Ch_13 - CHAPTER 13 STRATEGY BALANCED SCORECARD AND...

CHAPTER 13
STRATEGY, BALANCED SCORECARD, AND
STRATEGIC PROFITABILITY ANALYSIS
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13-2 The five key forces to consider in industry analysis are: (a) competitors, (b) potential
13-3 Two generic strategies are (1) product differentiation, an organization’s ability to offer
13-4 The four key perspectives in the balanced scorecard are: (1) Financial perspective—this
13-6 A good balanced scorecard design has several features:
1. It tells the story of a company’s strategy by articulating a sequence of cause-and-effect
relationships.
2. It helps to communicate the strategy to all members of the organization by translating the
strategy into a coherent and linked set of understandable and measurable operational
targets.
3. It places strong emphasis on financial objectives and measures in for-profit companies.
Nonfinancial measures are regarded as part of a program to achieve future financial
performance.
4. It limits the number of measures to only those that are critical to the implementation of
strategy.
5. It highlights suboptimal tradeoffs that managers may make when they fail to consider
operational and financial measures together.
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