Opportunities & Challenges of
Strategy Mapping: The case of All
Star Foods Canada (ASFC)
1
FAT H I E L L O U M I
FOB Research Forum – January 27, 2012
If I can’t measure it, I can’t
manage it, I can’t improve it.
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1
• Research Motivation
• Research Objective
2
• Strategy
• Strategy Map
3
• Objectives & Measures
• Targets & Initiatives
4
• ASFC – The case study
• ASFC Situational Analysis
5
• ASFC Strategic Gap
• ASFC Strategic Alternatives
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• Strategy Map for ASFC
• Challenges & Opportunities
Makes vision, mission, and strategy statements meaningful and
actionable for employees
FOB Research Forum – January 27, 2012
Motivation
3
 Economic uncertainty and business survival
 Why do so many business fail?
 6 out of 10 businesses fail < 4 years (Knaup, 2005)
 Poor strategy execution
 No viable market
 Lack of competitive advantage
 Competing Head-to-Head with industry leader
 Too much leverage
 Undercapitalizing the business
 Etc.
  A Map is a Must have!
FOB Research Forum – January 27, 2012
Question/Objective
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 How to make vision, mission, and strategy
statements meaningful and actionable for
employees?
 Applying BSC as a strategy mapping tool to ASFC to
track and monitor capabilities building for future
growth and profitability.
 Builds on Kaplan (2000, 2002, 2005, 2009),
Kaplan & Norton (2000), Schneiderman (1999,
2001), Arveson (2009), and Atkinson et al. (2012)
FOB Research Forum – January 27, 2012
Strategy
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 A strategy accomplishes two principal functions:

Creating a competitive advantage by positioning the company
in its external environment with resources to support
customers better than its competitors

Having a clear strategy provides clear guidance for how
internal resources should be used to gain a competitive
advantage in the marketplace (Porter , 1996)
FOB Research Forum – January 27, 2012
Strategy Map
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Mission, vision, & strategy
Financial
What financial performance
should we deliver for our
shareholders?
Customer
To achieve our vision &
financial objectives, how must
we deliver value to customers?
Process
To meet our financial &
customer objectives, at which
process must we excel?
Learning & Growth
FOB Research Forum – January 27, 2012
Kaplan & Norton (2000)
How do we align & enhance
our intangible assets to
improve critical process?
Strategy and the BSC (Kaplan & Norton, 2000)
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 A BSC tells the story of the business unit’s
strategy
 A BSC identifies and makes explicit the
hypotheses about the cause-and-effect
relationships between:


Outcome measures in the Financial and Customer
perspectives
Performance drivers of those outcomes in the Internal and
Learning and Growth perspectives
FOB Research Forum – January 27, 2012
BSC Objectives
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 Concise statements that articulate what the
organization hopes to accomplish
 Action phrases
 Tell the story of the strategy through the causeand-effect relationships
FOB Research Forum – January 27, 2012
Schneiderman (1999)
BSC Objectives
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 Typical objectives found in each of the four BSC
perspectives include: (Atkinson et al., 2012)




Increase revenues through expanded sales to existing
customers (Financial perspective)
Become service oriented (Customer perspective)
Achieve excellence in order fulfillment through continuous
process improvements (Internal perspective)
Align employee incentives and rewards with the strategy
(Learning and Growth perspective)
FOB Research Forum – January 27, 2012
Measures
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 Provide specificity and reduce the ambiguity that is
inherent in word statements
 Specifying exactly how an objective is measured will
give employees a clear focus for their improvement
efforts
 Once the objectives have been translated into
measures, managers select targets for each measure
FOB Research Forum – January 27, 2012
Schneiderman (1999, 2001)
Targets and Initiatives
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 Targets establish the level of performance or rate of
improvement required for a measure


Should be set to represent excellent performance
Should, if achieved, place the company as one of the best
performers in its industry
 Initiatives are the short-term programs and action
plans that will help achieve the stretch targets
established for its measures
FOB Research Forum – January 27, 2012
Atkinson et al. (2012)
ASFC – the case study
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 ASFC, Canadian subsidiary of ASF Intl, a large
manufacturer of salty snack foods.
 Due to disappointing sales growth and financial
results ASFC underwent a major restructuring of its
senior management team in 2009.
 The mandate of the new team was to double the size
of Canadian operations and generate pre-tax profit
greater than 10% within a five year period.
 End 2011. Despite the best efforts of the
management team, ASFC is still short of achieving
that mandate.
FOB Research Forum – January 27, 2012
SITUATIONAL ANALYSIS
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- Ability to access funds from ASF
- Sophisticated IT system
- Cross Canada breadth
- Multinational brand/In house R&D
- Up to date equipment
- Poor brand representation in the west
- Warehousing and shipping logistics
- Senior Management unfocused and new
to ASFC
- Employee engagement is low due to lack
of direction/ low employee morale
SWOT
- Acquisitions
- House brand market
- Healthy snack
- Pets snack line (Petsnax)
FOB Research Forum – January 27, 2012
- A pending lawsuit which may
damage the brand reputation
- Potential that ASF will sell ASFC to
GoodCrunch
- Product diversification
ASFC Strategy Gap
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People
•
•
•
•
lack of leadership
disintegrated view of the company
lack of alignment of business and personal goals
low employee morale due to uncertainty
•
•
•
Processes •
lack of innovation
defective quality control system
distribution - low order fulfillment ==> salesperson complaints
weak product shelf placement strategy
•
•
•
Customers •
faltered customer's perspective (i.e. supermarket channel)
low customer satisfaction and loyalty
risk of a hit on the company's brand and reputation
no real market growth strategy
Financial
•
•
•
•
weak financial performance
no enhancement to existing customer value
weak productivity growth strategy
lack of capacity utilization optimization
Shareholders
FOB Research Forum – January 27, 2012
• not happy, company not progressing towards achieving its mandate
• closely monitoring ASF share price affected negatively by ASFC low
performance
• threatening to sell ASFC to Goodcrunch
ASFC Strategic Alternatives
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The key issues to be addressed to achieve the mandate:
 Identification of a market expansion strategy
 Improvement in logistics and distribution networks
The key strategic alternatives identified were:
 Organic Growth
 Amalgamate with SSI
 Acquire Deli Snack
FOB Research Forum – January 27, 2012
ASFC Strategy Map - Financial
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 Companies generate revenue growth by:
 Selling new products
 Selling to new customers
 Selling in new markets
 Increased productivity occurs by:
 Lowering direct and indirect expenses
 Utilizing their financial and physical assets more efficiently
FOB Research Forum – January 27, 2012
ASFC Strategy Map - Customer
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 Identify the targeted customer segments in which the
business unit competes and the measures of the
business unit’s performance in these targeted
segments
 This perspective typically includes several common
measures of the successful outcomes from a wellformulated and implemented strategy:




Achieve customer satisfaction and loyalty
Acquire new customers
Increase market share
Enhance customer profitability
FOB Research Forum – January 27, 2012
ASFC Strategy Map - Customer
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 ASFC value proposition? - the unique mix of product,
price, service, relationship, and image offered to the
targeted customers


Defines the company’s strategy
Communicates what the company expects to do for its
customers better or differently from its competitors
 Value propositions used successfully by different
companies include:



“Best buy” or lowest total cost
Product innovation and leadership
Complete customer solutions
FOB Research Forum – January 27, 2012
ASFC Value Proposition
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“Low-Total-Cost
Value Proposition “Deliver a combination of quality, price, and ease of purchase that no one can match”
Low-totalcost
Measures
Be a low
cost
supplier
Deliver
consistent
high quality
-Price relative
to competitors
- # returns; $ value
of returns
- Customer’s
cost of
ownership
- # & % customer
complaints
Provide a
speedy, easy
purchase
Offer
appropriate
selection
- # on-time delivery
- product-mix growth
- Customer lead
time
- # new product lines
- Product mix range
- % perfect orders
- # health incidents
FOB Research Forum – January 27, 2012
Adapted from Atkinson et al. (2012)
ASFC Strategy Map - Process
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 How ASFC will:


Create and deliver the value proposition for customers
Achieve the productivity improvements for the financial objectives
 ASFC critical processes at which it must excel to achieve
its customer, revenue growth, and profitability:

Operating processes: day-to-day processes




Day-to-day processes by which companies produce their existing
products and services and deliver them to customers
Customer management processes
Innovation processes to develop new products & processes
Regulatory and social processes to meet regulations/BBP
FOB Research Forum – January 27, 2012
Arveson (2009)
ASFC Strategy Map – Learning & Growth
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 ASFC objectives for the people, systems, and
organizational alignment that create long-term
growth and improvement


Define the employee capabilities, skills, technology, and
organizational alignment that will contribute to improving
performance in the measures selected in the first three
perspectives
Identify investments needed to improve the skills of
employees, enhance information technology and systems, and
align people to the company’s objectives
FOB Research Forum – January 27, 2012
Arveson (2009)
ASFC Strategy Map – Learning & Growth
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 Develop core competencies and skills
 Encourage employees to gain a broader business
understanding
 Build the level of skills
 Develop leadership skills
 Provide access to strategic information
 Engage and empower employees
FOB Research Forum – January 27, 2012
Arveson (2009)
Connecting the Four Perspectives
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 A strategy map provides a visual representation of
the linkages in the four perspectives of the BSC
Financial Perspective
Return on Investment
Customer Perspective
Customer Loyalty
On-Time Delivery
Process Perspective
Process Quality
Learning and
Growth Perspective
Employees’ Process Improvement Skills
FOB Research Forum – January 27, 2012
Cycle Time
Opportunities
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 The benefits from BSC are realized as the
organization integrates its new measurement system
into management processes that:



Communicate the strategy to all employees and organizational
units
Align employees’ individual objectives and incentives to
successful strategy implementation
Integrate the strategy with ongoing management processes
FOB Research Forum – January 27, 2012
Challenges
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 Poor organizational process for developing &
implementing the scorecard: (Atkinson et al, 2012)




Senior management is NOT committed
Scorecard responsibilities do not filter down
Scorecard is treated as a one-time event
BSC treated as a systems project rather than as a management
project
FOB Research Forum – January 27, 2012