Exercise Solutions: Strategic management accounting and the balanced scorecard
Based on Chapter 11 of Seal’s Management Accounting for Business Decisions
Task 1
Explain briefly whether you consider the strategy to be one of product differentiation or cost
leadership.
Dualcore’s strategy is one of cost leadership. The company plans to grow by producing
high-quality, low-cost products delivered to customers in a timely manner. There are
many similar products on the market so there is no product differentiation. To succeed,
the company must lower its costs relative to the competition through productivity and
efficiency improvements.
Task 2
Identify and explain your choice of two measures for each of the perspectives that you might expect to
see in Dualcore’s balanced scorecard for next year.

Financial perspective
Possible measures include:
operating income from productivity gain
operating income for growth
cost reduction
These measures identify whether cost reduction and growth generation has been
successful.

Customer perspective
Possible measures include:
market share
new customers
customer satisfaction index
customer retention
time taken to fulfil orders
These improvements in customer measures indicate superior financial performance.

Internal business perspective
Possible measures include:
productivity
order-time delivery
on-time deliveries
Improvements in these measures are expected to lead to more satisfied customers
and superior performance.

Learning and growth perspective
Possible measures include:
percentage of employees trained in quality management
employee satisfaction
number of major process improvements
Improvements in these measures are part of the cause and effect relationship with
improvements in internal business process etc. (see diagram below).