Management Decision Making
Your group is asked by a consulting firm – ‘We will make your business great again’- to design a strategic management tool for a business specialising in retailing home improvement and outdoor living products called – ‘The Business’.
‘The Business’ was recently acquired by the grocery and liquor retail chain, traded on the Australian Stock Exchange. Though part of the group, ‘The Business’ will operate as a separate company where the management will be responsible for all decisions in relation to the types of products being sold, the expansion and other activities of carrying on the business.
Currently, the business owns 23 stores, mainly in Victoria, New South Wales and Queensland. The parent company will make a financial commitment of $500,000 to improve existing and to open 5 more new stores in the next 2 years.
You were told that though ‘The Business’ made A$1 billion in sales last year, its operating income was nil, and the new operators need to improve the operation of ‘The Business’. Their 5 year goals for ‘The Business’ are:
- Increase sales every year to reach at least A$5 billion in five years or sooner
- Achieve positive operating income with the Return on Sales of 15%
- Increase market share to at least 11% in five years or sooner
After a quick visit to a number of stores owned by ‘The Business’ you concluded that stores offer poor range, out of season products. Furthermore, many of the products were more expensive than the competitors.
Stores are rather dark and lacking an appropriate signage resulting in wasting a lot of time just to find a product which had its price tag missing. Floor Staff are very scarce so it is difficult to find a staff member to help and if there was someone available, they usually had very little knowledge about the products. The usual statement was that they have been transferred from another store
You also observed long queues in front of checkouts and people complaining about mistakes. There was no one to help an elderly lady to carry a plant to her car.
You decided that a balanced scorecard approach with its cause-and-effect links between the perspectives would be an appropriate strategic management tool for ‘The Business’.
Required:
- Explain what the Balance Scorecard is and how it could promote goal congruence
2.
Design a balanced scorecard for ‘The Business’ that will promote goal congruence. You must link your balanced scorecard measures and targets with a vision, mission, objectives and strategies that you develop
3.
Draw a strategy map
4.
Discuss why you chose the particular measures that you chose, and explain how they will deliver strategic outcomes for ‘The Business’
5.
Evaluate how your Balanced Scorecard will promote goal congruence for ‘The Business’
6.
Perform a SWOT analysis for ‘The Business’
Some key financial data:
|
Revenue (A$m) |
1,000 |
|
Earnings before Interest and tax (A$m) |
0 |
|
Operating assets (A$m) |
600 |
|
Return on Investment |
0 |
|
Required Rate of Return |
12% |
The objective of this assessment is to display your group’s knowledge and understanding of the Balanced Scorecard as a strategic planning and management system and how to adopt it within a business environment.
FORMAT
There is no specific format for this assignment but it must be professionally presented.
The assignment should contain appropriate referencing using the Swinburne Harvard System (the guidelines are available in the library). References to online sources should provide direct links to the source in the bibliography.
The body of the assignment should be 4000 words (plus/minus 10 percent) including tables and graphs and diagrams. Please provide a word count on the cover sheet or on the first page of the report. Assignments in excess of the allowable word limit will be returned for correction.
