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SUBWAY 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 www.deloitte.ca/campus March 23rd PWC Information session 12:45pm Wednesday March 21st in SCHW190 www.pwcbrilliantfutures.ca KPMG www.kpmg.ca/fastforward 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 (BSC) 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 Perspective Balanced Scorecard Strategy Map Objective Measure Target Strategic Theme: Internal Product Development Initiative • Grow Revenue • Annual Revenue +25% • xx Financial from new Growth Revenue products Growth • Percent Revenues 30% • xx from New Products • Satisfy • Customer Retention 80% • Relationship Customer Customer Needs Management Innovative for State-of-Art Program Products Capabilities • Share of Account 40% • Gain Sharing Program • Accelerate New • Product Functionality #1 in • University Liaison/ World Class Product indy. Technology Transfer Internal Internal Product Development Developmen • Time to Market t 9 mos. • Development Cycle Time Reengineering • Acquire, • Specialized 100% • Competency Model Develop and Competency • New Hiring Program Knowledge Stable 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 10 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 11 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 locations Growth as largest fast food franchise in every market. Subway: Balanced Scorecard Perspective Strategic Objective(s) Measure Tools to Measure Financial Customer 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 variety: products they consume options for ordering.
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