Strategic Management: Balanced Scorecard - Research Paper Example

 Strategic Management: Balanced Scorecard Strategic planning and management requires businesses and organizations to align their business activities with its mission, vision and the strategy by enhancing the internal and external communications. Achieving the organizations goals therefore require constant monitoring of performance of all the organizational stakeholders. The balance scorecard approach is used by organizations in realizing their strategic goal while looking at the interests of all if not most stakeholders (Pearce & Robinson, 2009). This is opposed to the usual traditional approach where the financial performance was considered in assessing business performance. Balanced scorecard looks at four perspectives of the business: financial perspective, customer perspective,, internal business processes and learning and growth perspective. The Doll beverage company in aiming at responding to customers’ needs in soft drinks and becoming a leading soft drink manufacturer must look into all these perspectives simultaneously. Since Doll Beverage Company is a small company with intention to grow, its managers have to ensure that the financial results promote growth and profitability. In this case, the company will have to analyze their financial data in a timely manner and incorporate the findings in the decision making to ensure shareholders get value for their investment. The three areas that could be checked include: First is increasing its revenue sales to increase its income. Doll Beverage company can have a target if increasing its revenues by 15% each year so that it translates to increased income by about 7%. The value to shareholders will therefore be achieved. Secondly, the growing their market share is also important in enhancing financial perspectives. The fact that the company is still young means that it can increase its operations in both domestic and foreign countries to realize better performance. The management should for instance aim at increasing the market share by 5% every year through opening of new outlets in at five jurisdiction each year. The last premise that could be used in enhancing financial performance is through increasing profitability. Shareholders return is directly related to the level of profitability (Pearce & Robinson, 2009). Doll management should strive at reducing operations cost by 10% through cutting unnecessary costs hence increasing the profitability. Profitability can also be enhanced through improving the company’s efficiency in operations (Pearce & Robinson, 2009). The second perspective of the balanced scorecard is the perspective of the customers. In a competitive industry, customers will be interested in the value for their money through demanding high quality drinks at relatively lower costs. The perspective can be accomplished by ensuring that the customers’ demands and tastes are incorporated in the manufacturing. This is in line with the Dolls beverage mission. The following ways can be used to enhance the customer value perspective: Customer satisfaction- satisfied customers will remain loyal to the business and ensure continued repeat purchase. To satisfy customers’, Doll Beverage must remain committed to the mission of maintaining social dynamics and ensure that the customers’ requirements are considered when manufacturing the soft drinks. Customer satisfaction could result into increased purchases by more than 10% through attraction of new customers from the competitors. New customers could lead to increased profitability by roughly 5% annually. Customer retention- satisfied customers will prefer Doll’s Beverage at any time and this could ensure that the sales levels are maintained. It will also ensure that the competitors do not increase their market share by reducing Doll’s customers. Sales level will remain constant if customers are retained. Moreover, customer value will influence customer satisfaction. Adding customer value means ensuring their tastes and preferences supersede every other thing in manufacturing. Furthermore, the manner in which the customers are handled will also enhance customer value. The third perspective in balances scorecard is the learning and growth perspective. This perspective dwells into the satisfaction of employees and the improvement in the company’s processes (Pearce & Robinson, 2009). The various components of this perspective include: Employee satisfaction- satisfied employees’ leads to motivated work force that is efficient in their operations (Pearce & Robinson, 2009). Doll beverage should increase employees’ remunerations and allowances by about 10% in order to attract qualified workers and motivate the current staff. Technological innovation- through adopting new technology, Doll will increase its output and reduce the costs. At the same time, it will result into improved product quality that will enhance sales and increase the company’s competitiveness. An increase in production quantity by 20% could translate in increased sales by the same amount if marketing strategy is made robust. Organization culture will further determine the learning perspective of the organization. To ensure stability in team performance and employees participation should be encouraged. This would ensure no halt production process and ensure increased employee loyalty to the organization. At the same time, it will lower employee turnover hence could result into an increase in productivity by about 5%. Last perspective of the balanced scorecard is the business processes perspectives. In the manufacturing of the soft drinks, Doll needs to ensure the internal processes are efficient and effective hence reducing wastages by a significant margin. This would be translated in an increase in the profitability. First, performance measures like performance contracts should be introduced to ensure that the employees and business processes meet the set standards and reduce adverse deviations. This can be expected to increase in output by about 15% hence desirable. The level of the firm’s productivity can be measured. This can be on the basis of machine productivity or employee productivity, because of this employees will increase their productivity by more than 5% which would impact positively on the performance. Lastly, operations metrics can also be used in measuring business process effectiveness. Ensuring effective realization of the firms will reduce time wastages, material wastages, and possible breakages in the soft drinks manufacturing. Because of this, costs might be reduced by more than 10% and thus increase performance by an equal margin. In summary, Kaplan and Norton balanced scorecard ensures that all the important stakeholders are integrated in the operations with a bid to realizing organizational mission and vision. Doll’s beverage management should adopt the balanced scorecard in achieving growth and increasing their profitability. Reference Pearce, J.A. & Robinson, R.B. (2009), Strategic Management: Formulation, Implementation, and Control (11th ed.). New York, NY: McGraw-Hill Read More