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Unformatted text preview: CHAPTER 13 STRATEGY, BALANCED SCORECARD, AND STRATEGIC PROFITABILITY ANALYSIS 13-16 (15 min.) Balanced scorecard. 1. La Quintas 2009 strategy is a cost leadership strategy. La Quinta plans to grow by producing high-quality boxes at a low cost delivered to customers in a timely manner. La Quintas boxes are not differentiated, and there are many other manufacturers who produce similar boxes. To succeed, La Quinta must produce high-quality boxes at lower costs relative to competitors through productivity and efficiency improvements. 2. Solution Exhibit 13-16A shows the customer preference map for corrugated boxes for La Quinta and Mesa on price, timeliness, quality and design. SOLUTION EXHIBIT 13-16A Customer Preference Map for Corrugated Boxes 3. Measures that we would expect to see on a La Quintas balanced scorecard for 2009 are Financial Perspective (1) Operating income from productivity gain, (2) operating income from growth, (3) cost reductions in key areas. These measures evaluate whether La Quinta has successfully reduced costs and generated growth through cost leadership. 13-1 Customer Perspective (1) Market share in corrugated boxes market, (2) new customers, (3) customer satisfaction index. The logic is that improvements in these customer measures are leading indicators of whether La Quintas cost leadership strategy is succeeding with its customers and helping it to achieve superior financial performance. Internal Business Process Perspective (1) Productivity, (2) order delivery time, (3) on-time delivery, (4) number of major process improvements. Improvements in these measures are key drivers of achieving cost leadership and are expected to lead to more satisfied customers and in turn to superior financial performance Learning and Growth Perspective (1) Percentage of employees trained in process and quality management, (2) employee satisfaction. Improvements in these measures aim to improve La Quintas ability to achieve cost leadership and have a cause-and-effect relationship with improvements in internal business processes, which in turn lead to customer satisfaction and financial performance. Solution Exhibit 13-16B presents the strategy for La Quinta for 2009. SOLUTION EXHIBIT 13-16B Strategy Map for La Quinta for 2009 FINANCIAL PERSPECTIVE CUSTOMER PERSEPCTIVE INTERNAL- BUSINESS- PROCESS PERSEPCTIVE LEARNING-AND- GROWTH PERSEPCTIVE Operating income from growth Operating income from productivity gain Cost reduction in key areas Customer satisfaction Number of new customers Market share in corrugated boxes market Productivity Quality Number of major improvements in manufacturing process Employee- satisfaction ratings Percentage of employees trained in process and quality management On-time delivery 13-18 (20 min.) Strategy, balanced scorecard, merchandising operation....
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This document was uploaded on 12/11/2009.
- Spring '09