Home Retail Group Plc Balanced Score Card & Strategy Map - Case Study Example

Home Retail Group Plc Balanced Score Card & Strategy Map Executive Summary The balanced scorecard was begun by two scholars from Harvard Business School’s by David Norton and Robert Kaplan during the early 1990s. The technique of balanced scorecard retains conventional financial estimates. However financial measures express the store of previous events, a sufficient store for industrial era firms for which investments in strategic skills and consumer connections were not important for effectiveness. These economical measures are insufficient, however, for assessing and guiding the journey that data age firms must make to generate future worth by investment in suppliers, consumers, procedures, employees, innovation and technology. The paper analyses and creates the balanced scorecard and a strategic map for the given organization, the Home Retail Plc in order to understand and evaluate its core business activities and its effectiveness through establishing a balanced scorecard approach. The company’s strategy has been to position its business as a precisely differentiated multi channel home improvement retailer, generating both online and in-store exposure, with a milder, more chic feel and appearance. The paper will evaluate its strategy and vision while elaborating its various core perspectives to develop an overview of its market position and prospect performances. Therefore, creating a balanced scorecard is highly crucial for a business to estimate their effectiveness and to enhance upon their fiascos. If an organization wishes to find procedures they can be effective, they can find their scorecards as these scorecards will express a business or company where they require improvement and progress. Vision & Strategy Home Retail Plc vision is to establish effective businesses that offer exceptional value and ease to its customers, whether people shop at home or on the go. Each of the company’s retail products has its individual precise strategic goals to acquire this vision. During 2012, the company created a five year strategic plan of transformation to reinvent Argos to make it a leader in digital retailing. Home Retail Plc’s strategy has been created with the deliberation of generating long-term value for its stakeholders through offering sustainable growth in its retail product range (Corporate Responsibility Summary 2014, 2014). The balance scorecard assists people to perceive the business in to four various viewpoints: Customer perspective Financial perspective Learning and Growth Perspective Internal business perspective These viewpoints are interconnected and layered thus financial outcomes are defined by consumer satisfaction that are in turn determined through internal procedures and below these three layers, is the basis of the growth and learning viewpoint. The interconnections between these four viewpoints can be seen in strategy maps (Corporate Responsibility Summary 2014, 2014). Performance & Strategy Summary Home Retail Plc aim to offer exceptional worth and ease for its consumers through the function of their two retail products; Homebase and Argos. Consumers are at the core of its business, with more than 180m transactions throughout the year. The company utilize the knowledge that its several consumers offer to add value to its business model. Home Retail Plc is one of the UK’s leading general and home merchandise retailers, offering together two of the most identifiable retail brands in the UK-Homebase and Argos (Henry, 2008). The company source its products both internationally and domestically. The volume of the mutual sourcing synergy of Homebase and Argos permits us to present great value and choice to its consumers. Home Retail Plc has a robust supply chain, which combined with its logistics infrastructure, facilitates the company to offer products for its consumers for either home delivery or store pick up. The company present a huge range of more than 80,000 brands throughout general and home merchandise. The company support its offer of well known brands with a range of own and exclusive products like Bush, Habitat, Chad Valley, Dina, and Alba. Home Retail Plc is a multi channel retailer in that the company offer its consumers a range of easy methods in which they can buy their brands. The company is taking advantage of growth in technology that has brought about a basic and fixed change in the process its consumers shop. The effective mobile and internet channels help make the company a market leader in multi-channel retailing. This is backed up by the national network of more than 1000 stores which offers consumers with domestic pick up points, offering both local and digital leadership existence which the company believe offers us an important competitive edge over the pure play internet rivals. The company’s strategy is based on the following aspects, which help both its vision its business strategies to be accomplished (Homeretailgroup.com, 2015). Convincing consumer offer The company is dedicated to using its scale advantage to source brands for its consumers, facilitating them to present a huge range of products at reasonable prices. The company’s logistics system is focused on a well established infrastructure that facilitates the company to continue to emphasize on enhancing the pace at which brands can be both delivered and sourced to its consumers, through any channel they opt for. In Argos this refers (Jones, 2011): More options available quicker Leverage the current replenishment paths and store network Launch market leading fulfillment ways to complement the proximity of in-store collection. Offer high levels of accessibility to its consumers Creativity of the store exposure, like web based browsers and fast track collection Within Homebase this refers: Rollout of a completely different format of store, offering precise competitive differentiation Introduction of a small Habitat store Reconfiguration of space Augment fulfillment speed and choice Exclusive products and leadership Home retail plc use the strength of its retail products to create leadership in its core market areas through diversifying its product ranges. Having more than 8000 brands throughout Homebase and Argos, the company is always looking for options to present new services and products. In Argos this refers (Homeretailgroup.com, 2015): Diverse ranges to establish both choice and authority Assure competitive value and pricing Reposition product and consumer experiences for universal attraction Strengthen unique brand offer via fewer and cross section brands Improve quality of product and design to fulfill the demands of new consumer sections In Homebase this refers (Homeretailgroup.com, 2015): Create precise points of competitive edge and consumer differentiation Establish and diverse the reach of own and exclusive products Showcase brand displays to assist its consumers with concepts and inspiration Professional suggestion and service both in store and online Digital leadership and accelerating multi-channel The company is taking edge of growth in technology that have caused a basic and core change in the manner consumers buy. Increasingly consumers select to buy online or on the go through mobile gadgets, logically for pick-up in a domestic store however also for home delivery. This multi channel exposure is basic to what the company and is the reason the company has a continuous focus on creating its effective mobile and internet commerce mediums to fulfil this consumer demand. The company will prioritize prospect investment to the multichannel provisions to satisfy its clients in every manner they wish to communicate and buy. The company will remain supporting this with the ease of immediate brand collection through its national store network (Jones, 2011). For Homebase and Argos this refers (Kaplan and Norton, 2013): Establish global international level digital consumer exposures Investment in areas to cause growth in online sales Use the strategic edge of having competitive collection aspects in domestic regions Creativity of the store exposure Change the paper list in Argos to a helping responsibility in the digital presentation, and establish a market-leading digital list Establish large scale consumer data collection, knowledge and customization potentials Develop involving experiences and in-store and online Diverse consumer reach and establish loyalty Financial Perspective The company has offered a better financial outcome during the year and it has sustained its robust financial status (Kaplan and Norton, 2013). According to the company’s chairman, the company has made tremendous progress with its strategic procedures in both business ventures, which will become hugely crucial in a competitive retail context where buying conducts are shifting quickly. Through its online reporting suite, the company always try to make the life of its consumers easier. Home retail group functions with a precise scale advantage obtained from a well established infrastructure which has been created over a phase of several years. Total sales during March 2014 rose by 4.1 percent to £1,489 million (Homeretailgroup.com, 2015). Total space sales shift decreased sales by 1.8 percent with 13 outlets closures decreasing the store range to 323. Like for like sales augmented by 5.9 percent. After a difficult beginning, seasonal brands benefited from the enhanced weather condition during the 2nd quarter of the year, annualizing against adverse weather through the summer in the past year. Huge ticket sales were also ahead of past year, while remaining sections were hugely flat as contrasted to previous year. The rate of gross margin was decreased by almost 100 base points, mainly caused by a poor influence from promotional marketing in the 1st quarter and a poor sales mix influence evolving from the robust outcome of margin dilutive seasonal and huge ticket brands. Combined operating and cost of distribution rose by £9 million, as a consequence of augmented sales, basic cost of investment and inflation in strategic measures partially counteract by more cost saving measures. Benchmark operating profit rose by £7.9 million or 71 percent to £18.9 million (Homeretailgroup.com, 2015). Customer Perspective Homebase has remained to conduct is enhancements in consumer services in a range of fields throughout the year. An effort to enhance procedural competency in stores through reassigning hours from functional jobs into consumer services has been accomplished. After the success of this effort, the new procedures have been executed in more than 70 stores during 2014 and will roll out to the remaining of the estate in 2015 (McIvor, 2006). To check and response to consumer feedback more, Homebase introduced a consumer survey known as paint us a picture throughout the year, which offers Homebase knowledgeable and constructive feedback on all regions of consumer service. After its launch during March 2013, the range of highly happy consumers has gone from 60 percent to 66 percent and innovative format outlets have all confronted important raises in consumer satisfaction post launch. Homebase has a catalogue of nearly 1.7 m dynamic Nectar consumer and a Nectar card is utilized on almost 65 percent of sales. Homebase offered sent almost 37 million direct posting and almost 28 million e-mails in 2014 to cause pertinent deals to consumers. Personally customized coupons declared at point of sales are being tested to drive increased levels of recurring sales (McIvor, 2006). The strategic study that Home Retail Plc conducted in 2011 directed to the growth of sustainability strategies at a product level that resembled with its customers and colleagues. During the year this gave in new measures that brought the company sustainability to life through everyday performances in its business. An instance of this was the Argos Barnado’s Toy Exchange which accumulated recycling, investment and also augmented consumer traffic to its stores. Further measures like this are being established for other regions of its business. The company in touch with its consumers through a huge consumer knowledge procedure. Any consumer can easily offer us opinion online or directly from a smart device and can demand a reply from a store executive within 24 hours (Meyer, 2003). Internal Business The Homebase policy is to place itself as a precisely differentiated multi channel home improvement retailer, generating both online and store exposure, with a softer, more fashionable female friendly preposition. Homebase has conducted an attempt of drastically various store formats, backed up augmented levels of employee service which enables a shopping exposure where consumers locate concepts and inspiration for their gardens and homes. The in-store exposure is helped by an improved multi-channel present which enhances brand accessibility and a website which presents offers data, advice, and motivation. Homebase has established a robust range of unique products such as Laura Ashley, Habitat, Schreiber and Qualcast and Odina, which has offered it a precise point of consumer differentiation as well as competitive edge. This will advance the growth of Homebase as a location for larger range of garden and home projects, preventing a larger portion of consumer investment and an increased frequency of visit (Niven, 2010). Learning & Development Even though there are indications that economic situations are beginning to enhance, with recent catalogues of lessening in inflation, augmentations in employment and enhancing levels of customer conviction, the Group will remain to assume a subdued customer context until the revival is more hugely based. The group has created effective advancement so far with its strategic procedures, which its economical performance has initiated to interpret. Even though, the procedures are multi-layer and they are untimely in their growth. Several of the crucial mechanisms skills, new consumer propositions and augmented financial predictions present, and the Group cannot add up on external aspects to cause the business ahead. The company has a robust financial status, which will facilitate it to invest in the Argos Transformation procedure to reinvent it as a digital leader in retailing, as well as in the Homebase Renewal procedure. Overall the Group is effectively placed for the prospect (Niven, 2010). Using Balanced Scorecard to Measure Performance The balanced scorecard concept requires need not implement only at the level of organization. A balanced approach to worker performance appraisal is a successful manner of getting an entire look at a workers’ work outcome, not merely a partial perception. Mostly, employee outcome plans with their components and paradigms measure conducts, activities, or procedures without also estimating the outcomes of worker’s performance. Through estimating merely conducts or activities in employee performance procedures, a company might find that the majority of its workers are applauded as exception exceptional when the company as a whole has failed to fulfil its aims. Through utilizing balanced estimates at the company level, and through sharing the outcomes with executives, groups and workers, executives are offering the data required to adjust worker performance procedures with organizational objectives (Wiersema, 2006). Through balancing the estimations utilized in employee performance procedures, the performance image becomes complete. Homebase is a leading home improvement retailer and presents an increasing range of home improvement brands in a differentiated store context. Homebase is advancing with its Renewable procedure, which integrates store format growth, an improved multi channel deal, exclusive products and augmented levels of consumer services. This manner the company can adopt and execute training plans to assist both management as well as the employees to excel and enhance overall performance of the business. These scorecards will also express where the advancements require to be conducted and it will also express the effectiveness of the company. Balance scorecards can be placed on every worker and then their outcome can be estimated against others. This will express the worker the regions where they have showed improvement and progress on and the regions that they still require excelling on (Kaplan and Norton, 1996). References Corporate Responsibility Summary 2014. (2014). 1st ed. [ebook] Home Retail Group. Available at: http://www.homeretailgroup.com/media/197576/home_retail_group_cr_summary_report_2014.pdf [Accessed 17 Mar. 2015]. Henry, A. (2008). Understanding Strategic Management. Oxford University Press. Homeretailgroup.com, (2015). Home - Home Retail Group - Annual Report 2014. [online] Available at: http://www.homeretailgroup.com/ar/2014/ [Accessed 17 Mar. 2015]. Homeretailgroup.com, (2015). Home Retail Group - Financial Services. [online] Available at: http://www.homeretailgroup.com/our-businesses/financial-services/ [Accessed 17 Mar. 2015]. Jones, P. (2011). Strategy Mapping for Learning Organizations. Grower Publishing. Kaplan, R. and Norton, D. (1996). The Balanced Scorecard: Translating Strategy Into Action. USA: Harvard Business, pp.9-20. Kaplan, R. and Norton, D. (2013). The Strategy-Focused Organization. Harvard Business Press. McIvor, R. (2006). The Outsourcing Process: Strategies for Evaluation and Management. Cambridge Press, p.137. Meyer, M. (2003). Rethinking Performance Measurement: Beyond the Balanced Scorecard. Cambridge University Press. Niven, P. (2010). Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results. John Wiley, p.119. Wiersema, W. (2006). Manufacturing, Distribution and Retail Guide. CCH. Read More