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

The following information is provided:

a. Scott currently follows a cost leadership strategy, which is reflected in its lower price compared to its competitors.

b. The following figure shows Scott’s Strategy Map with the 4 perspectives and related objectives.

c. The following table shows the objectives and measures for Scott’s emerging BalancedScorecard.

Financial Perspective	Operating income from productivity and quality improvement Operating income from growth Revenue growth
Customer Perspective	Market share Number of additional customers Customer-satisfaction ratings
Internal-Business- Process Perspective	Percentage of defective products sold Number of major improvements in manufacturing process
Learning-and- Growth Perspective	Employee-satisfaction ratings Percentage of employees trained in quality management Percentage of line workers empowered to manage processes Percentage of manufacturing processes with real-time feedback

Required:

1. Given the Strategy Map, strategic objectives for each of the four (4) perspective and the related measures, complete the Balanced Scorecard for Scott by improving on the measures and adding a complete set of Targets and Initiatives for each objective. (36 marks)

2. Ensure the alignment of the BSc metrics with the given objectives. (24 marks)

3. Give two (2) examples of environmental costs relevant to the DVD manufacturing industry and discuss briefly how each cost might affect any two Perspectives on Scott’s Balanced Scorecard. (10 marks)

cal Poine operating income Increase operating income from FINANCIAL Grow Grow PERSPECTIVE revenues productivity and quality Increase market share in CUSTOMER Increase Increase PERSPECTIVE customer satisfaction customers electric motors market Trigger Improve Point INTERNAL- quality BUSINESS- PROCESS PERSPECTIVE Improve productivity Improve manufacturing processes D Focal Point Align employee and organization goals LEARNING- Train employees to develop process skill Improve manufacturing AND GROWTH- PERSPECTIVE feedback Trigger Point Empower employees / Point Trigger Poine Focal Point