Model and Strategic : Balanced Scorecard and Communication of Caterpillar Inc - Business Plan Example

BUSINESS MODELS AND STRATEGIC PLAN: BALANCE SCORECARD AND COMMUNICATION PLAN Table of Contents Table of Contents 2 Balance Scorecard of Caterpillar Inc.: 3 Strategic Objectives Summary: 4 Impact of Balance Scorecard on Stakeholders: 6 Communication Plan: 7 References: 10 Balance Scorecard of Caterpillar Inc.: Caterpillar Inc. is trying to establish a new operational system that would connect the manufacturing units of the company with their customers enhancing the quality of service delivery process. The primary focus of Caterpillar Inc. is to make optimal utilization of the available technological resources and reduce the delivery time of customer orders and gain a cost competitive advantage and absolute brand equity in the market. However, existing operators such as Joy Global Multi-national Company, CNH Technology, Deer, etc. pose a serious competition for Caterpillar Inc (Bouchard, 2014). Thus, the strategic objectives will have to be formulated considering all the internal and external factors that can influence the business operations of Caterpillar Inc. The following balance scorecard presents the strategic aims and objectives for the new division of the concerned company: Balanced Scorecard Customer Value Perspective: To increase the customer satisfaction level by creating new service delivery process for reducing the response time of order completion. Objectives: To develop an extensive communication network with the customers. To create a chain of information processing among the customers, sales and manufacturing department. To reduce technical and human errors such as duplicity, order merging, etc. Financial Perspective: To reduce the cost of operations with integrated operations system and ensure a return of $2 billion on an investment of $30 million. Objectives: To estimate the cost of operations for specific segments of the new division and assess the expected time for recovery of investment. To identify the market demands and supply for effective inventory management. To identify the risks and uncertainties that can hamper the financial stability of the new division. Internal Operations Perspective: To reduce the scope of technological glitches and create a collaborative network among the sales and the manufacturing segment. Objectives: To create a supportive logistics process for ensuring appropriate service delivery. To develop coordination among the production and the market demands for reducing operational cost. To reduce the time taken for processing of customer orders with proper use of technological resources. Learning and Growth of Employees Perspective: To assess the gaps in knowledge and skills of the employees and implement training programs for the required concerns. Objectives: To identify the probable changes in the operational process and train the employees accordingly. To create a work structure in relation with the organizational objectives. To develop a shared vision withIN the workforce for ensuring their full commitment towards the organizational objectives. Strategic Objectives Summary: The strategic objective of Caterpillar Inc. is to utilize the technological resources in an innovative manner and enhance the efficacy of their service delivery process for boosting the customer satisfaction level. The strategic objective has been developed on the basis of the mission statement of Caterpillar Inc. In order to create a direction based approach for achieving the strategic objective, the balance scorecard has been used for segmenting the aims of each of the functional departments associated with the new division (Finney, Lueg, & Campbell, 2010). The primary segmentation of the strategic objective has been made in four categories namely, customer value, financial, internal operations and learning and growth of the employees. The balance scorecard reflects the individual objectives of each of the different functional segments of Caterpillar Inc. The growth of the business competition and the scope of market fluctuation have been considered while developing the strategic objectives for the new customer service delivery division of the company (Schulze, Skiera & Wiesel, 2012). The customer perspective objectives focus on developing a transparent transaction process between the manufacturing departments and the consumers of the company. The fulfillment of the objective will reduce the overall time taken for processing the customer orders and also enhance the accuracy in the service delivery process (Finney, Lueg, & Campbell, 2010). Rectification of key errors such as duplicity or merging of orders has also been considered as crucial objectives of the business process. Similarly, objectives related to financial perspective of the company focuses on the growth of the business are primarily related to reduction of operational cost and utilization of resources for enhancing the scope of return on investment. The financial segment of the company also focused on identification of the risks and uncertainties in the implementation of the new service delivery system that can reduce the financial stability of the business process. On the other hand, internal operations objectives focused on the specific needs of the new division. The process of developing a supportive logistics network to ensure appropriate service delivery and reduction of technological malfunctions will enhance the service delivery process of Caterpillar Inc. Finally, internal work structure and culture has been focused upon for implementation of the new division’s strategic plans (Caterpillar, 2014). Impact of Balance Scorecard on Stakeholders: Figure 1: Stakeholder Analysis (Source: (Finney, Lueg, & Campbell, 2010, p 928) The segmentation of the stakeholders given in the above model has been done in accordance with the requirements and the strategic planning of the business process. Considering the balance scorecard, in order to gain customer satisfaction, Caterpillar will focus on establishing communication networks with the use of both online and offline mediums such as social networks, website chat process, television ads, leaflet distributions, etc. Communicating with the consumers for providing information regarding the use and benefits of the new customer order delivery system will help in developing stakeholder confidence (Marcer, 2012). The employees have been considered to be managed closely for ensuring that the training process of the workforce is aligned with the business objectives of the firm. Apart from adaptations with the changes in the operational process, proper collaboration among the sales and the manufacturing departments are essential for achieving the desired results (Schulze, Skiera & Wiesel, 2012). Considering the tough competition in the industry, the competitors strategies will be monitored closely for developing their business process and implement necessary changes in the strategies of the new division operation. Finally, the investors should always be informed of the business activities for maintaining their trust on the organization and develop opportunities for mutual growth (Bjornenak & Ax, 2005). Communication Plan: Purpose: The communication developed for the new division of Caterpillar Inc focuses on creating trust and a sustainable relationship with the stakeholders of the business. The objective framed focuses on increasing the transparency in the business operations. According to Kaplan (2009), initiation of appropriate communication helps in brand building and also influences the customer perception creating scope for long-term brand positioning. Caterpillar Inc. is trying to build a mutual vision and a shared value among their stakeholders by reflecting the efforts of the company in context of service improvement. Thus, in short it can be stated that the communication plan for the new division of the company will focus on creating a transparent buyer-seller relationship. Audience: The target audience for the communication plan can be segmented according to the implementation process of the new division plan. During the initial stage of the implementation process of the new service delivery process, the target audience of the communication plan will be the investors and the external support systems such as the logistics department of the company (Caterpillar, 2014). This will help Caterpillar Inc in ascertaining the capability of the business in context of achieving the set objectives. The next phase of the communication plan will consider the internal workforce of Caterpillar Inc. While communicating with the employees, the communication plan will focus on clarifying the roles and responsibilities of each of the functional departments for supporting the business objectives (Yaprak, 2008). The final phase of the communication plan will target the customers. This will be the most extensive session of the communication process and will be integrated with the promotional aspects of the business. Integration of the communication plan will also help in creating public relations for promotion of the new service delivery systems of business (Brusoni & Prencipe, 2009). Channel of Communication: Caterpillar Inc can get in touch with their customers with the help of online surveys, social media networking, website chat process and offline events or face-to-face survey. On the other hand, the workforce of Caterpillar Inc. will be communicated via regular open meetings and corporate events for aligning the objectives of the employees with that of the organization. Apart from these, the investors and other potential business growth related stakeholders such as upcoming firms or logistics partners will be involved in detailed meetings with the company to reduce chances of miscommunication and form a corporate relationship by engaging and fulfilling all the legal responsibilities of the both the parties (Goksoy & Ozsoy, 2010). This report focused on developing and analyzing the strategic objectives for the new business strategy of Caterpillar Inc. In relation to the objectives developed in the balance scorecard the stakeholder holder analysis has been conducted and the communication plan for Caterpillar has also been developed. References: Bjornenak, T. & Ax, C. (2005). Bundling and diffusion of management accounting innovations: the case of the balanced scorecard in Sweden. Management Accounting Research, 16, 1-20. Bouchard, C. T. (2014). The Caterpillar way: lessons in leadership, growth, and shareholder value. New York, NY: National Academy Press. Brusoni, S. & Prencipe, A. (2009) "Strategic dynamics in industry architecture and the challenge of knowledge integration," European Management Review, 6.4, 209-216 Caterpillar (2014) An abandoned mine, A rare treasure and a rescue. Retrieved from: http://www.caterpillar.com/en/news/caterpillarNews/history/an-abandoned-mine-a-rare-treasure-and-a-rescue.html Finney, R. Z. Lueg, J. E. & Campbell, N. D. (2010). Market pioneers, late movers, and the resource-based view (RBV): A conceptual model, Journal of Business Research, 61, 925–932. Goksoy, A. & Ozsoy, B. (2010) Business Process Reengineering: Strategic Tool for Managing Organizational Change an Application in a Multinational Company, International Journal of Business and Management, 22, 256-264. Kaplan, R. (2009). The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. 3rd ed. Boston Mass: Harvard Business School Press. Marcer, D. (2012). Marketing strategy: the challenge of the external environment. 5/e. London, Washington: Sage Publications. Schulze, C., Skiera, B. & Wiesel, T. (2012). Linking Customer and Financial Metrics to Shareholder Value: The Leverage Effect in Customer-Based Valuation. Journal of Marketing, 76:2, 17-32 Yaprak, A. (2008). Globalization: Strategies to build a great global firm in the new economy. Thunderbird International Business Review 44 (2),297–302. Read More