Winning Strategy 1:
Strategy Deployment Plan
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Overview of BSC
Comparison of BSC ,Policy Deployment
(Hoshin Kanri) & Business Process ReEngineering
Overview of organizational Strategy
Recommended Deployment of Strategy using
BSC
Summary
Conclusion
References
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Created in 1992 by Kaplan and Norton
A holistic method of measuring
organizational performance
Complements traditional financial assessment
methods
Balances short term activities with long term
plans
Functions as a strategy deployment tool
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BSC is based on four (4) premises:
Finance
Clients
Internal Processes; and
Learning and Growth
FINANCIAL PERSPECTIVE
 Analysis of financial performance (Reports &
Ratios)
 Determining company financial health
 Addresses issues such as profitability, ROCE,
sales figures, liquidity, debt figures, etc.
CLIENTS PERSPECTIVE
 Focuses on customers needs
 Assesses how well products/services fulfill
consumers requirements
 Market Segmentation & Customer Surveys
INTERNAL PROCESSES
 Concerned with operational activities within
the organization
 Analyzes how efficiently and effectively they
function
 Aims to ensure they work towards attaining
organizational goals
LEARNING AND GROWTH PERSPECTIVE
 Examines how much organizational learning
occurs within the company
 Concerned with employees growth and skills
development
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Analysis is done on each perspective
The requirements for each are defined
The cause & effect relationship between them
is expressed in a strategic map
Here, organizational goals and objectives,
defined action plans and performance
indicators selected are reflected.
The BSC may be used alongside other
strategic development methodologies.
Pro’s
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Clarifies and translates
vision and strategy.
Communicates and link
strategic objectives
and measures.
Helps plan, set targets
and align initiatives.
Enhances strategy
feedback and learning
in division
Con’s
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Overly abstract
Balanced Scorecard
goals are easy to reach
but hard to quantify
Implementation of the
balanced scorecard is
time consuming
Balanced Scorecard
does not include direct
financial analysis of
risk management
COMPARISON OF BSC, HOSHIN KNARI (POLICY DEPLOYMENT) AND BPR
BSC
HOSHIN KANRI
BPR
Performance
measurement system &
strategy deployment tool
Strategy deployment
tool
A tool for the
introduction of radical
change
Focuses on cause & effect
relationships between
strategic objectives
Way of deployment,
communication, &
execution of strategy
Aims to re-design
business processes to
improve efficiency and
effectiveness
Describes the
perspectives to focus
upon
Organizational
objectives are developed
by employees through
the ‘catchball’ process
Encourages
organizational
communication through
brainstorming sessions
Describes the
perspectives to focus
upon
All endeavours are
aligned to the same
vision and goal
Involves analysis of risk
assessment
BSC disadvantages can be mitigated in the
following ways;
 Combining BSC with a complimentary
deployment tool e.g Hoshin Kanri
 Ensuring that strategic objectives are
S.M.A.R.T
 Making effort to avoid measure bias. i.e using
the same measurement for different
objectives
 Carrying out analysis of Risk Management i.e
opportunity cost should be considered
Increase market share in Europe
Actions and costs
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Research European market pricing structure, discounts,
distribution, competition, product and safety specifications
etc. Identify a distributor who could take on the European
sales and handle any future expansion of the market. Need
new computerized finance package for Euros and to reduce
Finance workload (estimated cost £25,000)
Identify successful European promotional campaigns and put
together a winning promotions strategy. Increase marketing
spend to £250k.
Increase price of both products by approximately 2.5% (in line
with inflation).
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Reorganize the Leisure sales team to three external
sales representatives and three internal sales
people to handle client follow-up by taking on two
new salespeople and take on a European sales
representative in the Rescue/Military sales team.
Continue to invest in new technology costing an
estimated £150k on capital expenditure.
Reorganize Finance and HR departments by moving
wages and salaries manager into the Finance
department. Reduce the remaining clerical staff in
HR to a total of one
To be the second largest inflatable boat
Production Company in Europe in 5 years and
start to expand in the U.S. market.
FINANCE
CLIENTS
INTERNAL PROCESS
LEARNING
OBJECTIVE
OBJECTIVE
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Increase Production
Capacity by 40%
OBJECTIVE
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Increase customer
satisfaction to 85%
OBJECTIVE
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Increase the number of training/skill
development programs for employee.
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Increase market share to
30% of the European
market
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Reduce overhead costs
By 20%.
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Reduce Bureaucracy
To get information regarding the target areas,
taste and best market opportunities of U.S.
market.
Increase R.O.C.E. from
27.05% to 35%
MEASURES
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Increased profit figures. o
Increase in sales in
Europe market
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Reduction in
inventories.
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TARGETS
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Increase R.O.C.E. to
30% in first 2 years
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Increases R.O.C.E. by
33% in 4 years
INITIATIVES
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Identify distributor for
European market
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MEASURES
Increasing marketing
spending to £250 k.
MEASURES
Customer retention
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Customer complaints.
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Sales in European
Market
Reduction in time taken
to approve discounts.
Production figure
Reduction in non-value
added activities.
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Analyzing surveys
TARGETS
• Increase European
market share to 20% at
the end of 3 years.
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TARGETS
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Increase production by
30% at the end of 3
years.
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Reduce overhead costs
Get at least 75% of survey
by 10% at the end of 3
forms back from the pool
years.
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Reduce time taken to
of our customers.
approve discounts by
75% at he end of 5 years.
INITIATIVES
• Development European
marketing campaigns
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Re-organize sales team
to handle client service
Increase market spends
to £250k.
INITIATIVES
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Restructure
organizations
departments.
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Purchasing financial
computer information
systems to reduce
workload
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Invest in new technology
MEASURES
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Employee efficiency
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Employee productivity
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Knowledge base regarding the U.S. market
TARGETS
• Increase employee efficiency by 50%
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Increase employee productivity by 50%
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Identify potential distributors in the U.S.
market.
INITIATIVES
• Increase investment in research activities
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Invest in new technology.
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Form a team of people to research about the
U.S. market.
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The Organizational objectives have been
clearly outlined for each perspective
Specific targets were defined
Performance Measures are suggested
The action steps stated in the strategy were
highlighted as initiatives
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The BSC can be efficiently used in the
deployment of this selected organizational
strategy
It will allow for the clarification and
translation of the company vision
As well as provide feedback to enhance the
organizational learning process
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(6) Pp. 3
Kaplan, R.S., & Norton, D.P., (1996) Using the balanced scorecard as a
strategic management system. Harvard Business Review. Pp. 75-85
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