Applying the Balanced Scoreboard tool to Case Studies

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Balanced scorecard is a tool of analysis that is used in measuring the performance of the work organization. It has the four different perspectives including the financial perspective, Customer perspective, internal perspective and the Innovation and learning perspective.

Problems that discourage firms to take up Balance Scorecard Approach;

If metrics is not defined properly in terms of visual indicators that can be comprehended many individuals will start criticizing it in order to avoid being liable to questions arising on their performance.

Much effort is to be put in identifying the suitable performance indicators so as to capture sufficient data and report more efficiently. Balance Scorecard needs to be reviewed more often in order to ensure it works in an excellent manner.

Organizations need to employ standard methodologies of time-testing process and improvement methodologies simultaneously with the problem solving methodologies in order to avoid misuse of resources by using a different approach of solving problems every time.

1It is internally orientated and not externally. Firms need to pay attention to external indicators thereafter internal forces should be evaluated followed by SWOT-analysis (Drucker, 2004).

Companies use Balance Scorecard Approach due to the following benefits:

More innovative ideas can be derived. Cooperation is promoted throughout the company since the members have good team spirit motivating each other towards success. Free flow of communication across the organization. Constant evaluation of plans against the standards of industry so as to determine any variations and correct them accordingly.

2Brings about distinctive competitive benefits in terms of minimum time limit, enhanced decisions, effective solutions and more. Practical results can be experienced as the strategies are more realistic (Barney,1991).

Reference

1Drucker, Peter, 2004, The Management Practice:Strategies Development, Harper and Row, New York City.

2Barney, J.1991 "Firm Resources and Sustainable Competitive Advantage", Journal of Management, vol 17, no 1, 1991.

Wikipedia Encyclopedia, 2011, Balanced Scorecard/Strategic Management, Accessed at 13/01/11, sited at; http://en.wikipedia.org/wiki/Strategic_management

2.0 FIAT: REBIRTH OF A CARMAKER

SWOT ANALYSIS

1Strength: Fiat's organizational structure was successfully broken down by Mr.Marchionne. He introduced a more flat structure within the company and offered a wide scope to some very young people regardless of their experience and age by replacing quite a lot of leaders who have been working with the company for a long period demonstrating an operating style that was not compatible with today's market changes or dynamics. Moreover, the company will have access to fresh ideas and latest skills (Mintzberg, 1998).

Weakness: Firmness of Italian factories and it is all because of the stubborn unions and insufficient investment causing a rise up to 4.4 billion pounds net debt of the organization alongside cash outflow was quiet high that could further cause a decline of 3 billion pounds of changeable bonds in fifteen months.

2Opportunity: The technological patent rights possessed by FIAT in terms of doing without camshafts and valve gear offered the company a chance to introduce her first engine 80bhp twin-cylinder turbo 900cc engine with emission level being 69g of C02 per kilometer. Moreover, this is more than the emission target set by European Union.

Additionally, it would not be costly for FIAT to manufacture an equal four-cylinder engine resulting FIAT to build its competitive edge (Nag,2007).

Threat: FIAT can run bankrupt as a consequence of facing loss of funds caused by ending the partnership that its shares with General Motors since five years eventually no economies of scale.

Reference

1Mintzberg, H. Ahlstrand, B. and Lampel, J.1998, Strategy Safari : A Guided Tour Through the Wilds of Strategic Management, The Free Press, New York

2Nag, R.; Hambrick, D. C.; Chen,(2007) M.-J,What is strategic management, really? Strategic Management Journal. Volume 28, Issue 9, pages 935-955.

Johnson G; Scholes K and Whittington R, 2009, Fundamentals of Strategy, 1st ed , Prentice hall.

Tutor2u (2011); Benefits of competitive markets; http://tutor2u.net/economics/content/topics/competition/competition_importance.htm accessed on 31/01/2011

3.0 THE PROFITABILITY OF UK RETAILERS

Comparing profitability is hard task due to several reasons;

Variations in the use of accounting approach for valuing goodwill and computing amortization of costs related to property.

1Many of UK associations are possessed by public unlike other privately owned groups eventually profit determination in both cases varies greatly (Drucker,2001).

Britain supermarkets reap more profits whether or not above variations are considered.

UK has an advantage as seen by estimating profitability by return on sales.

The UK profit margin on sales was more than that of continental and United States operators.

The six groups from Britain had an average operating margin over six percent whereas for six groups of France had an average operating margin of around two percent. Despite of accounting for the differences, UK statistics was around 4 to 5 percent whereas the figures of France were about 1 to 2 percent.

UK Retail Supermarket Industry Analysis

Low bargaining power of buyers; Britain employs oligopolistic influence to enforce high prices on consumers.

Low bargaining power of Suppliers; British organizations possess enough skills and experience to obtain the best of provisions from suppliers.

Minimum threat of new entrants; Not many companies will step into the industry since purchasing sites and established superstores is expensive or costly.

2Low threat from substitutes; UK comprises of strong and huge purchasing groups despite increasing prices (Johnson, 2009).

Current rivalry; not many companies compete in oligopoly industry comprising of supermarket.

Reference

1Drucker, Peter, 2004, The Management Practice:Strategies Development, Harper and Row, New York City.

Barney, J. (1991) "Firm Resources and Sustainable Competitive Advantage", Journal of Management, vol 17, no 1, 1991.

Johnson G; Scholes K and Whittington R, 2009, Fundamentals of Strategy, 1st ed,Prentice hall.

2Johnson G; Scholes K and Whittington R, 2009, Fundamentals of Strategy, Prentice hall. First Edition, 978-0-273-71310-4

tutor2u (2011); Benefits of competitive markets; http://tutor2u.net/economics/content/topics/competition/competition_importance.htm accessed on 31/02/2011

4.0 Novotel Value Chain

Novotel enjoys several competitive benefits over the rival companies due to the ability of adapting to the dynamic environment. Moreover, they realize that customer focus if of great importance eventually every attempt is made to increase customer satisfaction thus, enjoying a greater market value.

Furthermore, Novotel also offers exceptional customer service ultimately attracting many customers.

1The value chain is among the significant division of the company that will cause it to be successful in market. Moreover, it is the means through which the coordination between various departments of the company can be comprehended and could build the competitive edge for the organization (Moore, 2009).

The major aim of Novotel is to lead in the hospitality industry through employing the best ways of greeting guests, entertaining them and so on. This is because customers will capture the image of Novotel as soon as they step in and if the first impression goes wrong eventually customers will be reluctant to the other services too.

Moreover, Novotel carries out job rotation whereby the employees are rotated or shifted from one nation to another in order to motivate the employees as well as to ensure uniform service is provided throughout the hotel chain in situated in different nations.

2In addition to that, Novotel also keeps good relations with its suppliers in order to ensure smooth flow of inputs and superior quality of the inputs so as to build a good image in minds of customers and to improve profit level (tutor2u, 2011).

VRIO framework is all about value, rarity, failure to imitate and organization. The Novotel VRIO framework aims at offering 24-hour service to customers, provide additional skills to their staff in terms of good etiquettes, proper room service and related factors. Novotel also offers advantages in terms of democracy to other hotel chains I different nations with the aim of achieving a greater share in the market.

Reference

1Moore, M H. 1995, Strategic Management in Companies: Harvard University Press.

Wikipedia Encyclopedia, 2011, Strategic Decisions/Strategic Management, Accessed at 13/01/11, sited at; http://en.wikipedia.org/wiki/Strategic_management

2tutor2u (2011); Benefits of competitive markets; http://tutor2u.net/economics/content/topics/competition/competition_importance.htm accessed on 27/02/2011

5.0 THE VIRGIN GROUP

Virgin Group wanted to be acknowledged independently through its own name in whatsoever industry it enters as well as in several nations the company had a desire of being acknowledged by its own and name through franchising.

Virgin group forsake it's the profits that could be enjoyed in short-term with the aim of gaining advantage in terms of growth in long term and improved value of capital.

All businesses of Virgin group were operating as a separate entity however, the share value and degree of the proprietors kept the businesses connected.

1The Virgin Group core objective was to create a good brand name worldwide and to ensure their high quality products are sold at affordable price in the market. Furthermore, the Virgin Group as a parent company implements uniform strategies throughout its various businesses maximizing its business value (Jaquier, 2010).

2The drawbacks of Virgin Group include that some of their products that were being used uniformly in most of their business were not of superior quality and taste. Moreover, this posed a great threat because the fact that low quality products will have a negative impact on the brand name of the company (Barney,1991).

Therefore, in order to overcome this obstacle the company had a choice of either improving the quality of its products or to simply discontinue the use of the low quality products by closing down the production factories and investing in other businesses that have an excellent brand name and goodwill.

Reference

Drucker, Peter, 2004, The Management Practice:Strategies Development, Harper and Row, New York City.

2Barney, J. (1991) "Firm Resources and Sustainable Competitive Advantage", Journal of Management, vol 17, no 1, 1991.

NetMBA (2010); The Value Chain; http://www.netmba.com/strategy/value-chain/ accessed on 31/12/2010

1Jaquier, B. (2010); THE RESOURCE-BASED VIEW OF THE FIRM (RBV) ;

http://www.ecofine.com/strategy/RBV%20of%20the%20firm.htm, accessed on 3/03/2011

6.0 Extending the "Easy" Business model

1Underneath are some characteristics of "Easy" business model.

To step in the market as a dominant organization along with many other companies of the same name and offering the market with a variety of goods and services. Easy group runs an airline organization and now look forward to extend its business model by establishing cinema. The Easy group wants to expand into the cinema market using the similar strategies used in airline business such as affordable price, booking in advance and likewise. The company will observe if it can succeed in the market using the same set of strategies or some amendments are to be made (NetMBA, 2011).

2According to the Ansoff Matrix, the Easy group business model can be attributed to the characteristic of operating in the same market with new products. That is to say, Easy group is looking forward to commence new business in the same market by expanding its product line so as to be the market leader and it is for this reason Easy group did not choose to serve another market with its new business idea (Jaquier, 2011).

Conglomerate is an association of two or more companies engaged in completely different business.

3The recommendation that can be put forward for Easy Group is to move into the cinema market and compete effectively with other companies in the same market offering similar products or services. The fact that Easy group has a treasure of innovative ideas (like online booking of seats, ticket at reasonable price, allowing customers to bring their own food or beverages, and so on) will draw attention of many customers towards the company (tutor2u, 2011).

Reference

1NetMBA (2011); The Value Chain; http://www.netmba.com/strategy/value-chain/ accessed on 21/2/2011

2Jaquier, B. (2011); THE RESOURCE-BASED VIEW OF THE FIRM (RBV);

http://www.ecofine.com/strategy/RBV%20of%20the%20firm.htm accessed on 21/2/2011.

3tutor2u (2011); Benefits of competitive markets; http://tutor2u.net/economics/content/topics/competition/competition_importance.htm accessed on 27/02/2011

7.0 RESTRUCTURING SONY

Sony managed to undergo restructuring nine times for the reasons highlighted below.

To concentrate on businesses with high rate of growth.

To discourage company from relying on one leader.

Make optimum use of the opportunities present for Sony.

To improve focus of the organization on products with high potential.

Accelerating process of decision making in order to enable the organization to respond quickly towards changing market conditions.

Improving the shareholder value via "Value Creation Management".

1Attempts of Sony restructuring that led to centralization: Every Sony's eight-company structure was having its own division of Research and Development such that when the organization underwent ten-company structure in January, 1996 eventually Research and Development structure was restored and three new laboratories were formed (Moore, 1995).

2Attempts of Sony restructuring that led to decentralization: Ten divisional companies were structured in April 1999 to three network companies.

Consumer electronics: This was a business in maturity stage whereby there was stiff competition and this business was lacking innovativeness and creativity in its products.

Entertainment: This business was also experiencing high competition from domestic and foreign players. The Sony entertainment business was facing severe threats from US-bases software giants.

Insurance: This business was earning largely. Moreover, Life Planner consultancy system was introduced by Sony Life Insurance offering customized financial online service to the clients and insurance policies were being sold over the internet (Wikipedia, 2011).

The task structure of Sony is the dominant organizational structure. Sony businesses are set up in divisions and for this reason Sony is having a divisional company structure. Moreover, these divisions are further structured in to product groups.

Reference

1Moore, M H. 1995, Strategic Management in Companies: Harvard University Press.

2Wikipedia Encyclopedia, 2011, Strategic Decisions/Strategic Management, Accessed at 13/01/11, sited at; http://en.wikipedia.org/wiki/Strategic_management

NetMBA (2011); The Value Chain; http://www.netmba.com/strategy/value-chain/ accessed on 31/12/2010.

8.0 SAMSUNG ELECTRONICS

1Samsung has undergone a significant change of reconstruction and has become very innovative building advanced technology across a wide range of product lines.

Roles that Jong-Yong Yun has played in the change process are listed below (NetMBA, 2011).

Emphasized on developing own products instead of replicating from other companies.

Urged the firm for reorientation so as to build on new capabilities.

Marketing expert was hired for creating a more enhanced image of the firm and its products.

Heavy investments in major form of technology.

Established a post for chief design officer to ensure designers can put forward their ideas to the managers at the top level of hierarchy.

About 30,000 workers were made redundant.

Several Samsung production units closed for a period of two months in order to free large inventory.

About two hundred billion dollars inventories like pagers, coffee makers were sold and were viewed to be of secondary significance for firm's future.

Some of the methods employed for promoting innovation and diffusion throughout organization are listed underneath.

New Venture Group - Yun and an association of nine senior heads came up to discover a way out.

Product Champions - A chief design officer was recruited so that designers can put forward their ideas to top managers.

Samsung invested in Research and Development more than any of its competitors.

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