Question
Birgit Margot, the CFO of Baby Beemers Ltd, has decided to implement Baby Beemers new business strategy using the Balanced Scorecard. Baby Beemers is the
Birgit Margot, the CFO of Baby Beemers Ltd, has decided to implement Baby Beemers new business strategy using the Balanced Scorecard. Baby Beemers is the leading retailer of baby accessories, such as cribs, baby clothes and toys in Australasia. The new strategic themes of Baby Beemers are Service Excellency and Superior Product Quality.
Birgit has developed the following Balanced Scorecard (see overleaf), which she intends to present to the senior executive team at the next board meeting. Birgit has asked you, as the companys strategy consultant, to review the Balanced Scorecard and assess the extent to which the scorecard is supportive of Baby Beemers new strategic themes.
Specifically, you must:
- Identify three (3) positive features of Baby Beemers Balanced Scorecard, and explain why they are positive features. (9 marks)
- Identify three (3) flaws / weaknesses of Baby Beemers Balanced Scorecard and explain why they are flaws / weaknesses. (9 marks)
- Provide recommendations for how to improve the components of the Customer Perspective. Your recommendations must outline two objectives, two measures, two targets, and two initiatives for the Customer and Financial Perspectives. (12 marks).
Note that you are asked to apply your general knowledge of the Balanced Scorecard to analyse Baby Beemers Balanced Scorecard. Laundry lists of generic strengths and weaknesses of Balanced Scorecards will receive zero marks.
Baby Beemers Proposed Balanced Scorecard
| Objectives | Measures | Targets | Initiatives |
Financial perspective | Cost reduction | Overhead costs as a % of total costs
Variable costs as a % of revenue | 10% decrease in overhead costs
12% reduction in variable costs | Reduce R&D expenditure, which currently is a significant overhead cost.
Reduce employee costs in service outlets, which comprise a significant part of total variable cost. |
Customer perspective | Service Excellency | Number of customer complaints
Employee satisfaction
Marketing expenditure as % of total revenue
| Less than 2% of customers file a complaint
85% of employees very satisfied
7% decrease in marketing expenditure | Set up customer complaint handling unit.
New remuneration scheme.
Launch new marketing campaign to reposition Baby Beemers brand to communicate Service Excellency and Product Quality
|
Operation and Supply Chain Processes | Superior Product Quality | Faulty products as % of total products sourced
Number of products produced in low cost producing countries such as Africa and Russia. | Less than 4% faulty products as a % of total products produced
African produced products as a % of total products
| Implement Total Quality Management program.
Implement new supplier souring program targeting African and Russian manufacturers.
|
Learning and growth perspective | Strengthen Employees Service Capabilities
| % of staff having completed Baby Beemers new learning and development (L&D) program
Culture change as measured by change in employee attitude
Number of collaborative research programs
| 60% of floor staff having successfully completed the L&D program
% completion of implementation of culture change program
Increase number of collaborative research programs from 2 to 5 | Create partnership with UNSW to operate the L&D program.
Design and implement culture change program.
Form partnerships with leading researchers in social and medical sciences. |
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