye 2014). They prefer online shopping to physical shopping. If the company invests in the development of the online portal, it will attract new customers, which will add to the customer base of the company. Moreover, this can also increase the sales of the products and also pave the way for the increase in the diverse markets. Online portal will also help the company to reach out to a larger number of customers at a same time and can increase the revenue of the company and their overall performance.

The fifth strategy of the company includes training and development of the employees. The primary objective is to increase the efficiency of the employees so that they can provide better customer service to the new and existing customers. As the main motive of the company is to renovate itself and confirm its position at the top of the market, besides different strategic development and marketing changes, it is important for the company to readily develop the employees of the company (Oluikpe 2012). Good and efficient employees are the key to a company’s success and organizing proper training and development can increase their performance and indirectly help the company to grow and develop. 

Evaluation of the effectiveness of your balanced scorecard in promoting the goal congruence  

The primary objective of any company while developing a balanced scorecard is to fix and determine specific goals. The company should aim to develop upon these goals. It is important to evaluate the scorecard and its objectives so that the proper importance of the goals set by the company can be determined. It is also essential to understand how these goals can determine the future development of the company.

The first objective highlights that the company has the motive of increasing the range of the products. In order to achieve this goal, it essential to understand, how the increase in the range of products can determine the growth of the company (Longoni, Golini and Cagliano 2014). The projected increase has been set at 50 which is an ambitious target. It will require a large investment and planning. However, keeping in mind the renovation of the company, such ambitious steps are required to make a mark in the modern marketplace. The investment and expansion can increase the market share of the company by 22% and can help them achieve a good position in the marketplace.

The second objective highlights the company’s strategy to restructure the stores. This strategy is similar to the idea of the first objective. With the increase in the range of products, it is also essential for the company to restructure its stores for the proper display of the products and attracting customers (Hawkins 2012). The effectiveness of this strategy is high as the projected amount for this strategy is $1 billion. With such a large amount of investment, massive renovation can be done in the stores according to the taste of the modern customers. This can effectively draw more customers and increase the customer visits by 10 to 15% which is a good amount of progress for a company. Moreover, the goal of overall development can also be achieved by this strategy which will increase the revenue generation in the future.

The third objective is to increase quality customer service. Considering the goal of the company to develop itself and increase the revenues, it is essential for the company to retain its customers for a longer period of time. Hence, building a quality customer service can help in the improving customer experience in every spheres of their interaction with the employees (Tang, Liu, Oh and Weitz 2014). Better feedback is also essential for the growth of the company. Quality customer service can help the company increase the retention of customers by almost 45%, which is essential for increasing the revenues of the company and also ensuring that the revenues keep on flowing in the future.

The fourth objective directly focuses on the increasing the profits of the company. In the modern market scenario, it is very difficult for a company to survive only on the physical stores. The modern generation is more prone to shopping online and hence, it is essential for a company to develop its online platform (Caire and Schreiner 2012). The strategy of developing the online platform can help the company to reach out to a larger number of customers at a short period of time. The sustainability of this strategy is that it can create market expansion even without building physical stores. Moreover, as seen from the example of Amazon, online platforms can create large revenues and can the company to develop in future.

The fifth objective is also essential for the quality development of the company and indirectly improves the profits of the company in the long run. Quality training and development for the employees is essential for their overall development (Tan and Newman 2013). This can help the customers to have a rich experience from dealing with the company. This strategy can thus help to retain the customers which is effective for he generation of revenues 

References: 

Akkermans, H.A. and Van Oorschot, K.E., 2018. Relevance assumed: a case study of balanced scorecard development using system dynamics. In System Dynamics (pp. 107-132). Palgrave Macmillan, London.

Altenburg, T., Kulke, E., Hampel-Milagrosa, A., Peterskovsky, L. and Reeg, C., 2016.Making retail modernisation in developing countries inclusive.German Development Institute Discussion Paper, 2, p.2016.

Anjomshoae, A., Hassan, A., Kunz, N., Wong, K.Y. and de Leeuw, S., 2017. Toward a dynamic balanced scorecard model for humanitarian relief organizations’ performance management. Journal of Humanitarian Logistics and Supply Chain Management, 7(2), pp.194-218.

Caire, D. and Schreiner, M., 2012.Cross-Tab Weighting for Retail and Small-Business Scorecards in Developing Markets.ac. uk/waf/schoolbiz/get_file. php.

Cooper, D.J., Ezzamel, M. and Qu, S.Q., 2017. Popularizing a management accounting idea: The case of the balanced scorecard. Contemporary Accounting Research, 34(2), pp.991-1025.

Faloye, D.O., 2014. The adoption of e-commerce in small businesses: An empirical evidence from retail sector in Nigeria. Journal of Business and Retail Management Research, 8(2).

Farokhi, S., Roghanian, E. and Samimi, Y., 2018. Investigating causal linkages and strategic mapping in the balanced scorecard: A case study approach in the banking industry sector. Journal of Industrial Engineering and Management Studies, 5(1), pp.1-25.

Ferreira, A.M.S.C., 2017. How managers use the balanced scorecard to support strategy implementation and formulation processes. Tékhne-Review of Applied Management Studies, (1), pp.2-15.

Hawkins, P., 2012. Creating a coaching culture: Developing a coaching strategy for your organization.McGraw-Hill Education (UK).

Lamberton, C.P. and Diehl, K., 2013. Retail choice architecture: The effects of benefit-and attribute-based assortment organization on consumer perceptions and choice. Journal of Consumer Research, 40(3), pp.393-411.

Longoni, A., Golini, R. and Cagliano, R., 2014. The role of New Forms of Work Organization in developing sustainability strategies in operations.International Journal of Production Economics, 147, pp.147-160.

Moullin, M., 2017. Improving and evaluating performance with the Public Sector Scorecard. International Journal of Productivity and Performance Management, 66(4), pp.442-458.

Nurcahyo, R., Pustiwari, S. and Gabriel, D.S., 2018. Developing A Strategy Map Based on Sustainability Balanced Scorecard Framework for Manufacturing Industry in Indonesia. International Journal of Engineering & Technology, 7(2.34), pp.48-51.

Oluikpe, P., 2012. Developing a corporate knowledge management strategy.Journal of Knowledge Management, 16(6), pp.862-878.

Risinger, J.A., 2018. Toward a Model of Strategic Human Capital Management Using the Balanced Scorecard-An Exploratory Case Study.

Tan, K. and Newman, E., 2013. The evaluation of sales force training in retail organizations: a test of Kirkpatrick's four-level model. International Journal of Management, 30(2), p.692.

Tang, C., Liu, Y., Oh, H. and Weitz, B., 2014. Socialization tactics of new retail employees: A pathway to organizational commitment. Journal of Retailing, 90(1), pp.62-73.

Varley, R., 2014. Retail product management: buying and merchandising. Routledge.