Balanced scorecard and strategy.

Scott Company manufactures a DVD player called the Maxus. The company sells the player to disocunt stores throughout the country. This player is significantly less expesive than similar products sold by Scott's competitors, but the Maxus offers just DVD playback, compared with DVD and Blu-ray playback offered by competitor Nomad Manufacturing. Furthermore, the Maxus has experienced production problems that have resulted in significant rework costs. Nomad's model has an excellent reputation for quality.

1. Draw a simple customer preference map for Scott and Nomad using the attributes of price, quality, and playback features. Use the format of Exhibit 12-1.

2. Is Scott's current strategy that of product differentiation or cost leadership?

3. Scott would like to improve quality and decrease costs by improving processes and training workers to reduce rework. Scott's managers believe the increased quality will increase sales. Draw a strategy map as in Exhibit 12-2 describing the cause-and-effect relationships among the strategic objectives you would expect to see in Scott's balanced scorecard.

4. For each strategic objective, suggest a measure you would recommend in Scott's balanced scorecard.

BUILDING IN CAPABILITIES: QUALITY lMPROVEMENT AND REENGINEERING AT CHIPSET 497 Price Exhibit 12-1 Visilog Customer Preference Scalability Chipset Map for LICDs Customer service Quality Power and speed A Customized chip design Very Good Poor Attribute Rating