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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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