BALANCE SCORECARD WINING MARGIN MBE B4; Kieran NellistAlexey Trush Karthik KuppuswamyKalin Pipatanantakurn Panji SukmaMajid Zabihi

 Balance Scorecard  Alternative  Advantages and Disadvantages  Strategy and Vision  Conclusion Today's Agenda

DEFINITION Balance Score card is the management tool that looks beyond short term financial position of an organisation as a measure of its performance. By incorporating a variety of perspectives into its organisational outlook its gives a more holistic view of performance. Balance Scorecard Institute (2011)

DEFINITION The common perspective's used in a Balance Scorecard are:  Financial Performance  Customers  Innovation and Growth  Internal processes WMG web site (2011)

DEFINITION “Management by Objectives is basically a process that starts with the setting of objectives for individuals, and finishes with a review of an individual’s performance, based on their own and the organization’s results”. “Hoshin Kanri is the Japanese strategic planning process designed to ensure that the mission, vision, goals, and annual objectives are communicated throughout an organization, and implemented by everyone from top management to the shop floor (frontline) level”. WMG web site (2011)

COMPARISON Long termFlexibilitySystemicTeamworkSystematic Balance Scorecard ✔✔✔✔✔ Hoshin Kanri ✔✔✔✔✔ Management by objectives ✔✔✔ WMG web site (2011)

ADVANTAGES OF BSC  Structured approach to analyse the perspectives  Align organisation strategy with daily operation basis  Work for the long term objectives through short term actions  Integration of varied performance measures from all aspects of an organisation Balance Scorecard Institute (2011)

DISADVANTAGES  Time consuming  Difficulties of measurement  Disconnection of objectives and results  Lack of benchmarking  Measure selection Balance Scorecard Institute (2011)

SOLUTIONS FOR DISADVANTAGES  Time consuming:  A project team to lead change  Difficulties of measurement  Selection of tangible performance indicators  Disconnection of objectives and results  Training  Lack of benchmarking  Market research  Measure selection  Measure testing Balance Scorecard Institute (2011)

VISION “Create a long term sustainable business that operate considering the best interest of all stakeholders to create a marketing leading product”

OUR STRATEGY  Research market potential for a new product  Invest in new equipment  Invest in new technology.  Reorganise production line  Reorganize the Leisure sales team  Increase marketing spend to £180k  Reorganize Finance and HR departments  Introduction of the Finance package

BALANCED SCORECARD Balance Scorecard Institute (2011)

ObjectivesMeasures Target Year1Year2Year3Year4Year5 Financial 1. Estimated cost of 25k Pounds of Finance Package spending How much the company spends ? 5K10K 2. Estimated budget of marketing spending of 180k Pounds " 25K75K80K 3. Estimated 150k Pounds on the new technologies expenditure " 20K50K 30K 4. Estimated 250k Pounds on the new equipment " 125K 5. Increase operating profit Operating profit figures minimum rise 10% each year 6. Inventory reductionInventory figures minimum 15% decrease each year FINANCIAL Lascelles, D.M.(2008).

CUSTOMER AND LEARNING & GROWTH ObjectivesMeasures Target Year1Year2Year3Year4Year5 Customer 1. Creating new consumer base Sales outcome of new product Maintain current customerSales outcome minimum 1000 per year until inventory ends Learning and Growth 1. Training new sales person Sales outcome growth minimum rise 7% each year 2. Development of new financial system Reduction of transactional inefficiency and errors Reduction of errors yearly 3. Identify successful new market promotional campaigns Outcome of the promotion result from the marketing team 10% rise in sales each year 4. Investing in new technologies Assets turnover ratio 4% rise each year Kaplan, R. (1996)

INTERNAL BUSINESS PROCESS ObjectivesMeasures Target Year1Year2Year3Year4Year5 Internal Business Process 1. Reconstruct the business to suit new markets' need Market shareminimum rise 1% yearly 2. Reorganize the production lineCapital intensityyearly increase for each product 3. Reorganize the leisure teamIncrease salesSales increase 4. Investing in new technologiesBusiness effieciencyROCE, ROI, ROE, Acid ratios 5. Reorganize Finance and HR departments Working performance of both departments Decrease in administration overhead costs 6. Reduce the number of HR clerical staff to 1 Number of clerical staff retired Kaplan, R. (1996).

ASSUMPTIONS -We assume that Finance Package will reduce errors -We assume that restructuring of the business will lead to a market share growth each year -We assuming that company might can maintain the current product sales meeting the demand -We assume that marketing for a new product is successful and consumer base is created -We assume that training of staff will increase sales -We assume that investments in new technologies will increase efficiency -We assume that reorganisation of some of departments will reduce the administration costs -We assume that reorganisation of the production line will cover the needs of both products

CONCLUSION While many approaches to strategy implementation exist, we saw the use of the balanced scorecard as the best suited to our strategy and future development of the Waveriders company. Through its implementation we created a 5 year strategy implementation focuses on 4 keys area of the firm to implement year by year actions to achieve long term business objectives outlined in our strategy.

REFERENCES 1)Balance Scorecard Institute. Retrieved February 11, 2011, from: ncedScorecard/tabid/55/Default.aspx 2)WMG web site (2011). Balance Scorecard. Retrieved February 10, 2011, from: elist/le/sessions/strategy/bsc/scorecard/ elist/le/sessions/strategy/bsc/scorecard/ 3)Lascelles, D.M.(2008). Self-Assessment for Business Excellence. McGraw-Hill Book Company Europe. 4) Kaplan, R. (1996). The Balanced Scorecard: Translating Strategy into Action. Harvard Business Press.