Winning Strategy 1 Strategy Deployment Plan Overview of BSC Comparison of BSC Policy Deployment Hoshin Kanri amp Business P rocess ReEngineering Overview of organizational Strategy ID: 148111
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Slide1
Team B4
Winning Strategy 1:
Strategy Deployment PlanSlide2
Overview of BSC
Comparison of BSC
,Policy Deployment (Hoshin Kanri) & Business Process Re-EngineeringOverview of organizational StrategyRecommended Deployment of Strategy using BSCSummaryConclusionReferences
ContentsSlide3
Created in 1992 by Kaplan and
Norton
A holistic method of measuring organizational performanceComplements traditional financial assessment methodsBalances short term activities with long term plansFunctions as a strategy deployment tool
Overview of BSCSlide4
BSC is based on four (4) premises:
Finance
Clients Internal Processes; andLearning and Growth BSC PhilosophySlide5
FINANCIAL PERSPECTIVE
Analysis of financial performance (Reports & Ratios)
Determining company financial healthAddresses issues such as profitability, ROCE, sales figures, liquidity, debt figures, etc.CLIENTS PERSPECTIVE Focuses on customers needs Assesses
how
well products
/
services fulfill consumers requirements
Market Segmentation & Customer Surveys Slide6
INTERNAL PROCESSES
C
oncerned with operational activities within the organization Analyzes how efficiently and effectively they function Aims to ensure they work towards attaining organizational
goals
LEARNING
AND GROWTH
PERSPECTIVE
Examines how much
organizational learning occurs within the
company
Concerned with employees growth and skills developmentSlide7
Analysis is done on each perspective
The requirements for each are defined
The cause & effect relationship between them is expressed in a strategic mapHere, organizational goals and objectives, defined action plans and performance indicators selected are reflected.The BSC may be used alongside other strategic development methodologies.HOW DOES THE BALANCED SCORE CARD WORK?Slide8
Pro’s and Con’s of BSC
Pro’s
Con’s
Clarifies and translates vision and strategy.
Communicates and link strategic objectives and measures.
Helps plan, set targets and align initiatives.
Enhances strategy feedback and learning in division
Overly abstract Balanced Scorecard goals are easy to reach but hard to quantify
Implementation of the balanced scorecard is time consuming
Balanced Scorecard does not include direct financial analysis of risk management
Slide9
BSC
HOSHIN KANRI
BPRPerformance measurement system & strategy deployment tool
Strategy deployment tool
A
t
ool for the introduction of radical change
Focuses on cause & effect relationships between strategic objectives
Way of deployment, communication, & execution of strategy
Aims to re-design business processes to improve efficiency and effectiveness
Describes the perspectives to focus upon
Organizational objectives are developed by
employees
through the ‘
catchball
’ process
Encourages organizational communication
through brainstorming sessionsDescribes the perspectives to focus upon All endeavours are aligned to the same vision and goal Involves analysis of risk assessment
COMPARISON OF BSC, HOSHIN KNARI (POLICY DEPLOYMENT) AND BPRSlide10
BSC disadvantages can be mitigated in the following ways;
Combining BSC with a complimentary deployment tool
e.g Hoshin KanriEnsuring that strategic objectives are S.M.A.R.TMaking effort to avoid measure bias. i.e using the same measurement for different objectives
Carrying out analysis of Risk Management
i.e
opportunity cost should be considered
Mitigating the Downside of BSC Slide11
Increase market share in Europe
Actions and costs
Research European market pricing structure, discounts, distribution, competition, product and safety specifications etc. Identify a distributor who could take on the European sales and handle any future expansion of the market. Need new computerized finance package for Euros and to reduce Finance workload (estimated cost £25,000) Identify successful European promotional campaigns and put together a winning promotions strategy. Increase marketing spend to £250k. Increase price of both products by approximately 2.5% (in line with inflation).
Overview of StrategySlide12
Reorganize the Leisure sales team to three external sales representatives and three internal sales people to handle client follow-up by taking on two new salespeople and take on a European sales representative in the Rescue/Military sales team.
Continue to invest in new technology costing an estimated £150k on capital expenditure.
Reorganize Finance and HR departments by moving wages and salaries manager into the Finance department. Reduce the remaining clerical staff in HR to a total of one
Actions and Costs contd.Slide13
To
be the second largest inflatable boat Production Company in Europe in 5 years and start to expand in the U.S. market.
ORGANIZATIONAL VISIONSlide14
RECCOMENDED STRATEGY DEPLOYMENT USING BSC
FINANCE
CLIENTS
INTERNAL PROCESS
LEARNING
OBJECTIVE
OBJECTIVE
OBJECTIVE
OBJECTIVE
Increase R.O.C.E. from 27.05% to 35%
Increase customer satisfaction to 85%
Increase market share to 30% of the European market
Increase Production Capacity by 40%
Reduce overhead costs
By 20%.
Reduce Bureaucracy
Increase the number of training/skill development programs for employee.
To get information regarding the target areas, taste and best market opportunities of U.S. market.
MEASURES
MEASURES
MEASURES
MEASURES
Increased profit figures.
Increase in sales in Europe market
Reduction in inventories.
Customer retention
Customer complaints.
Sales in European Market
Analyzing surveys
Reduction in time taken to approve discounts.
Production figure
Reduction in non-value added activities.
Employee efficiency
Employee productivity
Knowledge base regarding the U.S. market
TARGETS
TARGETS
TARGETS
TARGETS
Increase R.O.C.E. to 30% in first 2 years
Increases R.O.C.E. by 33% in 4 years
Increase European market share to 20% at the end of 3 years.
Get at least 75% of survey forms back from the pool of our customers.
Increase production by 30% at the end of 3 years.
Reduce overhead costs by 10% at the end of 3 years.
Reduce time taken to approve discounts by 75% at he end of 5 years.
Increase employee efficiency by 50%
Increase employee productivity by 50
%
Identify potential distributors in the U.S. market.
INITIATIVES
INITIATIVES
INITIATIVES
INITIATIVES
Identify distributor for European market
Increasing marketing spending to £250 k.
Development European marketing campaigns
Re-organize sales team to handle client service
Increase market spends to £250k.
Carry out surveys.
Restructure organizations departments.
Purchasing financial computer information systems to reduce workload
Invest in new technology
Identify and reduce non-value added activities
Supply chain integration
Increase investment in research activities
Invest in new technology.
Form a team of people to research about the U.S. market. Slide15
The Organizational objectives have been clearly outlined for each perspective
Specific targets were defined
Performance Measures are suggestedThe action steps stated in the strategy were highlighted as initiativesSummarySlide16
The BSC can be efficiently used in the deployment of this selected organizational strategy
It will allow for the clarification
and translation of the company vision As well as provide feedback to enhance the organizational learning processConclusionSlide17
Asan
, S.S &
Tanyas, M (2007) Integrating Hoshin Kanri and the Balanced Scorecard for Strategic Management: The Case of Higher Education. Total Quality
Management,
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1014
Pettus
, M.L (2006)
Utilizing
Capabilities to Increase Stakeholder Wealth: A Balanced Scorecard
Approach.
Competition Forum
,
4
(1) pp. 15Brewer, P., (2003) Putting Strategy Into The Balanced Scorecard. Articles Of Merit 2003 Competition. Pp.1-11Salterio, S. & Webb, A., (2003)The balanced scorecard. CA Magazine, 136 (6) Pp. 3Kaplan, R.S., & Norton, D.P., (1996) Using the balanced scorecard as a strategic management system. Harvard Business Review. Pp. 75-85White, T. (2012) Balanced Scorecard - Advantages and Disadvantage. [Online] http://tamarawilhite.hubpages.com/hub/Balanced-Scorecard-Pros-and-Cons. Access Date: 1st February, 2012.Shin, M & Jamella, D.F (2002) Business process re-Engineering and performance Improvement: The case of chase Manhattan bank, Business Process Management,
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(4). Pp. 351-363
References