Bay Industries by d7qPyB


    Class Announcements
   Egg Farm visit 3:30pm Friday March 30th; meet bus at front of Schwartz School
   Traditional Assignment:
       Assignment #2 available on-line due March 23, 2012
       Assignment #3 available on-line early next week
   Service Learning Assignment:
       Progress report #2 is due week of March 19th
   CMA Accreditation Event 2:00-3:00pm March 29th
   Leadership Conferences:
     Deloitte March 23rd

     PWC Information session 12:45pm Wednesday March 21st in SCHW190
     KPMG
Class Objectives
1.   Implementing the Balanced Scorecard in context
2.   Using Subway as the context of developing a
     Balanced Scorecard
3.   Assigning measures to strategic objectives in the
     framework of the Balanced Scorecard.
Strategy: The Balanced Scorecard
   The Balanced Scorecard (BSC)
     translates an organization’s mission and strategy into a
      set of performance measures
     provides the framework for implementing its strategy
     provides a system for measuring and managing all
      aspects of a company’s performance
     balances the use of financial and nonfinancial
      performance measures to evaluate performance.
     has four perspectives: 1) Financial 2) Customer 3)
      Internal Business and 4) Learning and Growth
    Strategy: The Balanced Scorecard
5   (BSC)
    Financial Perspective          Return on Investment

    Customer Perspective             Customer Loyalty

                                     On-Time Delivery

    Internal Perspective    Process Quality        Cycle Time

    Learning & Growth
                            Employees’ Process Improvement Skills
Balanced Scorecard
              Strategy Map        Objective            Measure            Target
                                Strategic Theme: Internal Product Development                Initiative

                             • Grow Revenue       • Annual Revenue          +25%      • xx

                               from new             Growth
                Revenue        products
                                                  • Percent Revenues        30%       • xx
                                                    from New Products

                             • Satisfy            • Customer Retention      80%       • Relationship

                               Customer Needs                                           Management
               Innovative      for State-of-Art                                         Program
               Products        Capabilities       • Share of Account        40%
                                                                                      • Gain Sharing

                             • Accelerate New     • Product Functionality   #1 in     • University Liaison/
              World Class
                               Product                                        indy.     Technology Transfer

                Product        Development
              Developmen                          • Time to Market
                    t                                                       9 mos.    • Development Cycle
                                                                                        Time Reengineering

                             • Acquire,           • Specialized             100%      • Competency Model
                               Develop and          Competency                        • New Hiring Program

 People &

                High-          Retain Strategic     Availability
                Talent         Skills
               Workforce                          • Key Staff Retention     95%       • Supervisory Training
                                                                                      • Benefits Program
BSC: Good Implementation
   Expresses an organization's mission and strategy
       the links among the various perspectives that describe how strategy will
        be implemented
   Captures both leading and lagging measures
   Commitment and leadership from top management
   Communicates strategy to employees
       Impact at individual level
   Motivate and evaluate performance
       Encourage actions that eventually result in improvements in
        financial performance
BSC: Pitfalls of Implementation
   Design factors:
       Too few measures in the scorecard
       Too many measures
          Attention is diffused, and insufficient attention is given to those few
           measures that make the greatest impact
       The drivers in the Internal and Learning & Growth perspectives don't link
        to the desired outcomes in the Financial and Customer perspective
   Management:
       No support from top down
       Treated as a one-time event
       Treated as a systems project rather than as a management project
       Responsibilities don't filter down
   Doctor’s Associates Inc. (DAI), the owner of the
    SUBWAY® System, is a privately held company
    with its founder, Fred DeLuca, serving as President.
    The corporate headquarters is located in Milford,
    Connecticut and employs more than 600. Subway
    has built its business on its strategic mission. That
    mission is to provide fresh, healthy food quickly
    while responding to customers need for variety
    and convenience.
     Subway: Context

        Private Co. named Doctors’ Associates Inc.
        Headquartered in Milford Conn.
        Franchisee/Franchisor structure
        25,000 locations in 83 countries
        $9.05 Billion sales worldwide
        Second larges fast food franchise in the world
     Subway: Strategy

        Provides Nutrition
          Fresh
          Quick
          Healthy – e.g. fat free success; Jared Fogle

        Customer Needs
          Variety – e.g. Kosher and Halal locations; seasoned bread
          Convenience – 25,000 locations ; 5000 non traditional
        Growth as largest fast food franchise in every market.
Subway: Balanced Scorecard
Perspective         Strategic Objective(s)   Measure   Tools to Measure



Internal Business

Learning & Growth
Subway: Issues

   Issues –
     Franchises      have complained that
      a   high turnover in staff has resulted in
              slower service,
              errors at the cash register
       the    need for a more streamlined training program.
Subway: Issues

   Issues –
     In   the franchisees,
       the cost of food is not consistent with the amount of product
        sold consequently franchisees
       need some mechanism for determining if food is spoiled,
        wasted, stolen, etc. by employees.
Subway: Issues

   Issues –
     Customers    have expressed that they would like more
       products they consume
       options for ordering.

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