Strategy simulation the balanced scorecard how to win

Strategy Simulation 1

MBA-521-81A: Decisions, Analysis, & Perf. - Summer 2019

Week 4: Simulation Strategy Team 3: Jerika Avington, Burnell Lykes Knight,

and Molly Webster

Champlain College

Due Date: June 1st, 2019

Balance Scorecard

After reading the case study of Delta/Signal Corp., our team took a few main takeaways that contributed to our strategy for the simulation. First, we decided to go with economy cars as our segment due to the large market share they had. Though the market was saturated in this industry, we felt we had a stronghold to produce reliable cars with luxury features that would outlast other manufacturers because of the quality parts. We also considered longevity and fuel prices for the compact cars. As a large company, we planned to leverage our size to ensure we were manufacturing the highest quality parts at the lowest cost, evaluating outsourcing and offshore options to constantly re-assess and stay ahead of the market. Our Administrative Outsourcing Program strategy in Internal Processes was important for us to continue offering quality products at affordable prices and ensure we stayed ahead of our competitors. One of our group top priorities was customer satisfaction, while the other was training the employees properly which in turn would keep the customers satisfied. We also invested in the R&D Initiative: Wear-Resistant Parts to ensure we retained our quality reputation and invested in the Warranty Data Analysis Program to ensure we were focused in the right areas and to highlight any opportunities for quality improvement to reduce long-term expenses.

After investing heavily in the actual quality of the product, we agreed that it was important to share with the public what our company values and how we were acting upon those values. The “High Quality” Trade Marketing campaign was leveraged to not only share new information with the public, but also to encourage our happy customers to spread the word about the value we offer. The R&D Partnership Initiative was chosen to ensure we were using best practices consistently and sharing information to make our team better and positively serve the customer. For learning and growth, we selected a few initiatives based on making sure we have the right people doing the right work, that they are effectively trained, and that they have the tools they need to be successful. Consequently, we selected Employee Recruiting Initiatives because we believe that happy and well-taken-care-of employees do the best work, and that will directly impact the value and service our customers receive. IT Training: Collaborative R&D Systems was selected to improve our R&D processes and provide a better product to the customer, and R&D Equipment upgrades were made to ensure the processes surrounding manufacturing our final product were optimized and that our employees had the right tools to make their jobs easier. We focused on these strategies to ensure customer experience was at the forefront of our decision-making, and we trusted that if we made the best decisions for the customer, the company would thrive, and stock prices would follow. We took a value-based management approach in identifying the goals for the company and making business decisions to promote those metrics.

Strategic Analysis

Most strategies we selected resulted in positive impacts to our metrics, but a few did not have any impact two internal process strategies and one learning & growth strategy. We felt after reading the case study that it was important that we remain consistent with our strategies to not revert to previous results and to see the real, transparent results of our strategies after all periods. If we had been able to view results after each period as in real world business, we may have made some adjustments to our inputs, but since we were unable to see our results until the end of the scenario, we selected to keep our inputs constant. The Balanced Scorecard (BSC) Objectives Shared with Strategic Customers, Department Budgets Linked to Balanced Scorecard Objectives, Managers Trained in Multi-Company Team Management and Customer Actions Via Data Exchange Portal all did not impact our metrics positively or negatively. Asset Turnover, Sales, Cumulative Earnings Per Share (From Base Year), Customers Who Would Recommend Company, Job Candidates Rate Company “Desirable” Employer, and R&D Department Using Latest Sharing Systems all increased and positively impacted metrics. A couple important improvements to note were Sales (increased from $480M to $659.8M), Customers Who Would Recommend Company (increased from 30% to 69%), and Job Candidates Rate Company “Desirable” Employer (increased from 30% to 74%). These are all positive indications of successful strategy implementation.

Financial Results

With finance, our strategies resulted in our cost of sales being reduced by 2.09%, and gross margin increasing 2.09%. Our operating income increased 1.62% and Return on Equity increased 3.8%. The Stock Market Value Per Share increased from $40.00 to $68.15. While this is not an astronomical increase, we felt good about our results positively impacting the business and chose to stay under budget with our implemented strategies which we feel allowed us to focus on the most important objectives and not over-crowd the business with too many goals. With dividends increasing from $0.00 to $2.25 per share, we felt we had looked after our stockholders by making the best decisions we saw available to us for the company. The value-based management we implemented allowed the business to improve its figures by reducing debt, increasing equity and reflecting our vision to put the customer first and provide quality always.

Conclusion

This simulation gave our team the opportunity to theorize and put into effect strategic methods that would enhance our organization. The sole purpose of the balance scorecard is to guarantee that the organization’s vision and mission line up with the methodology, all while under a strict budget. Observing the metrics throughout the simulation was key for our group to ensure that our strategy lined up with the strategic management. Our initial decisions proved to be significant overall improvement.

References

Narayanan, V. G., Brem, L., & Packard, M. (2013, July 8). Delta/Signal Corp. – Limelight Networks. Retrieved May 29, 2019, from http://harvardbp.vo.llnwd.net/o36/hep/sim/bsc_2014/Delta-Signal_Case.pdf