A balanced score card is a valuable method for analyzing the objectives of a strategic plan. Pro Audio Superstore will be able to use this method as a key component of the strategic plan. There are four main areas of the strategic plan that can be analyzed using a scorecard, which include: Financial, customer, internal business process, and learning and growth. Each of these categories should be measured separately to understand their cause and effect relationship. The analysis starts by defining the objectives in each category, which is followed by benchmark goals and initiatives. The scorecard will list this in a table format and help the organization develop an organized plan for reaching its objectives. Previous outcomes of the SWOTT analysis have a significant influence on the balanced scorecard and will contribute to the overall strategic plan (Pearce 2004). Ultimately, the balanced scorecards will provide Pro Audio Superstore with attainable goals in each of the four areas of the business.
Measures Targets Initiatives Objectives Decrease the weighted average costWACC should be less than 6.0% overThe company should see a quarterlyThis goal can be achieved for of capital WACC the next year decrease in WACC every quarter forseeking out low cost financing the next year. from banks and investors. Lower overall inventory costs Inventory costs should be reducedWe should also notice a decrease Seek both domestic and by 15 – 20% over the next year. in the inventory turnover ratio. international suppliers that offer lower costs. Increase the return on assets Total assets should produce Long term and short-term assets Start using building space more (ROA) ratio. returns that are at least 10% should generate higher returns. efficiently and renting unused higher. areas.
Customer Value Scorecard
Objectives Measures Targets Initiatives Train employees to focus on Employees should be able to Require employees to gain certain Offer tuition assistance to exceptional customer service demonstrate high level of certifications within first year employees who seek technical techniques. technical skills. of employment. certifications. Follow-up with top clients to Customer satisfaction should Music professionals prefer our Conduct in depth marketing build customer loyalty remain high and disputes should bestore over the competition. research about the target resolved quickly. customer. Offer cutting edge technology to New technology should hit stores Offer technology that is new in Build relationships with keep customers interested faster than competitors. domestic and international international equipment markets.
Learning and Growth Scorecard
Objectives Measures Targets Initiatives Promote corporate culture that Obtain an employee retention The company should maintain this Conduct employee surveys to find fosters employee growth. rate of 75% or higher for 6 retention rate for the next two areas of improvement. months. years. Create an equity sharing plan for Allow tenured employees the This program is for long term Present the equity sharing plan as employees opportunity to gain partial management employees. a goal for all employees to ownership. pursue. Participate in community events to Participate in one major Observe increased awareness of theEncourage and reward employees for build a positive image. community event per quarter. company image. participation
Internal Operations Scorecard
Objectives Measures Targets Initiatives Implement a system for tracking Customer habits and loyalty must Track customer tendencies over theSeek the advice of marketing customer habits and loyalty be determined before conducting next 2 years. consultants. marketing operations. Set short-term sales benchmark Short term sales should be within The company should be consistentlyDetermine industry standard goals based on operations metrics 15% of main competitors improving its sales volume. metrics from key competitors. Track the company’s global International exposure should growWebsite traffic can be tracked Investing in web technology to exposure using online analytic at least 20% per year. worldwide using analytic software track and network with customers systems. abroad
Pearce, J. Robinson, R. (2004). Strategic Management: Formulation, Implementation, and Control, 9e. Retrieved on September 28th 2009 from Resource