Finance, Funding and Legislative Frameworks for Success - Case Study Example

Finance, Funding and Legislative Frameworks for Success Contents Contents 2 Executive summary 3 Mission Vision Strategy of Restaurant Group Plc 4 Balanced Score Card analysis 5 Strategy Map of Restaurant group Plc. 13 Recommendations 15 Conclusion 16 References 16 Executive summary The Restaurant Group plc is being considered as the leader in terms of the chain of restaurant in Britain. It carries out its operation in more than 400 restaurants and pubs across the world. The Balance Score card has been implemented in order to achieve the mission and vision of the plc. Since it is the market leader and in order to maintain the position and gain competitive advantage it has considered the four perspective of the balance score card that is the customer, internal process, financial and learning and growth perspective of the Plc. And the objective, measures, initiatives and targets of the Plc has been considered along with the four perspectives in the form of the balance score card. In order to implement the strategy the balance scorecard have been developed and transformed into strategic map. The main objective or the mission of the restaurant group plc is expanding its business and franchise and increasing the shareholders wealth the restaurant is focusing on providing valuable products and services to its customers. Therefore in order to expand and widen its area of operation it has focused on the strategic map of the plc. Mission Vision Strategy of Restaurant Group Plc The main and the prime objective of the Restaurant Group Plc is increasing the value of the shareholders and deploying the strategy for achieving the objective and attaining the goal or the mission of the organization in order to build or develop the capability of the business for expanding and improving the long term sustainability of the cash flows. On the basis of this objective and mission the restaurant group has focused on diverging and expanding the market for delivering the goods so that it can earn huge amount of profit and also generating cash flows which is considered as favourable for increasing the growth and profit of the company and increasing the high return from the investment. The group in order to achieve its mission has focused on three main and important areas, which includes concession, leisure and also pub restaurants. The restaurant group plc mainly operates or carries out its operation for expanding its dinning market and also providing high value of services for the money or the amount charged. It focuses on providing excellent services at a comfortable surrounding with the help and support of its dedicated team and workforce. The main strategy of the group is delivering the growth for promoting its brand. The restaurant group focuses on operating in dynamic market. The group possesses expertise and excellence in delivering drinks and foods that is favourable and preferred by the clients. The restaurant group is very proud in delivering excellent service and good food accompanied by passion of the group (Cox & Fardon, 2008). Balanced Score Card analysis Restaurant group plc, Financial perspective All Financial Goals are for the corporation as a whole Goal KPI Target Initiative or Action 1. Cash Flow Liquid ratios which includes the current ratio, quick ratio and the working capital. Increasing the liquidity ratio more than 1 Increasing the current asset base of the company as compared to its current liabilities. 2. Shareholders Return on investment Increasing the return on investment by more than 15% of the amount invested. Proper utilization of the asset of the company.. 3. Profitability Increasing return on asset Increasing the return on asset by 5% by the end of quarter Improving the long and short term asset of the company 4. Sales growth Value of Sales. Revenue is to be increased by 10% as compared to the previous year Decreasing the cost of sales. The financial perspective that is considered by restaurant group plc taking into consideration the cash flow, profitability, shareholders interest and the sales growth of the restaurant group plc it is found or observed that the main aim of the group taking into consideration the financial perspective of the group is maximizing the value at the least possible cost, maximizing cost that is related or associated with savings , increasing or improving the productivity of the group and make timely payments (Hill, and Jones, 2007). The importance of the financial perspective in case of the restaurant group plc is that since it is a restaurant group that is engaged in providing quality food and services to its customers therefore the strategic choice plays an important role in delivering timely and accuracy in funding of the data (Johnson, Scholes and Whittington, 2007). The key or the important financial perspective is improving the sustainability of the funding that is required for undertaking the sustainability that is required for funding in order to implement the strategy. Therefore this perspective analyzes and summarizes the financial situation of the group (Ittner, and Larcker, 2003). The shareholders interest is considered by taking into consideration the earning price per share, which has increased the price earnings ratio has also increased by 15%, and the dividend yield has also increased by 3 % which implies that the group is capable of improving the interest of the shareholder. The profitability situation of the industry which is evaluated taking into consideration the return on shareholder fund, the return on asset , profit margin and the gross profit margin which has decreased recently as compared to the previous year (Henry, 2011). Restaurant Group plc, Customer perspective The elements are required to be considered for maintaining and developing strong customer base. GOAL KPI Target Initiatives or Actions 1 Market Share Continuously focusing on improving the satisfaction of the customers Increasing the market share by more than 14% Percentage of sales or revenue derived from the new services offered 2. Retention Decrease the lead time Decreasing the lead time from 30 minutes to 20 minutes from the time of delivery On time delivery of the product and the services as determined by the customers 3. Loyalty Reduce the complaint of the customer Resolving the complaint of the customer within two days. Share of purchases or the services attained. 4. Satisfactions Increasing the delivery of the product and service on time. The number of efforts. Quick delivery of the services The health and the safety of the customers are provided great importance in case of the Restaurant group Plc. The group has emphasized on the elements such as developing the market share, maintaining the loyalty, retaining the customers and providing adequate satisfaction to its customers (Fonvielle, and Carr, 2001). The group is emphasizing on providing employment to more than 11000 people across the world. The customer perspective is considered as an important factor of the balance scorecard as it helps or assists the group in the achievement and attainment of the mission and vision of the group. Since it is restaurant industry therefore it is subjected to an increase rate of competition and in order to sustain in the increasing competition the main objective of the group is measuring the targets of the group and then implementing the strategy for providing adequate satisfaction to its customers (Ulwick, 2005). Restaurant Group plc, Internal Business perspective The elements of internal process that is required to satisfy the group of customers GOAL KPI Target Initiatives or Actions 1. Cost Improving the technological capability. Reducing the cost of the services that is offered by 2% A comparison is made with the other competitors existing in the, market. 2. Productivity Improving process efficiency by reducing rejection rate Increasing and improving the productivity by reducing the rejection rate by 3% Comparing the actual production or innovation of services with the planned introduction or innovation. 3. Cycle time Decreasing the cycle time that is required. The cycle time is to be reduced by 30% at the end of 6 month The cycle time, yield and unit cost is measured or determined. 4. Quality Introduction of new and quality services New technology is to be adopted for improvement in quality within 3 months. Comparison of the quality and maintaining a standard for the quality of foods or services that is offered. The internal process factor in the balance score card mainly deals with the elements that bear required to be considered for the fulfilling the needs and requirement of the customers. The internal business process is focusing on the improvement of the business process (Peng, 2013). The main objective of the internal process is gathering timely and effective collection of data. The restaurant group Plc is engaged constantly in widening its portfolio and increasing its number of brands. The group has emphasized on providing importance to its people or customers since it considers its customers as an asset of the company (Niven, 2010). Restaurant Group plc, innovation and learning perspective The elements in the innovation and learning perspective are required to capture and satisfy the needs and wants of the customers. GOAL KPI Target Initiatives or Actions 1 .Employee Retention Extent of employee empowerment Maintaining the working hour by 8 hour per day. Increasing or developing the sale of new products or foods and services that is offered to its customers. 2 Technology Leadership Number of strategic skill that is learned The technology is to be improved by 1 year. Time required by the group to attain the period or stage of maturity. 3 Product Diversification. Increase in number of products. Increase or introduction of new products within 1 year The initiative is required to be taken by the group in terms of innovation and production of new products, services and projects for the customers. 4 Strategic HRM Decreasing the staff turnover rate. Reducing it to 3% from 5% by the end of the year. Building or innovating franchisee services for its group. The learning and growth perspective is considered as very important and prime element of the balance score card since it focuses on improving the capability or the ability of the group for the innovation and improvement of the activities for achieving success by the group. The company is engaged in carrying out its operation in more than 350 restaurants across the world (Mcfarlin, and Sweeney, 2008). The group has focused on providing the adequate value for money in terms of its service or the quality of foods that is provided to its customers for widening its operation. The company also possesses fourteen to sixteen pubs for expanding its area of operation (Jackson, 2007).  For example in case of Frankie and Benny’s the restaurant is focussing on customer perspective by providing quick and friendly service to all of its customers and increasing its meal by more than 43 million. Considering the internal process perspective the restaurant deals with reducing the lead time or the waiting period of its potential customers. Considering the learning and growth perspective the restaurant has focused on continuous development and evolution of its brand and considering the financial perspective of the balance score card the restaurant has the aim of increasing its cash flow and increasing its shareholder value (Ashley, 2014). Strategy Map of Restaurant group Plc. The Balance Score card have been modified and implemented in the strategic form that will be suitable for the organization. The strategic map is linked with the balance score card for providing or introducing a new framework or structure that is required for implementing the strategy map that has been developed by Kaplan and Norton in order to provide a logical framework for developing a strategy (Kaplan and Atkinson, 1998). The restaurant group plc has also focused on the implementation and adoption of strategic map for developing the strategic management system. The strategic map generally establishes the relationship between the cause and effect in order to convert the intangible asset to the tangible asset or form. The main purpose or the aim behind the implementation of the strategy map is that it provides adequate solution for the problems. The strategic map has mainly focused on the three forms or types of capital that is human capital; which mainly deals with the knowledge, values and skills, the organization capital which deals with the alignment, culture, leadership and team work and the information capital which deals with the database, networks and systems (Kaplan and Norton, 2006). Figure 1: Strategic Map The above diagram reflects that restaurant Group Plc in order to implement its strategy is required to consider the strategy map and the four perspective in case of its The financial perspective of the strategy map is related to the improvement of cash flow by improving its asset utilization, for improving its profitability the company is required to improve its cost structure, and for increasing its sale the company is required to enhance its customer value and for improving shareholders value the plc is required to expand its revenue opportunities The customer perspectives of the strategy map related to the improvement in the market share, retention rate, and loyalty and satisfaction rate by considering the price, quality, service and brand of the products that is offered to the customers. The company is focussing on retention of its customers by increasing the loyalty of the customers The internal process perspective of the strategy map mainly includes the elements of cost, productivity, cycle time and quality increase or the improvement in the innovation of various quality services that is provided. The company is required to improve its quality and reduce the lead time in order to increase the productivity The learning and the growth perspective of the strategy includes employee retention, technology, climate and culture can be maintained by improving and focussing on human, Organizational and information capital and the company is required to satisfy its employees which will assist in diversifying its product (Kaplan & Norton, 2004). Recommendations Considering the various perspective of the balance score card of Restaurant group plc it has been observed that on the basis of its profitability measures by evaluating various profitability ratios it has been found that the profitability situation of the Plc has deteriorated in the recent years as compared to the previous year which is not favourable therefore it is required to increase its profitability for meeting its short term liabilities. When the efficiency ratio of the company is taken into consideration it has been found that the collection period has been increased as compared to the previous year, which implies that the collection period of the Plc is required to be reduced in order to minimize its debt obligation. The Key performance indicator on the basis of various perspectives has been established for monitoring the activities of each perspective in the balance scorecard. The liquidity position of the company has reduced as compared to the previous year therefore the Plc is required to improve the liquidity position of the company therefore the plc is required to increase its current asset base in order to meet its short term debt obligations. The restaurant group Plc has to consider on various perspectives and aspects for gaining competitive advantage. Conclusion Restaurant group Plc has emphasized on the four perspective of the balance score card which includes the internal process, customers, learning and growth and the financial perspective. Since it has the objective of expanding its business and being considered as the market leader therefore it is required by the company to develop its strategy to gain competitive strategy therefore it have adopted the transformation of the balance score card to strategic map. References Cox, D. and Fardon, M., 2008. Management of finance. Worchester: Osborne Books. Fonvielle, W. and Carr, L.P., 2001. 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