=+15-35 KK Balanced scorecard (R. Kaplan, adapted) OBJECTIVE 3 Caltex refines petroleum and sells it through its own Caltex petrol stations. On the basis of market research, Caltex determines that 60% of the overall petroleum market consists of ‘service-oriented customers’, medium- to high-income individuals who are willing to pay a higher price for petrol if the petrol stations can provide excellent customer service, such as a clean facility, a convenience store, friendly employees, a quick turnaround, the ability to pay by credit card and high-octane premium petrol. The remaining 40% of the overall market are ‘price shoppers’ who look to buy the cheapest petrol available. Caltex’s strategy is to focus on the 60% of serviceoriented customers. Caltex’s balanced scorecard for 2015 follows. For brevity, the initiatives taken under each objective are omitted.

616 Chapter 15: Strategy, balanced scorecard and strategic profitability analysis M15_HORN3377_02_LT_C15.indd 616 2/09/13 3:56 PM Objectives Measures Target performance Actual performance Financial perspective Increase shareholder value Operating profit changes from price recovery $90 000 000 $95 000 000 Operating profit changes from growth $65 000 000 $67 000 000 Customer perspective Increase market share Market share of overall petroleum market 10% 9.8%

Internal-business-process perspective Improve petrol quality Quality index 94 points 95 points Improve refinery performance Refinery-reliability index (%) 91% 91%

Ensure petrol availability Product-availability index (%) 99% 100%

Learning-and-growth perspective Increase refinery process capability Percentage of refinery processes with advanced controls 88% 90%

Required 1 Was Caltex successful in implementing its strategy in 2015? Explain your answer.