Financial Service - Home Retail Group - Coursework Example

Running head: Financial service (Home Retail Group) 4th April Executive Summary The paper seeks to discuss the vision and strategy of Home Retail Group. Home Retail Group is a financial assistance company that provides credits card to individuals. The credit card plays a major role of ensuring that one can pay the merchants without necessarily carrying cash. Additionally, online shopping is easy since individuals just need to use the cards. The paper further seeks to discuss how mangers, directors and other managerial leaders use balance scorecards to align business activities to the identified vision and strategy, and to monitor performance against strategic goals. The balance scorecard has included the following perspectives. Internal business process perspectives, customer perspectives, innovation and learning and finance perspectives. In addition, there is a built strategy map to describe and explain how each aspect of the scorecard can assist companies in achieving its goals and targets. It has also summarized the recommendations to the board. Lastly the paper has critically discussed the use of balanced scorecards for performance management and monitoring. Introduction Financial service (Home Retail Group) in United Kingdom is known for its unique services as a general merchandise retailer. The company provides fund and insurance services to Argos, Homebase and also it serves the online consumers by providing the same services. The payment cards that are provided to the users give the customer the advantage to pay for the commodities based on the agreement that the goods and services was supposed to be paid. Home Retail Group is among the companies that are listed in the London stock exchange due its provision of finance and insurance products. The financial services that are provided keeps the customer revolving account on line credit implying that the customers can seek financial assistance and pay the merchant. Vision Argos values one input and this is the reason they have talented employees who work to achieve the vision of the company. The employees work on the belief of valuing the input of the customers. The vision attainment explains where Argos wants to be placed or want to be and the strategy that can be employed to reach where they want. The vision considers everyone who is in business transaction with Argos and the individual who want to start or hoping to venture with Argos. The vision of Argos is to build on commitment on delivering the choice of the customer, value and at the right time with passion to satisfy the customer. This implies that the company considers the value of the customers who shop in store, online and those who use check and reserve. Others use phone to text the employees through iphone app that brings the choice of the customers in their convenience. This has made Argos to be the pioneer in the retail of finance and insurance products. The Argos has a slogan that they embrace “find it, get it, Argos it”. The aim of Argos is to provide pick up points that is convenient to the customers and expand its products and services. Strategy To attain the vision of Argos of providing the commitment of delivering the choice of the customers at convenient time that they deserve, a strategy has to be employed to make it a reality. The management together with the key stakeholders have adopted the online services strategy so that they can expand the services to the consumers. The strategy has made it possible for the company to continue delivering exceptional value for fund by providing quality and best products to the consumers. The products are globally provided since the internet and mobile phones are used by the consumers making it possible and convenient for the customers since they can shop online. The strategy of attaining the goals of reaching many customers as possible is achieved by making sure that the stakeholders own the Argos and they make the transactions to be done in a faster manner. To achieve the vision, the stakeholders have employed a strategy of ensuring that they respect each other and ensure that they support each other so that they can excel together. Additionally, they are customer focused so that they can meet customer’s demands. They have employed a “competitive will” so as to win as a team. Balance scorecard Internal business process perspectives Key success factors (objectives Key performance indicator (measures) Target performance level (targets) Summary action plan (initiatives) Competence Retaining and recruiting talented employees Increase by 15% annually Employee’s increment and promotions Efficacy Increase output An increment of 5% quarterly based Customers credited are supposed to increase by 5% quarterly. Product quality Change the system of production that is operational New system should be implemented within the 5 months. Increase customer satisfaction by 5% Creativity should be encouraged as team to ensure that the goal is attained within 5 months invention lead times Production orders to be increased so that they can serve many customers as possible Stakeholders to ensure that 95% of them are in the office working. Overrun is going to be reduced by 60% in the first 10 months Increase of the employees by 15%. Overtime rates to be introduced. Perspective: customer Key success factors (objectives) Key performance indictor(Measures) Target performance level (Targets) Summary Action Plan(Initiatives) Image Conduct market research concerning the image of the company To be the customer choice company end of year Create trust to the customer. Advertising and pricing strategy be employed Response to orders Increase the sales order processing requirements Reduce the processing time from 30 to 17days Employ Consultants on casual based to give recommendations. Trustworthiness High quality products Innovation and creativity be employed within 1 year end Reliability create confidence to the customers Selling price Considering economy to set selling price Selling price to reduced in monthly by 1% Profit should be maintained. Management to consider the production rate. Perspective: innovation and learning Key success factors (Objectives) Key performance indicator (Measures) Target performance level (Targets) Summary action plan (Initiatives) workers motivation Retaining the employees An increase of 5% from 10% by the end of the year Team work to be emphasized, promotions and training the team leaders Employees progress Seminars and training session annually An average 20 hours annually Training should be conducted due to new machines New domestic products New system be introduced 2 annually The system should be run in phased system to avoid disruption of workflow. innovative market channels Introduction of market channels 1 per year Employed casual consultants to investigate market channels. Online shopping to be introduced Finance perspectives Key Success Factors (Objectives) Key Performance Indicator (Measures) Target Performance Level (Targets) Summary Action Plan (Initiatives) Cash Flow Analyzing liquid ratio Increase to 1.5 after every 6 month It is important to monitor and control credit system in the firm property Utilization Replacing of inventory Replace it about 3 times at end of 6 month Overtime hours be created to replace the turnover ratio Sales income Growth Considering sale value Increase by 6% at the end of every 3 month Target low production cost, market segmentation and reduce selling price Profitability Return capital Increase return capital from 10% to 15% at the end of year Sales must be increased and asset utilization Recommendations to the board One of the recommendations that Home Retail Group should embrace is being competence by retaining and recruiting talented individuals. For example, for the management to get talented individuals in the company, they have to consider the number of years they have worked. The employees who have worked for more than 15 years and above 30 years have the competence to handle issues and risks in the Home Retail Group. It implies that they have the capability to control and manage the department they are allocated to supervise and this is why they are supposed to be retained as recruitment of other employees continues. The second recommendation that should be considered by the management is to increase efficacy of the output. It implies that the cleared customers who have shown the commitment of being credited and are able to repay on time should be the only one who are supposed to be credited. Chances of the Home Retail Group operating in deficit are going to be reduced if they are effective on the report of the customers concerning their credit status. It is the work of the management to ensure that customers who are loyal are the ones to benefit from these financial services. The third recommendation is providing quality products that meet the consumer demand. For example, the product quality should be changed and if possible rebranding be done so that the customers can have confidence on what is being produced. New systems should be introduced so that difference on how product are being produced can be noticed and thus creating trust on the customers, that Home Retail Group is capable to implement new system (Wouters, 2012). By introducing new system, it implies that the Home Retail Group is creative and innovative, and thus operating within the customer expectation. Systems that cause delay and cannot be accessible sometimes causes frustration to customers who use online method of purchase since they have to use credited cards. It is recommended to change the system that causes delay and frustration to the customers so that they the consumers have confidence on services provided. The fourth recommendation is to make adjustment on the production trustworthiness. This implies that the production rate should be increased. It implies that whenever the customers need the services Home Retail Group can provide it without failure. Strategy map Internal business process perspectives customer Innovation and learning Finance perspectives One of the gaps that exist in the customer perspective strategy map is creation of the image of the Home Retail Group since it is expensive. It is imperative that more funds be used to advertise the company. In the long run it is going to be beneficial to the company. The second gap that is likely to be experienced in customer perspective strategy map is response to orders since the company has to employ casual based employees so that they can increase the production rate. It implies that the company has to bear the cost since if it is not properly budgeted, the company has to use other resources. The third gap that exists in the strategy map is lack of trustworthiness that incorporate creativity and innovation. This implies that more funds have to be used so that change can be incorporated in the company. One of the recommendations on the strategy map is to create a good image to Home Retail Group. This can only be possible by having sufficient funds to advertise the company products and services. The second recommendation is ensuring that creativity and innovation are employed in the company so that high quality products are produced. Though it is expensive to be innovative, the company has to incorporate system change which is recommendable to ensure that products that meet the consumer requirement are offered. The third recommendation is to ensure that selling price is set to be on average. This depends on how individuals in the society earns since low income earners have to go for cheaper services. The fourth recommendation is to ensure that the management is responsive on matters concerning the processing time (Harper and Randall, 2000). Delays when products are being processed should be reduced by a certain percentage so that the customers can feel as part and parcel of the company. The next recommendation on the strategy map on organizational capabilities is working as team. Goals are attained when individuals work as a team and there is a possibility of creativity and innovation. The last recommendation is emphasizing the profitability of the firm. The cost of production should be reduced and increase the sales revenue of the organization thereby making sure that firm can operate in profit and attain market share. Importance of balance scorecards The use of balanced scorecards is used in strategic planning and in management system for the managers and the directors for performance management and monitoring. The use of balanced scorecards gives the management view on how they can maintain the organization performance. For example by being competence, they are able to recruit and retain individuals who are competent and have experience on financial services. The value of the sales and return on capital must be incorporated in Home Retail Group so that analysis of the company on credit can be attained. The performance of the organization is measured by customer perspective (Clagett, 2003). For example, it is the role of the manager to ensure that the Home Retail Group satisfies the customer needs. The managements have to answer the question, “How do customers see us?” for example the image that the Home Retail Group portrays to the customers. Through advertising and carrying market research, advertising strategy should be considered so that the Home Retail Group can be the choice of the company to the entire customers. The selling price of the products should be reduced to cater for the customers and maintain the profit of the company (Perrey and Spillecke, 2011). To win the confidence of the customers, it is important to reduce the interest rates of the credit given. Failure to that, it will result to losing customers’ trust and changing their perspectives concerning the financial assistance. To maintain the organization performance, there is need to consider reliability of the customers. It implies that high quality products that meet the consumer requirements need to be addressed and provided to the consumers within the specified deadline. Reliability creates confidence to the customers and thus if creativity and innovation is considered it can lead to customer satisfaction. To maintain the organization performance and monitoring the management requirements, there is need to consider the critical internal operations. The internal operations needs to be undertaken so that the consumers are satisfied for example, what does Home Retail Group excel at? The vision of Home Retail Group is committed on delivering the choice, value and at convenience of the customers. This implies that the internal operations like services rendering must be done effectively to ensure that the customers are satisfied. Their choice must be respected and valued within the convenience of the customer. Internal operations like clearing customers credit status, daily routines of facilitating credits to the consumers among others must be done in a way that meet the customer requirement. To improve the performance and monitor Home Retail Group, the management must consider innovation and learning perspective. It is an important aspect that should be incorporated in the running of Home Retail Group. One notable importance of the scorecard is ensuring innovation. Innovation and creativity in the firm is a key tool that should be considered since it places the organization in a competitive market. Lack of creativity and innovation implies that status quo is maintained resulting to customer being not satisfied. The question that the managers should answer is whether they are improving or creating value to Home Retail Group services? By ensuring that they are improving and creating value to the services they offer to the consumers, they must consider the key success factor (Sheth and Mittal, 2004). For example, employee’s motivation must be considered by providing bonus and other promotion strategies. For the employees to be committed and work as a team, they must be appreciated by providing bonus so that they feel to be part and parcel of the company. Employee’s development must be taken into account. It is based on the fact that the use of technology is emphasized in this perspective and thus new machines are bought. For the Home Retail Group stakeholders to operate them they must be trained on how to use the machines. The new domestic product must be implemented (Redhead, 2008). This implies that new system that is developed must be run using phased model so that when the system will be implemented fully then individuals must be conversant with it. It is important to introduce other market channels so that the products can advertised to the customers. Through advertising, products are accepted in the market since different advertising strategies are used to create awareness and convince the customers that the product is of high quality. The last importance of scorecard is that it ensures that measures taken by the management to monitor and measure performance have to consider profit and market share. In finance, perspective cash flow must be considered so that the liquid ratio of the company can be monitored and thus be able to assess the credit of Home Retail Group. Asset utilization measures should be considered for example change of inventory should be conducted so that the turnover ratio can be obtained. The sales revenue growth in Home Retail Group should increase by six percent in every three months. The sales revenue can be generated if Home Retail Group can consider targeting of low production cost. It implies that if the company does not have many stakeholders and loss is not incurred during production it will generate profit and thus increasing sales revenue (Raab, 2008). The importance of finance perspective in the company is making sure that profit is generated and the company has a market share and this is the reason it focuses on revenue increase. Profitability in an organization must be considered since without profit it means that the company is either operating in loss or it has maintained the status quo. For the company to compete effectively with the competitors it has to increase the return capital from 10% to 15%. This indicates that growth has taken place in the company and the talented individuals who have contributed to increase in return capital should be retained. References Clagett, L. (2003). The new city home: Smart solutions for metro living. Newtown, CT: Taunton Press. Harper, R., & Randall, D. (2000). Organisational change and retail finance an ethnographic perspective. London: Routledge. Perrey, J., & Spillecke, D. (2011). Retail marketing and branding a definitive guide to maximizing ROI. Chichester, West Sussex, and U.K.: Wiley. Raab, G. (2008). Customer relationship management a global perspective. Aldershot, Hampshire, England: Gower. Redhead, K. (2008). Personal finance and investments: A behavioural finance perspective. London: Routledge. Sheth, J., & Mittal, B. (2004). Customer behavior: A managerial perspective. Mason, Ohio: Thomson/South-Western. Wouters, M. (2012). Cost management: Strategies for business decisions. New York: McGraw-Hill Professional. Read More