Category: Business 11471

Introduction

In the present day, rapid technological development has made it necessary for large business companies to change the ways their factories work. Technologies such as automation, 5G, and Blockchain have made it clear to corporate leaders that they need to adopt some of them if they want to optimize their factories capabilities. Henkel, too, faces the need to decide on the adoption of new technology. In the present report, the analyst deals with the possible change in the case of Henkel and its history of technological development.

Findings and Discussion

Henkels first innovation dates back to 1876, when they released their first product in packets unseen before. Many years later, digital supply chain strategy, as well as the 5th generation cloud computing with its benefits of offloading to the cloud (Mehrabi et al., 2021), ensured Henkels dominance on the market. Cloud computing included a digital twin of sustainability on machine granularity, which Henkel builds along the entire value chain (Hinterhuber, 2022). Digital twins are the foundation of a smart factory and can be useful for cyber-security (Bécue et al., 2020; Scherrenbacher, 2019). Thus, Henkel has been an innovator since its inception and is using modern technologies today.

Henkels more recent technological development started in 2011, with the Energy Management certification process. Its purpose was to give information such as energy consumption to workers, so they could enhance energy consumption efficiency while democratizing the industry (Burnett & Lisk, 2019). For IT, Wonderware technology was implemented, able to create a human-machine interface (Mulyana et al., 2019). In 2017, Henkel first tested drones and Automated Guided Vehicles (AGV). AGVs functions are unloading trucks, picking cargo, or working as assembly lines (Patricio & Mendes, 2020). In 2018, Henkel has chosen FourKites as the global provider. Therefore, Henkels technological development has been rapid, making the company modern and competitive in many fields.

In 2017, Henkel started keeping all of its information in a data lake. It allowed Henkel to analyze data in different domains: descriptive analytics, predictive analytics, and prescriptive analysis. These technological developments required corresponding know-how from the employees, causing the appearance of systematic online tutorials and a global upskilling program. Thus, Henkels technological advancement has led to some measures such as storing data and training personnel for digital transformation.

In the end, Dirk Holbach opts not to input too many innovations at once, as this can overload the employees. The analysis of AI systems can make complex industrial systems understandable (Daugherty & Wilson, 2018). Blockchain influences supply chain capabilities such as integration, coordination, and collaboration (Nandi et al., 2020). Meanwhile, 5G enables flexibility in managing network resources and cases (Walia et al., 2019).

If analyzed via Porters five forces principle, Henkel demonstrates strong positions in competition in the industry, being in the business for many years and adopting new technology constantly. The power of the customers force is taken care of too, with the company investing funds into communication with clients. The power of suppliers is limited, as Henkel has many of them. The weakest position Henkel currently has is in the threat of substitute products force, as there are other large companies able to offer similar products. However, the upside to this later position is that, due to large companies existing in the business, the potential of new entrants into the industry is low. Therefore, Henkels positions are generally strong, with the only threat being the long-established competition.

Conclusion

Thus, Henkel follows a strategy of slow change via modernization, putting emphasis on the need for pre-trained personnel. Certain measures have to be taken so that the factory works as intended. The nature of the planned change can be viewed as the right one, with digital twins and automation being the standard of work in the present day. As the present report concerns technology at factories, which are the main actors of the economy, it is valuable not just for Henkel, but for other companies trying to establish a business as well.

References

Bécue, A., Maia, E., Feeken, L., Borchers, P., & Praça, I. (2020). A new concept of digital twin supporting optimization and resilience of factories of the future. Applied Sciences, 10(13), 4482.

Burnett, J. R., & Lisk, T. C. (2019). The Future of Employee Engagement: Real-Time Monitoring and Digital Tools for Engaging a Workforce. International Studies of Management & Organization, 49(1), 108119.

Daugherty, P. R., & Wilson, H. J. (2018). Book highlight-The self-aware factory floor: AI in production, supply chain, and distribution. Global Business and Organizational Excellence, 38(1), 5360.

Hinterhuber, A. (2022). Digital transformation, the Holy Grail, and the disruption of business models: An interview with Michael Nilles. Business Horizons, 65(3), 261265.

Mehrabi, M., Giacaman, N., & Sinnen, O. (2021). Unified programming concepts for unobtrusive integration of cloud-based and local parallel computing. Future Generation Computer Systems, 115, 700719.

Mulyana, T., Ibrahim, R., & Abd Rahim, E. (2019). Human Machine Interface Design Analysis of Defect Detection Prototype by Wonderware InTouch Software. Journal of Physics: Conference Series, 1150, 012034.

Nandi, M. L., Nandi, S., Moya, H., & Kaynak, H. (2020). Blockchain technology-enabled supply chain systems and supply chain performance: a resource-based view. Supply Chain Management: An International Journal, 25(6), 841862.

Patricio, R., & Mendes, A. (2020). Consumption Patterns and the Advent of Automated Guided Vehicles, and the Trends for Automated Guided Vehicles. Current Robotics Reports, 1(3), 145149.

Scherrenbacher, S. (2019). No Smart Factories without a Digital Twin. ATZproduction Worldwide, 6(4), 3639.

Walia, J. S., Hämmäinen, H., Kilkki, K., & Yrjölä, S. (2019). 5G network slicing strategies for a smart factory. Computers in Industry, 111, 108120.

Product and Problem Statement

New Balance is a US privately owned multi-national company that designs and produces athletic footwear, apparel, and accessories for fitness and multiple athletic activities such as team sports, running, training, tennis, light walking, as well as casual and lifestyle wear. Formed in 1906, the company has more than 100 years of experience in its industry. It is viewed as one of the largest privately owned apparel and athletic footwear business in the United States and across the world (New Balance, 2012).

The company makes its products in the US, China, and the UK. It is indeed the only major shoes company to have production in the United States (Kozar & Hiller, 2013). It produces 25% of its products in the United States while the rest of the commodities are produced in China and the United Kingdom (Yang, 2015). The company has more than 4100 employees. It attained revenues of $3.3 billion as of 2014. The company is headquartered in Boston, Massachusetts.

The apparel and athletic footwear industry is highly competitive. It is dominated by other major corporations such as Nike, Adidas, and Puma among others. Therefore, it is important for organizations such as New Balance to be innovative in designing and marketing their products. Innovativeness is the key driver in the industry. Companies must strive to ensure that their products meet clients expectations while at the same time adhering to safety requirements (Kozar & Hiller, 2013). In recognition of the above requirements, the company is keen on innovating and introducing new products that meet the current demands and safety requirements of many sports people while at the same time ensuring that it remains competitive and successful in its operations.

For instance, the introduction of the Mens 611 running shoes is an important addition to the companys product portfolio that targets male athletes in both armature and professional sporting activities. However, the product has had mixed results and reception in the market. Therefore, it is important to implement a good marketing plan, which will drive the new product to achieve the success that the company envisions.

Justification of the Marketing Plan

The marketing plan provides important guidelines that allow a companys marketing efforts to translate into sales that can bring success to the organization (Kozar & Hiller, 2013). A good marketing plan considers many factors such as competition, pricing, positioning, and branding, analysis of the target market, market research (trends), marketing strategies, and monitoring and evaluation of marketing efforts (Franklin, 2011).

The current marketing plan focuses on identifying the strategies and approaches that can be used by New Balance to move the Mens 611 running shoes in its markets across the world. The marketing plan will help the company to identify external environmental factors, competition trends, and customer preferences that will guarantee success of New Balances product.

Situation Analysis

External Environment Analysis

The external environmental factors in a business environment are important in determining the competition of an organization and products. In the apparel and athletic footwear industry, external environment factors play an important role in determining the competitiveness of New Balance Mens 611 running shoes. The following PEST analysis provides an external environmental analysis for the company:

Competitor Analysis

Competitor analysis provides an important tool for comparing an organization or a business with its competitors in the market (Kozar & Hiller, 2013). For instance, New Balance operates in an industry that is dominated by multi-national corporations such as Adidas, Nike, and Puma among others (Cui, 2014). The analysis will use Adidas and Nike as the major competitors of New Balance to provide important insights into the competition, thus proving recommendations that New Balance can use to market its shoes.

Firstly, Nike and Adidas are the worlds largest athletic shoe companies. In this case, they have significant financial strength that can allow them to produce and market their products with ease and competitively. For instance, Nike had an annual income of $25 billion as of 2013 while Adidas attained $15 billion in the same period. Compared to New Balances $3.3 billion, it is evident that the company is not financially competitive as compared to its major competitors (Yang, 2015).

Secondly, Nike and Adidas have a higher brand identity and recognition and hence their bigger success. For instance, the companies are major sponsors of many sports people and teams across the world (Kozar & Hiller, 2013). Although New Balance sponsors various teams and sports persons, its efforts are concentrated on low tier team and personalities since major apparel makers in the industry such as Nike and Adidas among others already have taken the major teams.

Thirdly, New Balance makes a substantial number of its products in costly manufacturing areas such as the UK and the USA as compared to Nike and Adidas whose products are made in China where there is cheaper labor and lower manufacturing costs (Yang, 2015). In essence, the lower manufacturing costs in offshore locations such as China allow Adidas and Nike to have cheaper products as compared to New Balance whose high manufacturing costs have forced its products to be among the most expensive.

Lastly, the financial muscles and brand identity of Nike and Adidas have allowed the companies to run major marketing campaigns that New Balance cannot manage. Such marketing campaigns have allowed the two companies to dominate in nearly all areas of sporting activities to the disadvantage of smaller organizations such as New Balance.

Customer Environment Analysis

Customer Analysis

Mens 611 running shoes target both professional and armature athletes. However, their pricing means that they are majorly accessible to those who can afford the more-than-$60-a-pair price tag on them. In essence, due to the pricing, the shoes target professional athletes, thus attracting steep competition from other companies in the sector (Kozar & Hiller, 2013). Therefore, it is a highly competitive target for the company and thus the need for major marketing strategies and approach that will allow the shoes to be a success in the market.

Internal Environment Analysis

As a private organization, New Balances internal operations are highly protected since the company does not have the obligations that are imposed on publicly owned companies (Yang, 2015). However, the companys considerable financial successes are important indicators of the appropriateness of its management team. Its lean number of employees is appropriate for its size, thus showing that the company operates to maximize profits while reducing the expenses (Kozar & Hiller, 2013).

However, the fact that the company still has manufacturing operations in the United States and the UK shows poor decision-making in the quest of maximizing profits. Such operations are to blame for the high cost of its products that have limited the companys ability to reach mass markets and brand identity.

Company Analysis

A company analysis is very important in determining the financial and competitive position of a business. For instance, a company analysis of New Balance reveals that the businesss profitability has been on a rising trend from 2010 when it had revenues of $1.8 billion to $ 3.3 billion in 2014. Appendix 1 shows the companys financial records.

Conclusion

From the analysis above, it is evident that the company operates in a highly competitive market that is dominated by other major players such as Adidas and Nike. As such, the entry of New Balance Mens 611 running shoes into a highly competitive region requires the company to put in place measures, which will address its competitive weaknesses that have been identified in the analysis. For instance, it is highly recommendable for the company to reduce production costs that have affected the companys ability to price its new products competitively. Once this recommendation is implemented, the company will be assured of beating its competitors as discussed above.

Reference List

Cui, L. (2014). Analysis on sports shoes design under the guidance of the green design concept. Applied Mechanics and Materials, 3(440), 379-382. Web.

Franklin, D. (2011). League parity: bringing back unlicensed competition in the sports fan apparel market. Chi.-Kent, 86(2), 987-990. Web.

Kozar, J., & Hiller, C. (2013). Socially and environmentally responsible apparel consumption: knowledge, attitudes, and behaviors. Social responsibility journal, 9(2), 315-324. Web.

New Balance. (2012). New Balance responsible leadership report. Boston, MT: New Balance. Web.

Yang, T. (2015). Localization of New Balance brand marketing strategy for Chinese markets. New York, NY: MacMillan. Web.

Introduction

Even though toy firms have done well in the global economic setting, most people disregard them. Mattel is one of the toy businesses that have done well in todays financial atmosphere. Harold Mattson and Elliot 1945 established the firm, which has since grown to become the second-largest toy manufacturer. Mattels merchandise is now readily available throughout Europe and the sphere. The company is primarily known as a toy manufacturing juggernaut, with Barbie dolls being its most famous and recognizable brand. Because of its inventive approach, Mattels supply chain management (SCM) methodology has been recognized as the most crucial tool for improving its commodities abroad.

Drivers the Mattel Company Needs to Implement to Maintain a Sustainable Supply Chain

To improve its supply chain, Mattel has to first reduce costs, which is one of the possible drivers for the globalization of its supply chain strategy. International demand will rise as a result, and there will be fierce competition from low-cost businesses. The cost-cutting strategies aid in the clearance process, generating earnings. Second, technology is developing more quickly in the toy industry (Mangan and Lalwani 2019). Several technologically focused toys assist youngsters in building their social and neurological skills and numerous coping mechanisms that benefit brain development.

Third, diversified and shifting consumer demand  The global toy industry has significantly transformed due to shifting consumer demand and behavior. Numerous overseas marketplaces have seen a wide variety of client demand. To get around this, Mattel has to thoroughly analyze the market, taking into account current trends, historical growth patterns, and other development factors (Shah and Ganji, 2017). Fourth, due to growing customer awareness of plastics harmful effects on the environment and human health, toy manufacturers are under a lot of ethical and green pressure. Parents struggle with whether or not to offer their children plastic toys. Because toys account for 90% of plastic consumption, toy manufacturers are under enormous pressure (Shah and Ganji, 2017). Companies are employing toys free of BPA and very little or recycled plastic to use less plastic. Mattel should also use biodegradable materials for product packaging.

Effectiveness of the Lean System Adopted By the Company

A supply chain that operates at maximum efficiency is said to be lean. It does it with the least amount of possible loss and waste while preserving enough flexibility to account for unanticipated delays. The lean system aids in removing unnecessary or value-less tasks from the supply chains (Ntabe, 2020). Lean manufacturing may reduce waste inside a facility, arguably its most significant advantage. This method removes old or obsolete goods, which businesses hold onto in large quantities together with garbage. The technique lowers operating costs while simultaneously minimizing trash and waste generation.

Lean production approaches establish processes and help Mantels personnel gain skills to support variations in the workplace that new trades produce, going beyond just dropping prices and increasing efficiency. Creating work rapidly, in small iterations, wirelessly, and delivering it on schedule increases Mantels competitive edge. Longer lead times are not a problem in large volume, predictable demand businesses where lean supply works well (Jeffery, M., et al 2017). In a dynamic, specialist sector that is constantly changing, poor supply is less adequate s (Ntabe, 2020). The potential downside risks are pretty significant if best practices, like TQM and collaboration between enterprises, are not established, as Mattel has discovered to its cost.

Do You Think The Firm Is Comprehensively Employing The Lean Strategy?

The aim of a corporation using the lean manufacturing method is efficiency. Lean manufacturing is based on minimizing resource wastage while increasing production. Mattel has only sometimes had great success with this strategy. Early in the new millennium, Mattel outsourced its manufacturing to firms in China. Mattel was impacted when numerous Chinese manufacturers were shut down for utilizing lead paint in their goods in 2007 (Collier and Sarkis, 2021). Due to this, Mattel had to issue some recalls, particularly for their perennially popular Barbie brand.

Supply Chain Strategy and Design of Mattel

Due to the cutting-edge approach involved, Mattels supply chain management (SCM) model to improve its products internationally has been regarded as the critical method. Forecasting, collaborative planning, and replenishment are some of the main pillars of Mattels supply chain management (Collier and Sarkis, 2021). By reducing the number of records needed for the associates to work with supply chain organizations and allowing flattening out the expenses incurred by dealers and vendors, the company has been forming ties with other businesses.

Ways in Which Current Strategy Can Be Greatly Improved

When Mattel increases productivity in the right business areas, it might significantly expand its services. The current strategy can be greatly improved using five essential components. The first involves efficiently organizing the manufacturing process and determining the new capacities for implementing new toys in their working structure (Zhou, 2018). The results of the industrys total earnings are greatly influenced by sourcing. The surgery is made in another way. The best method for improving the organizations overall serviceability would be to produce certain toys when needed (Vijayvargiya, Thakkar, and Agarwal, 2017).

A reliable logistics network must be built to deliver goods. Growing environmental adaptability enhances the potential for such a planning procedure to produce better results. The final step of the surgery is the return. Returning defective goods is essential to this strategy because it increases the likelihood of forging cooperative relationships with suppliers in reports of business maneuvers.

Current Outsourcing Strategy of Mattel the Consequences of Outsourcing or Producing In-House

Outsourcing is the procedure of selling out company operations and methods to third-party agencies. Offshoring may provide significant benefits ranging from reduction of prices and better effectiveness to a deeper strategic benefit. A potential financial risk, on the other hand, is typically the erosion of authority over the contractual activity (Maraesa, 2019). Mattel should carefully assess the pros and downsides of sourcing before deciding to transfer any operations or corporate operations. Strategic sourcing may allow a firm to focus on its strengths by allowing staff to focus on their principal duties and long-term plans (Arya & Ramanan, 2022). By picking an outsourcing firm that specializes in the operation that the company needs them to execute, an enterprise may obtain more efficient, faster, and often higher-value services.

Mattel is the parent company of well-known trademarks such as Barbie, Power Wheels, Fisher-price and Compact (Islam & Al-Mamun, 2021). Mattel adopted offshoring as a key instrument in value cycle administration, with China emerging as a preferred location. Nevertheless, on November 15, 2009, Mattel canceled almost 5,020,231 toys made in China (Rangaswamy et al., 2018). This was the companys second biggest recall of toys with excessive levels of mercury. Mattel banned 30 million items made in China multiple times in less than two weeks.

Despite having a comprehensive evaluation and monitoring method in place at several of its facilities in China, the firm could not prevent a major fraud. Mattel took several steps to repair the harm, but it needed to be explored whether it could reclaim the faith of its customers. Mattels production is outsourced to Jakarta, Singapore, Bangkok, Guatemala, Scotland, and China. Mattels outsourcing is concentrated in Beijing, which contributes 68% of total output. Mattel has one plant in the U. S. and one in Belfast, with further reprimanding in Argentina and Asian countries.

Mattel utilizes in-house production plants for over half of their production, which is relatively high when contrasted to Mattel, which utilizes nearly little in-house manufacturing. The 50% generated by non-Mattel operated facilities is obliged to function under the suppliers operation. This is to stay up with the ever toy industry, which has a one year life cycle or shorter. Mattel sells useful and creative items that they primarily provide to the United States (33%), Germany (25%), and China (29%), with Asia and European countries on the rise.

Supply Chain Risks Inherent in Mattels Supply Chain and Its Solution

While corporations are gradually embracing domestic or specialized manufacturing processes for finished products, the buying of many important raw materials are highly internationalized. As a consequence, the distribution of certain important goods is vulnerable to widespread disruption caused by surges in need or factory bottlenecks (Scott & Scott, 2018). Plastics producers around Europe cautioned of imminent serious limitations of specific polymeric substances, which are utilized in the manufacturing of sophisticated plastic elements such as automotive parts, by the close of 2017.

To deal with this particular issue, one can advise that Mattel reassess its business ethics. Even though the procedure of rethinking the method to supply recovery has actually begun, the organization risks faltering again if the present ethical grounds are not changed. As a result, it is recommended that the notion of business ethical obligation be incorporated into Mattels SCM architecture (Moons, 2018). CSR is commonly defined as a schedule of measures to decrease externalized expenses or to prevent differential tensions. It encourages a more appropriate way to handling ethical quandaries, such as the decision between a lower raw resources and consumer wellness

Strong connections with vendors, producers, transporters, and other third organizations are critical to supply chain success. Although conventions and service standards will regulate the connection, strong day-to-day connection maintenance will generate trust and assist the Mattel company in handling challenges (Dubey, 2018). A sustainable logistic chain requires backup strategies and mitigation steps. Include backup vendors and producers, alternative logistical options, extra storage facilities, and equivalent economic resilience planning throughout the logistics system (Momenitabar et al., 2022). Assess distribution network risks based on probability and effect, and anticipate for disastrous situations.

The organization of the supply chain management structure also demonstrates that Mattel could benefit from better techniques for aligning its sustainable supply chain with the remainder of the business configuration. As a result, the present SCM plan demonstrates that there is a direct relationship between the management style, moral norms, and real success inside the SCM structure (Mitchell, 2021). Nevertheless, Mattel is currently recuperating from the devastating impacts of the 2009 debacle, and the present vendors with whom the company works produce subpar results.

Conclusion

Mattel held the condition intensely and was unsurprised by the concern. Merchandise faults and dealer troubles are common in their daily procedures since they have previously dealt with similar challenges. Mattes employs both domestic and foreign suppliers to foresee and avoid future problems. Mattel took full responsibility for the whole recall when no factory was willing to be held accountable. It requires courage to own up, and activities should represent the establishments personality in good and bad times. Mattel must try hard to solve any difficulties, adhere to quality standards while producing toys, prompt customers that the lowest line is kid protection and product shield, and partner with global corporations.

Reference List

Arya, A. and Ramanan, R. (2022) Long term firm gains from short term managerial focus: Myopia and voluntary disclosures, SRN Electronic Journal, 45(6) PP.633-675.

Collier, Z.A. and Sarkis, J., (2021) The zero trust supply chain: Managing supply chain risk in the absence of trust, International Journal of Production Research, 7(35) pp.1-16.

Dubey, S. (2018) Sustainable maintenance in drilling operations: New risks, changing standards and codes, 5(6) PP. 65-79.

Islam, M.T. and Al-Mamun, M.J. (2021) Protection of unregistered well-known trademarks: The Bangladeshi trademarks regime revisited, SSRN Electronic Journal, 8(6) pp. 860-895.

Jeffery, M., et al (2017) Supply chain outsourcing at DB Toys,Kellogg School of Management Cases, 5(9) pp.65-86.

Mangan, J. and Lalwani, C., (2019) Global logistics and supply chain management, 35(7) pp.65-79.

Maraesa, A. (2019) A competition over Reproductive Authority: Risk, Reproduction, and Narratives of Experience, 25(6) pp. 211230.

Mitchell, S. (2021) Group SCM sessions, Structured Clinical Management (SCM) for Personality Disorder, 5(35) pp. 6984.

Momenitabar, M. et al. (2022) Designing a sustainable closed-loop supply chain network considering lateral resupply and backup suppliers using Fuzzy Inference System, Environment, Development and Sustainability, 49(25) pp. 69-78.

Moons, N. (2018) From obligation of means to obligation of result? The Right to Housing in Law and Society, 8(33) pp. 137155.

Ntabe, E.N., (2020) A SCOR-based process modeling approach for green performance evaluation of forestry systems, 5(35), pp. 56-95.

Rangaswamy, J., Kumar, T. and Bhalla, K. (2018) A comprehensive life-cycle assessment of locally oriented small-scale toy industries: A study of traditional Channapatna toys as against low-cost PVC (poly-vinyl chloride) toys made in China, Procedia CIRP, 69(9) pp. 487492.

Scott, J. and Scott, C. (2018) Human babesiosis caused by Babesia Duncani has widespread distribution across Canada, Healthcare, 6(2), pp.49-65.

Shah, S.R. and Ganji, E.N., (2017) Lean production and supply chain innovation in baked foods supplier to improve performance, British Food Journal, 62(4), pp.500-525.

Vijayvargiya, L., Thakkar, J. and Agarwal, G., (2017) Green supply chain management practices and performance, Journal of Manufacturing Technology Management, 295(5), pp.795-824.

Zhou, B., (2018) Lean principles, practices, and impacts: a study on small and medium-sized enterprises (SMEs), Annals of Operations Research, 241(1), pp.457-474.

Introduction

Tesco plc is an international company that deals with general merchandising and grocery. The company is located in United Kingdom (UK) and it has been ranked as the third-largest merchant in the globe, after Carrefour and Wal-Mart. Tesco has the leading market share in UK (approximate 30%) and it has been measured as the second largest retailer in terms of profits, after Wal-Mart (Aaker and McLoughlin, 2010). All these successfulness factors have been contributed by various marketing strategies, such as diversification (the company has various stores across Europe, Asia and America), advertising, branding and many more (Humby, Hunt. and Philips, 2007).

In recent times, Tesco plc came out with new strong marketing strategy that will boost its productivity further. This new strategy is product life cycle (PLC). The company has achieved to do this, by collaborating with ethical clothing pioneers. The PLC involves four stages, which are introduction, growth, maturity and decline stage. Below is a graph that shows all stages:

Introduction Stage

This is a stage when the merchandise is launched in the market. Tesco introduced recycled clothing collection, but during this juncture, the sales of these merchandises were low until consumers became aware of these products and their features. Due to its worldwide recognition, the company used only few marketing strategies to create awareness to the consumers. The only marketing strategies were used are advertising and branding. However, seeing as this is the first stage that the merchandise is endeavoring to pull off its foothold in the market, it necessitated extra cost (like distribution, etc), in order to establish unyielding market operations (Humby, Hunt. and Philips, 2007).

Growth Stage

In this stage, more customers become aware of the merchandise and its features. Tesco exploited this stage, by adding more merchandise into the market, hence increasing its sales output. Although, at this stage, the sale output is not at the pick, the company increased its market volume in order to gain consumer tendency and later on, increase the sales. The retail industry is very competitive; consequently, Tesco decided to add additional cost in the promotion of the new recycled clothing collection. This enabled the company to compete against other players in the stiff market and creating more awareness to the consumers (Humby, Hunt and Philips, 2007).

Maturity Stage

At this stage, the sales gradually increase, even though it is at a slower space. Conversely, this is the most worthwhile stage in the life of merchandise. Tesco benefited a lot during this stage, as more consumers were aware of the merchandises and their features. The profit increase came as a result of decrease in promotion expenditures. Whats more, the only few promotion expenses were used to sustain and build a strong bond with the consumers (Aaker and McLoughlin, 2010). The competition at this stage is also stiff; thereby, the company gave the consumers the first priority by giving them hihly quality merchandise at affordable cost. This enabled Tesco to continue enjoying the fruits of its market strategies in a competitive market.

Decline stage

At this stage, the merchandise is well known by consumers and as result, it starts to lose taste in the market. For any company to continue enjoying the sales of such product, it must lower the cost of that product or refurbish it. However, in our case, the new product of Tesco has not reached this stage, as it is still new in the market (Aaker and McLoughlin, 2010).

References

Aaker, A. David, and McLoughlin, D. (2010) Strategic Market Management: Global Perspectives. London, John Wiley and Sons.

Humby, C., Hunt, T. and Philips, T. (2007) Scoring Points: How Tesco Continues To Win Customer Loyalty. Washington, Kogan Page.

Introduction

Globalisation has made cross-border investing more attractive and profitable but just as risky. The extent of this risk is highly dependent on the quality of corporate governance in the country where an international investor intends to do business. Corporate governance is defined as the organisational structure in the modern business system that provides the systems and mechanisms by which corporations can be administered and controlled in one direction towards the goals set by the state. A good corporate governance structure serves as the instrument to ensure that managers run business in the best interest of the corporate shareholders and stakeholders and that effective supervision is exercised over the management team so as to enable enterprises to create social wealth more effectively. Thus, corporate governance is crucial to the success or failure of an enterprise because it determines the control of financial market risks and the allocation of resources. In international business and finance, there are no hard-and-fast rules because different countries have different systems and traditions in interpreting and enforcing laws on corporate governance. Moreover, both tradition and legislation can change at any time to disrupt the business strategy of an investment firm. This paper then discusses the theories and principles in corporate governance as it affects international business, focusing on the modes by which these tenets are applied in actual practice and how investors devise their strategies and confront the attendant risks.

Corporate Governance

The corporate governance system occupies the attention of an investor more than the concern on how developed is a countrys capital markets. How companies are guided into following the principles of corporate governance plays an increasing role in investment decisions (Morck & Steier, 2005). From the investors perspective, the quality of corporate governance appears to be as important as a companys financial data, which sentiment became widespread in the aftershocks of recent corporate scandals like Enron, AOL and WorldCom. As a result, corporate governance has become the main concern of institutional investors when making their investment decisions (Solnik & Mcleavy, 2005). According to Stulz (2005), poor governance prevents investors from receiving a full return on their investment because third parties may pick off the yield before these get into the hand of the right party. In a poor governance setting, the value of firms is diminished in the capital markets such that the ability of entrepreneurs to raise enough money to finance their business activities is limited. This stymies the growth of companies and promotes smaller firms.

From an international perspective, there are two dimensions in corporate governance: the external country-level dimension and the internal firm-level dimension. The first dimension refers to the quality of a countrys laws and their enforcement, which determine to a large degree how investors will receive returns from their investment. Such returns are expected to be more meaningful if the laws efficiently protect the rights of investors in terms of coverage and enforcement (Copeland, et al., 2005). As for the internal firm-level dimension of corporate governance, it alludes to the options available to firms to make their companies well-governed. For example, they can band together as a group committed to a common policy of openness and disclosure so that corporate insiders would find it hard to take advantage of other investors (Elton, et al., 2003). In sum, the quality of corporate governance depends on the quality of external country-level and internal firm-level governance (Stulz, 2005).

According to Sercu (2008), corporate governance is conducive to investment if there are well-crafted laws and institutions that function adequately in terms of good auditing, financial health, shareholder protection, information disclosure and certification requirements. The challenge for international investors is that there are vast differences in the enforcement of such regulations and the legal environment across countries. In countries where governance is poor because of poor regulations and legal safeguards, the culprit is often official corruption. The higher the incidence of corruption, the higher concentration of corporate ownership in a few hands (Stulz, 2005). Under this condition, nothing can stop insiders from raiding the corporate coffers. When investors are thus poorly protected, the capital markets become weak and effectively prevented from performing their role of dispersing ownership and wealth. Good governance, in effect, means checks and balances to preclude misuse of funds as a result of the principal-agency theory. This corporate governance theory refers to the relationships between the firm owners (principal) and managers (agency), in which one determines the work and the other undertakes it (Klapper & Inessa, 2004). Governance is poor when there are no clear divisions between owners and managers because the two may work in cahoots to expropriate funds.

Global Finance & Business

In cross-border investment, it is mandatory for a company to first assess how corporate governance is influenced by a countrys legal system in terms of enforcing investment laws and protecting the rights of investors. These are the basic determinants of business performance and growth (Denis & McConnell, 2003). According to Ajami, et al. (2006), there are 10 specific areas related to corporate governance that may affect international investment:

• Decision systems
• Performance monitoring systems
• Incentive-based compensation
• Bankruptcy proceedings
• Ownership structures
• Creditor systems
• Capital structures
• Markets for corporate control
• Markets for management services
• Product market competition

Other inputs included in decisions to engage in global business and finance are a countrys international payments situation, international trade policy, level of economic development, including ethical and environmental issues (Charter & Tischner, 2001). Careful analysis is also required of a countrys international liquidity, banking and money supply, interest and inflation rates, exchange rates, international transactions, government accounts, gross domestic product and deflation rates (Bushman & Smith, 2001). For a Country Finance Officer (CFO), the specific concerns are the inter-relations between risk management, funding and valuation and the possible reneging on contract (Sercu, 2008). In one instance, a US-based investor went to court when a Scottish borrower failed to pay but the case dragged because the US and Scotland have two legal systems that contradicted each other.

Other than country managers, cross-border financial decisions are also made by heads of multinational corporations, portfolio managers, money managers, investment and commercial bankers, financial consultants/advisors and entrepreneurs. Amongst the more popular cross-border investment activities today are hedging, valuation and investing in emerging markets (Eun & Resnick (2006). To create and sustain firm value across borders, investors are encouraged to consider the four modules of international financial management:

1. Currencies and asset prices  decisions and strategies should work around the mechanics of exchange rates: how the rates are determined, how currencies influence stock prices, why and how central banks intervene in the foreign exchange markets.
2. Multinational financial decision making  the investor must analyse the extent of a firms exposure to exchange rates, how it can hedge this exposure, how to capitalise subsidiaries, when to partner with local farms, and how tax considerations figure into its internal financial decision making.
3. Cross-border valuation and financing  the firm should explore the ways by which valuation and financing decisions can be modified in cross-border settings to determine what amount of capital is enough in an emerging market and what kind of financing is appropriate when local laws are rigid.
4. Institutions and finance  the firm examine how different laws and regulations can impact financial decisions, how entrepreneurial finance changes when property rights are uncertain, what to do in the face of possible expropriation, what roles do multilateral institutions play in the internal financial market, and how to mitigate such risks.

Principles & Theories

In principle, corporate governance is designed to 1) promote the equitable treatment and rights of stakeholders, 2) recognise the interests of other stakeholders, 3) define the roles and responsibilities of the board of directors, and 4) uphold the integrity and ethical behaviour of the company (Morck & Steier, 2005). These four goals of good governance are believed achievable when rules are set that provide for the separate positions of chairman and CEO, the appointment of outside CEO and directors to the board, and the composition of a smaller board of directors. On the separation of chairman and CEO, Denis & McConnell (2003) found no evidence that this induces good governance. What was found influential in improving firm performance is the appointment of an outsider as CEO, the dominance of outside directors in the board and a smaller composition of the board.

The modern theory of the firm and corporate governance holds that private ownership/control of corporations is better than government ownership/control. This reduces the political risks for cross-border investors and promotes the idea of privatization, which has been associated with greater productivity and higher growth. Based on a study of 79 privatised firms in 21 developing countries (Boubakri & Cossett, 1998 in Denis & McConnell, 2003), 218 Mexican companies (La Porta, et al.,.2002), and 6,354 firms in Eastern Europe (Claessens & Fan, 2002), privatisation of state-owned corporations added new life and vitality to previously stagnant companies. The implications are that it would be worthwhile for firms to consider the privatisation program in the countries where they want to invest.

Another important theory in international corporate governance is the Modern Portfolio Theory (MPT), which is also called portfolio management theory. It is a given that investors want higher returns but the little risk (Mattaroci, 2006). To avoid the inherent risks in cross-border finance, investors follow the MPT by attempting to sort out, estimate and control both the type and amount of expected risks and returns (Moorman, 2005). The essence of this theory is the quantification of the relationships between risk and return and the expectation that rewards await those that assume the risks (Eiteman, et al., 2006). This means that investors now analyze the statistical relationships among the items in an investment portfolio whilst previous examinations were limited to the characteristics of each investment. There are four basic steps involved in MPT:

1. Security valuation  this describes the bundle of assets in terms of expected risks and returns.
2. Asset allocation  this determines how the assets would be distributed among the different types of investment.
3. Portfolio optimisation  this reconciles the risk and return by selecting the securities to be included in the investment portfolio based on which stocks promise the highest return for a given level of expected risk.
4. Performance measurement  this divides the stocks according to performance and market-related or industry-related classifications ((Moorman, 2005).

The Modern Portfolio Theory looks at risk in this context as the standard deviation from the mean in each stock (Eiteman, et al., 2003). This means that in two high-risk assets, one will always yield a good return since a bundle of assets can reduce the overall risk. Thus, the theory lends credence to the homegrown advice to farmers not to put all their eggs in one basket. Under the MPT, the risk specific to one stock can be countered by diversification because such risk is reduced as the number of stocks in an investment portfolio is increased. For this reason, diversification is considered essential to the practice of portfolio management, together with the setting of a capital allocation line and an efficient frontier line. An investor engages in diversification if he holds a diversified portfolio of assets to minimise the risks posed by an individual asset. For this purpose, the investor secures instruments that are perfectly uncorrelated, avoiding those that are perfectly correlated or inversely correlated (La Porta, et al., 2002). As for the capital allocation line, it refers to the line of expected return drawn against the risk or standard deviation that connects all assets in the portfolio, while the efficient frontier line is the intersection between the set of portfolios with minimum variance and the set of portfolios with maximum return (Eiteman, et al., 2003).

In emerging markets, however, there are doubts about the efficiency of the Modern Portfolio Theory. Lins & Servaes (2002) studied 1,000 firms in seven emerging markets and found that diversified firms are less profitable than those focused on a single market segment. The primary reason is that newly industrialised economies have severe market imperfections and inefficient internal capital markets. The study also noted that diversification does not enhance the value of firms even in the developed economies of the US, UK, Japan and Germany. What happens is that the high cost of diversification in these developed countries offset the supposed benefits from the process. Nonetheless, Lins & Servaes (2002) believe that diversification may yet work for firms in emerging markets because they can mimic the beneficial functions of various institutions in developed markets that push that risk reduction activity.

Application & Practice

The study of Lins & Servaes (2002) showed that some investors used market imperfections to their advantage by forming themselves into an industry group. This group structure has allowed member firms to trade at a discount of almost 15 per cent because it enabled the expropriation by controlling shareholders of minority shareholders.

Next to diversification as a key MPT activity in risk reduction is hedging, which is the use of financial instruments to reduce or even eliminate the negative impact of an unstable exchange rate on the firms cash flow (Sercu, 2008). A prime instrument for hedging is the forward contract, which is also used in international financial management for the purposes of speculation, arbitrage, valuation and shopping around. Citibank applied this principle in practice when it sold a forward contract in Japanese yen to a local band for its planned nationwide tour. Before the event, however, the band dissolved but this did not affect Citibank, which then sold the contracted yen in the spot market. Under the forward contract, the bank had also specified that can revoke its own obligation for such a reason and so the net loss it suffered was smaller and could have even turned into again.

On diversification as an MPT activity, the theory has been used by a firm called Quadriga Superfund, which now manages over $1.5 billion worth of futures funds for over 55,000 retail and institutional investors worldwide. The Superfund trades in 140 futures markets around the world through a proprietary trading system called TradeCenter. Quadriga is named after the four-horse chariot used by the soldiers and gladiators of ancient Rome. The metaphorical reference is meant to demonstrate the flexibility and all-around efficiency of Superfund, alluding to the way the Romans cleverly chose the four-horse complement such that a perceived weakness of one horse would be compensated by the power of the others. At Superfund, the four Quadriga horses are presented as symbols of the firms overall philosophy, which consists of diversification, technical excellence, money management and trend-following strategies. In its management of futures products, Superfund provides investments calculated to yield long-term capital growth, and a diversified global portfolio that guarantees more returns and less volatility. It steers away from traditional and more risky investments in stocks and bonds, where market correlations are nil. Because of the capability of TradeCenter to identify and respond to risks in split seconds, Superfund consistently produces double-digit returns on investment. This flexibility also springs from its highly diversified trades, which enable the firm to protect its investors even during market downturns. For the same reason, the firm changes the distribution of its managed funds from time to time when some sectors are being eroded by liquidity, volatility and other adverse market factors. Ordinarily, the Superfund investment pie is divided equally among trades in such commodity and financial futures as energy, metal, grains, agricultural markets, stock indices, currencies, bonds and the money market.

The above chart indicates the range of markets that Superfund trades or may trade, but the share of allocation for each investment area is changed from time to time depending on liquidity, volatility and risk considerations. This is in line with the Modern Portfolio Theory.

Bibliography

Ajami, RA, Cool, K, Goddard, GJ & Khambata, K, 2006, International Business: Theory and Practice 2d ed. North Castle Books.

Bushman, RM &  Smith, AJ, 2001, Financial Accounting Information and Corporate Governance, Journal of  Accounting and  Economics 32.

Charter, M &  Tischner, U,  2001, Sustainable Solutions: Developing Products and Services for the Future, Greenleaf.

Claessens, S & Fan, J,  2002, Corporate Governance in Asia: A Survey. International Review of  Finance.

Copeland, T, Weston, JF & Shastri, K, 2004, Financial Theory and Corporate Policy 4^th ed. Addison-Wesley.

Denis, DK & McConnell, JJ, 2003, International Corporate Governance Vol. 38, No. 1,  Journal of Financial and Quantitative Analysis.

Eiteman, DK,  Stonehill, AI & Moffett, MH, 2006, Multinational Business Finance 11^th ed. Addison- Wesley.

Elton, EJ, Gruber, MJ Brown, SJ & Goetzmann, NN, 2003, Modern Portfolio Theory and Investment Analysis 6^th ed. John Wiley & Sons Inc.

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Stulz, 2005, Corporate Governance and Globalization, National Bureau of Economic Research.

Recognizing and acknowledging the strengths and weaknesses of an organization is crucial to determining the further path toward its success in the target setting. World Vision, an organization created to support the children in need and supply them with vital resources, has been striving to improve its services and remain helpful. World Vision has been supported extensively by its key donors and achieved success in its fundraising endeavors, which suggests that the organization has a rather strong potential (Our work, 2021). Moreover, its excellent communication strategy allows World Vision to meet its goals effectively.

Weaknesses

However, with the recent challenges observed globally due to the pandemic and the associated issues, World Vision may need a more resilient approach to managing its performance. Additionally, the underdeveloped supply chain of World Vision represents quite a problem (Foundations team strategic refresh, 2020). The specified issue is a direct effect of the lack of support from business partners, which means that World Vision will need to expand its range of collaboration practices (Author, 2021a). Finally, the continuous drop in donations represents a tangible threat.

Opportunities

World Vision could use a chance to build new initiatives that could attract potential donors and sponsors. By making these events annual, World Vision could set the stage for the continuous and reliable financial support (Author, 2021b). Moreover, further collaboration with organizations operating in the specified area represents an opportunity.

Threats

However, world Vision may also face quite a range of threats unless the weaknesses identified above are addressed. Specifically, the lack of financial support from its donors will entail a financial collapse for World Vision. Furthermore, the low entry barrier for similar organizations suggests that World Vision is likely to face quite stiff competition rather soon. Currently, World Vision has been struggling to maintain a competitive advantage among organizations such as WVUS, USAID, STC, CRS, CARE, MERCY, and REDX (Save the Children, n.d.; Mercy Corps, n.d.; Compassion, n.d.). Given their long-lasting presence in the target market, World Vision will need a major competitive advantage to remain in the selected economic context. Therefore, World Vision will require a resilient and reliable business strategy to retain its financial sources and introduce new ones.

Reference

Compassion. (n.d.). About us. Web.

Author. (2021a). Competitive landscape and analysis. Unpublished manuscript. Course, University, Country.

Foundations team strategic refresh. (2020). WordlVision.

Mercy Corps. (n.d.). What we do. Web.

Our work. (2021). WordlVision.org. Web.

Save the Children. (n.d.). What we do. Web.

Author. (2021b). Team SWOT analysis. Unpublished manuscript. Course, University, Country.

Introduction

The balanced scorecard is a performance gauging tool that is meant to match business activities with the companys vision statement. It is a strategic planning system that can be used to monitor business activities and the results that arise from these activities. A survey undertaken by Bains and Company on the fortune 1000 companies revealed that about 50% of these companies use the balanced scorecard to monitor their performance (Cobbold & Lawrie, 2002). The benefits provided by this planning system are diverse thus accounting for its popularity. While many critics argue that the balanced scorecard is a fad (Maisel, 1992), the following two cases will argue differently.

Balanced Scorecard at Phillips Electronics

Royal Phillips Electronics is a multinational electronics company whose headquarters are based in the Netherlands. The company is one of the largest in the world and has over 100,000 employees in over 60 countries. The company is divided into three sectors: Philips Lighting, Phillips Consumer Lifestyle, and Phillips Healthcare. In order to fully monitor the companys operations and to ensure that the companys vision is being met, a strategic performance measurement system was needed (Gumbus & Lyon, 2002).

The Phillips balanced scorecard was specifically planned to ensure that the companys vision and corporate strategy received a mutual understanding within the organization. The tool was designed to incorporate four critical success factors: competence, financial, customers, and processes (Cobbold & Lawrie, 2002). In the Phillips BSC, higher-level measurement criteria act as the framework for lower-level criteria. Through this, the company aimed at transforming relationships such as those with customers and sales into critical success factors. This was carried out through the identification of customer and financial success factors that gave the company an edge over their competitors, and then they identified the process success factors that had the biggest impact on the customer and financial success factors resulting in the competitive edge (Gumbus & Lyon, 2002). To have a measurable strategy, the company instituted a performance monitoring system that measures how the companys vision was being met. Under this system, the short-term activities are linked to the long-term strategy of the company hence allowing employees to understand how their daily work contributed to the achievement of the companys goals (Gumbus & Lyon, 2002).

The Phillips BSC is divided into three stages: First, the strategy review card that highlights the corporate vision and goals that the company aims to achieve; second, the operations review card that highlights processes and steps to be taken by each department to achieve the companys desired goals; and lastly, the business unit card that is prepared by each department and highlights actions to be taken by each employee within the department to enable the company meets its targets. (Gumbus & Lyon, 2002). At all levels, the four critical success factors (CSFs) act as indicators of how the companys strategy is being met. Each business unit is responsible for choosing the critical success factors that the unit has main control responsibility for (Gumbus & Lyon, 2002). These key balance scorecard indicators will then act as a monitoring tool for the implementation of the corporate strategy. Process success factors were determined by identifying how improvements in the companys processes might improve customer satisfaction. The customer critical success factors were determined from survey data that revealed performance proportionate to the price for competing goods. Competence critical success factors were chosen by establishing what competencies were important to deliver the other three critical success factors. Finally, the financial critical success factors were identified by using standard financial reports (Gumbus & Lyon, 2002). Indicators for measuring CSFs were determined by each business unit after which relationships between outputs and processes were quantified. The final aspect of the BSC was to set targets based on the difference between the current performance and the desired performance.

The balanced scorecard system at Phillips has granted the company many benefits. First, it guided the formation of an organizational culture that was more accountable for results. The scorecard also enables real-time tracking of results and action planning (Gumbus & Lyon, 2002). Information from departments is fed into the web-based balanced scorecard report and thus regularly updated data is immediately accessible. The final advantage of the BSC is that employees understand how their contributions allow the company to meet its target goals and overall corporate strategy. It, therefore, acts as a motivation tool enabling everyone to work towards a common goal.

The balanced scorecard at Phillips was implemented from the top down. The top management set out the balanced scorecard by identifying operational targets. These targets were assimilated through various corporate layers as objectives at departmental layers and as goals for the various divisions all over the world. This top-down approach enabled the companys goals to be linked with the employees as well as the corporate strategy. Another important aspect of the implementation is that departments were responsible for choosing the various indicators responsible for monitoring how the CFCs were being achieved (Gumbus & Lyon, 2002). This enabled the employees to have a clear understanding of what was required from them as well as made it easier for various departments to work towards the corporate vision. Indicators were developed by those who understood them and not by someone far away in an office.

The case of Phillips electronics is a good example of how a balanced scorecard can be used to line up the organization with the strategic goals and vision. The company has been able to ensure that its wide employee base shares a common understanding of what is required from them to help the company meet its targets.

The Case of Futura Industries

Futura Industries is a multinational manufacturing company that deals with products made from aluminum. The company is based in Utah and has had over 50 years in the design, extrusion, and fabrication of aluminum products. The company targets high-end clientele in an array of markets such as transportation, floor covering, electronics and retail. According to the president of the company, Susan Johnson, the company had instituted many customer measures and all the financial metrics thus the company has various in-house processes geared towards quality. The incorporation of the balanced scorecard in this company was so as to improve its human resources and stand apart from other extrusion companies.

At Futura, the four quadrants of the BSC system are applied: foundation level (employees), customer service, internal and financial operations (Johnson, 2003). Learning, growth, and innovation are three important aspects used to implement the quadrants of BSC. The companys mission statement reads Extraordinary Value through Extrusions and as such, every employee in the company is expected to contribute towards the goals of the company as well as consumer success (Johnson, 2003). The BSC at Futura is meant to put employees first. The companys main focus has been to improve the competencies of the employees, attract employees who share the companys vision, and provide a challenging yet enjoyable workplace. In order to have a competitive edge in the saturated market with which the company belongs, Futura hires and retains the top talent and ensures constant customer satisfaction. The BSC at Futura is developed through various surveys taken within the company. The company undertakes various programs to ensure a well-balanced workplace. These foundation level programs include Birthday review, Employee Friendly Initiatives at Futura, certification and a training matrix, personal development review, and annual performance review (Johnson, 2003).

A balanced workplace is created by direct interaction with employees at Futura. Employees get to voice their opinions on how the company can become a better employer. The Employee Friendly Initiatives at Futura is a survey that aims to find out what company benefits the employees value most (Johnson, 2003). The birthday review is a yearly survey that occurs during the season of an employees birthday. The interviewees are asked about their perception of the work environment, difficulties and achievements experienced, and level of communication. The company uses a rating of 1 to 4, with employee satisfaction being rated at 3.2 (Johnson, 2003). The questions asked during such surveys mainly cover difficulties in executing tasks, presence of support in the workplace, employee happiness at work, and means to improve communication. Employees are also required to give their opinion about the companys leadership and if they see themselves working for the company in five years. A follow-up form is provided to ascertain that recommendations are taken into consideration and that appropriate changes are implemented. The annual leadership survey is meant to improve communication between the management team and the employees by taking inputs directly from the employees (Johnson, 2003). The leadership survey includes questions on whether the management team avails information that enables employees to view the big picture, displays courtesy, takes initiative, and avoids discrimination or favoritism. Most of the surveys carried out at Futura are meant to gather information about different aspects of the company from the employees. This information is then analyzed and appropriate steps are taken so as to ensure that the employees are aiming at the same goal as the company.

Another important aspect of the Futura BSC is the second quadrant, customer service. According to Johnson (2003), Futura ensures customer satisfaction by hiring individuals that match the values of the company and retaining those who offer exemplary customer service. At Futura, the customer service aspect of the BSC has several important measures: customer grievances and approvals, rate of material returns, and prompt delivery of goods (Johnson 2003). Customer satisfaction is determined by random customer surveys with questions meant to find out the relationship a particular customer has with the company. The third quadrant of the Futura BSC is the financial dimension. The company has developed a unique tool that evaluates the cost per item per consumer enabling the company to compare profitability between consumers. Using this information, the company then selects customers with the worst track record and then investigates the reason behind their drop in consumption (Johnson, 2003). The final quadrant of the Futura BSC is the internal operations dimension. Measures instituted in the internal aspect deals with mainly four goals: plan and provide perfect products, perfect delivery system (accurate and on time), identification of new opportunities, and cost reduction.

The balanced scorecard at Futura has very many advantages. First, the company is in touch with its employees thus the management team can align the company with the corporate vision. Each employee can voice his concerns and ensure that no misunderstanding occurs during the execution of tasks. Secondly, the company is also in touch with its customers. Through the various surveys taken, the company can understand what customers want and what they lack and thus take appropriate steps to ensure customer satisfaction. The various internal measures were taken also ensure that processes within the company are following the companys mission and that these processes fit with the other dimensions (consumer service, financial and foundation dimensions).

By using surveys to implement the BSC, Futura has been able to personalize the process. The employees, as well as the customers, can feel a connection with the company. The company is also dedicated to ensuring that appropriate changes occur and that the employees are an integral part of the company. This has led the company to develop a strong workforce and a dedicated consumer base. The learning, innovation, and growth aspects of the Futura BSC are also flexibly changing with the priorities and growth in employee skills. This allows the company to be in synch with changes in the environment and adapt accordingly.

Conclusion

The two cases above highlight how the balanced scorecard is being implemented in companies. The scorecard can be used to monitor different aspects of a given company concerning the attainment of the company goals. It can be seen that one of the most important aspects of the BSC system is the identification of indicators that measure progress towards meeting the corporate vision. The four critical factors of a BSC system can be integrated into various ways to help a company meets its objectives. The critical success factors may be in the form of surveys intended to gather information and make appropriate changes or they can be in terms of setting targets and monitoring how they are being met. The balanced scorecard is definitely not a current trend but rather a strategic tool that has changed how businesses monitor their performance.

References

Cobbold, I. & Lawrie, G. (2002). The Development of the Balanced Scorecard as a Strategic Management Tool. Performance Measurement Association, 7, 6-13.

Gumbus, A., & Lyons, B. 2002. The Balanced Scorecard at Philips Electronics. Strategic Finance, July, 36-41.

Johnson, S. D. (2003). The Balanced Scorecard at Futura Industries. Strategic Finance, November, 45-49.

Maisel, L. S. (1992). Performance measurement: the balanced scorecard approach. Journal of Cost Management, 6(2), 47-52.