Contain Ltd produces aluminium transport containers for the airline industry, and faces intense competition from three competitors whose containers provide identical product attributes. As of 1 January 2012, the company’s strategic objective is to increase shareholder value by increasing market share and reducing production costs. It is thought that new customers can be attracted by producing low-price, high-quality containers that are delivered within 10 days of receiving a customer’s order. In order to achieve its new objective, the company must seek to increase customer satisfaction, product quality, productivity and employee training and retention.

During 2011 the following events occurred:

■ 20% of employees underwent training in total quality management techniques.

■ 15% of employees resigned and left the company’s employment during the year.

■ It took an average of 12 days to process and fulfil customer orders.

■ The yield on the usage of aluminium was 85% and 800 containers were produced per employee.

■ 10% of containers were returned by consumers due to defective hinges.

■ A survey revealed that 18% of customers were dissatisfied with the company’s products during 2011.

■ No new customers were recruited during 2011. The company’s market share of the ‘low-price’ container market fell 1% to 9%. Its share of the total container market fell 5% to 6%.

■ Annual turnover fell 2% to £8,000,000. Total operating income for the year also fell 2% to £600,000.

■ The company has targeted productivity and process improvements equal to £150,000 of operating profit by 2015. Furthermore, it plans to obtain cost reductions equal to £50,000 per year from increasing its yield on the factory’s usage of aluminium.

■ The company has also established a'5-year financial target to achieve a total of £300,000 of additional operating income from growth.

Required

(a) Identify the type of strategy that Contain Ltd plans to implement during 2012.

(b) Using your answer from

(a) and the question data, identify, for each of the four perspectives within Contain Ltd’s balanced scorecard for 2012, two performance measures that are consistent with, and follow from, the company’s strategy.

(c) Briefly explain the cause-and-effect relationship between your eight performance measures identified in part (b).

(d) Acting as the accountant for Contain Ltd, discuss the benefits and problems in implementing and using a balanced scorecard performance measurement system.