Caltex Inc. refines gasoline and sells it through its own Caltex Gas Stations. On the basis of market research, Caltex determines that 60% of the overall gasoline market consists of "service-oriented customers," medium- to high-income individuals who are willing to pay a higher price for gas if the gas 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 gasoline. The remaining 40% of the overall market are "price shoppers" who look to buy the cheapest gasoline available.

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Caltex's strategy is to focus on the 60% of service-oriented customers. Caltex's balanced scorecard for the year follows. For brevity, the initiatives taken under each objective are omitted.

		Target	Actual
Objectives	Measures	Performance	Performance
Financial Perspective
Increase shareholder value	Operating-income changes from	$90,000,000	$95,000,000
	price recovery
	Operating-income changes from growth	$65,000,000	$67,000,000
Customer Perspective
Increase market share	Market share of overall gasoline market	10%	9.5%
Internal-Business-Process Perspective
Improve gasoline quality	Quality index	94 points	97 points
Improve refinery performance	Refinery-reliability index (%)	91%	91%
Ensure gasoline availability	Product-availability index (%)	99%	100%
Learning-and-Growth Perspective
Increase refinery process capability	Percentage of refinery processes with	88%	90%
	advanced controls

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Part 1

Requirement 1. Was Caltex successful in implementing its strategy for the year? Explain your answer.

Caltex was

successful

unsuccessful

at implementing its strategy for the year for many reasons.