Question
Russell Hood owns Horse Champions, a horse stable that raises champion Thoroughbreds for showing and breeding. His vision is to be the best-known breeder of
Russell Hood owns Horse Champions, a horse stable that raises champion Thoroughbreds for showing and breeding. His vision is to be the best-known breeder of Thoroughbreds globally. His strategy is to breed and sell horses from outstanding lineage from the standpoint of both physical health and good-natured temperaments. The following table contains information about his operations over the last year.
Revenue from ponies | $30,000 |
Number of ponies returned | 3 |
Travel expenditures | $60,000 |
Trainer turnover | 4 |
Number of championships | 22 |
Pony owners' average satisfaction rating on a scale of 1 to 5, with 5 being most satisfied | 4.7 |
Training time to prepare ponies for shows (hours per week per pony) | 3.5 |
Required:
(a) Is the entity's strategy one of cost leadership or product differentiation? Explain.
(b) Classify each performance measure according to one of the four balanced scorecard perspectives.
For example:
Revenue from ponies | Financial |
(c) Based on the above performance measures, Russell found that pony owners' average satisfaction rate has decreased to 4 compared to the previous year. Explain how this change affects other measures.
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