Essay on Balance Scorecard

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Essay on Balance Scorecard

Introduction

Artisan baking, that is, production of bread and other baking products in limited quantities using conventional methods is being outweighed by mass production of breads and other baking products by big companies.Nonetheless, there are companies in Canada in the baking industry that still value artisan baking such as European Bread Bakery. However, given the limited production of their products and fierce competition by companies producing bread and other baking products in bulk, bakeries such as European Bread need to have formidable strategies and develop balanced scorecards that will enable them continue operation and expand in the near future.

Background: Industry and Corporate Analysis

Industry Analysis-essay on Balance Scorecard

The Canadian baking industry comprises of companies that produce bread, pastries, cakes and similar perishable bakery products (Barratt, 2013). Bread was initially produced at home in Canada. However, as communities emerged, small bakeries gradually came up and evolved into the major baking establishments evident in today’s Canadian baking industry (Barratt, 2013). In the last forty years, incessant changes have occurred in the baking industry. More specifically, contemporary technology has resulted in an increase in large and more intricate production operations (Barratt, 2013). This increase in production has led to excess production capacity in numerous parts of the nation. In addition, improvements in rail, road and air transport systems have fostered distribution capability. Finally, preservatives and effective novel packaging systems and materials have vastly extended the shelf life of many bakery products (Government of Canada, 2013). Therefore, a contemporary wholesale baking company in Canada can easily supply many products to markets near and far from the plants. However, throughout the nation, small bakeries or community-based bakeries are also emerging at an increasing rate.

The main competitors of European Bread Bakery are experiencing rapid growth by capitalizing on the wholesome appeal of fresh baked loaves of bread baked using natural ingredients and with minimal or no preservatives. However, the bakery industry in Canada still remains highly fragmented with numerous products and players. This is evident in the launches of new products in the Canadian baking industry apart from bread by various companies (Government of Canada, 2013). Even in the category of bread, new launches are being made in terms of bread with discordant nutritional contents. The major claim in the baking industry is that novel bakery products are mostly focusing on natural ingredients, dietary suitability and less or no elements (Government of Canada, 2013). Moreover, as the number of novel products with new packaging increases in the market, the number of bakery products claiming to have environmentally friendly packaging increases by double figure every year (Government of Canada, 2013). This means that consumers are continuously making healthy eating choices and this involves the products consumed by customers from the baking industry in Canada. More and more bakeries in Canada are focusing on breads and other products baked from natural ingredients and with minimal or no preservatives. In addition, companies are not only focusing on environmentally friendly packaging but also on displaying nutritional content on packages so as to inform consumers of the quality of the products (Government of Canada, 2013).

Company Analysis (European Breads Bakery)Essay on Balance Scorecard

Bread has been a staple food in the diets of many individuals for immense centuries. Since the industrial revolution, it has become common to produce bread in big factories. However, most of the breads from these big factories are the products of unnatural ingredients and preservatives. European Breads Bakery does not just follow the recipes for making bread, but does so while honoring the traditions of artisan baking (European Breads Bakery, 2018).

The bread produced by European Breads Bakery in Canada stands out from the competition due to its outstanding and unique quality. Most of the breads from European Breads Bakery are European in style, including Miche, Sourdough, and Sourdough Rye among others (European Breads Bakery, 2018). Moreover, the methods utilized in making these breads create truly delicious breads devoid of unnatural ingredients. Bakers at European Breads Bakery use their expertise to test the fermentation, as well as, mould, knead and shape the breads so as to ensure they are of top quality (European Breads Bakery, 2018).

The vision of European Bread is to get more and more communities to have neighborhood artisan bakeries of their own. Consequently, these communities will bring the experience and enjoyment of local and handmade products such as the breads produced by European Breads Bakery within minutes of their front doors (European Breads Bakery, 2018).

Business mission and strategic corporate goals

Mission Statement-essay on Balance Scorecard

“Natural Products with Quality and Integrity” is mission statement of European Breads Bakery and its commitment to finding the best natural ingredients to use in making different types of breads. Through this mission, European Breads Bakery aims to be a socially responsible company and provide high quality products for its customers by making placing immense effort in utilizing natural ingredients to emphasize its commitment in making healthy baking products at an affordable price.

Corporate strategic goals

Based on the operations of European Bread, as well as, industry and corporate analysis on the bakery industry in Canada, the following are the corporate level strategic goals that European Breads Bakery seeks to achieve:

To continue producing breads with completely natural ingredients and free from chemicals and preservatives with the aim of improving consumer awareness with regard to the benefits and prominence of consuming naturally-raised produce.

Enhance the utilization of environmentally friendly packaging and nutritional content displayed on the packaging to provide valuable information regarding the quality of the bread for customers to read while continuing to incur only minimal expenses or expenditure of the company’s budget in marketing European Breads Bakery’s products and other advertising expenses.

Training and educating the staff at European Breads Bakery and the communities regarding quality bread production so as to bring the experience and enjoyment of local and handmade products such as the breads produced by the bakery to everyone in Canada.

Become the preferred supplier of bread and other products in partnership with consumers so as to foster consumer satisfaction and novel relationships with food suppliers.

Each of these corporate level strategic goals helps European Breads Bakery maintain its main focus or strategy of running a business that formulates a healthy and memorable experience for the customers and the environment by producing breads with completely natural ingredients and free from chemicals and preservatives, with environmentally friendly packaging.

Introduction to Balance Scorecard

This balanced scorecard translates the mission and strategies of European Breads Bakery into objectives and measures. In general, this balanced scorecard has four perspectives as stated by Pienaar and Penzhorn (2000), that is, the learning and growth perspective focusing on innovation and employees, the customer perspective focusing on prevailing and novel customers, the internal business process perspective focusing on what European Bread must excel at internally and the financial perspective focusing on financial results.

Major Components-essay on Balance Scorecard

Customer Perspective

This perspective focuses on what European Bread must do to attract new customers and retain existing customers, what is important and the perspective of the customer to attain the overall mission.

Objective 1: Improve the image of the company by marketing new all natural and environmental products.

Target: European Breads Bakery’s target is to improve customer recognition of novel product offerings.

Measure: The growth of product sales by ten percent relative to the conventional ingredients and bread types.

Initiative: Perform or undertake surveys to gain valuable information regarding the reception of the products by the customers.

Objective 2: Enhance the overall customer service.

Target: Make European Bread’s products readily available to consumers and increase the positive feedback from loyal consumers.

Measure: Improvement in overall customer service will be determined by an increase in customer feedback by twenty-five percent over one year.

Initiative: Put into place or enforce an employee training program that is focused on customer service.

Internal Business Processes Perspective-essay on Balance Scorecard

This perspective focuses on what European Bread must do to excel internally and what the company must do to meet the needs and wants of consumers described in the customer perspective above.

Objective 1: Improve the speed of ordering European Breads’ products with the inclusion and improvement of automation and other technology-facilitated services.

Target: Eradicate the need for full time staff and decrease the time used to prepare bread and other products, as well as, time utilized to get the orders of customers in European Bread by automating the cooking process.

Measure: Decrease in total costs by six percent over two years.

Initiative: First calculate or determine the long-term return on investment (ROI) of the investment in automation so as to ensure the automation process does not cripple European Bread.

Objective 2: Streamline the payments by consumers online and through applications using computers and mobile phones.

Target: To be able to permit consumers to pay for the products purchased from European Bread using their computers and mobile phones.

Measure: Implementation of the computer and mobile POS systems at twenty-four percent of the location of the company.

Initiative: Conduct a survey on consumer preferences regarding mobile payments.

Learning and Growth Perspective-essay on Balance Scorecard

This perspective focuses on innovation and employees and how European Breads Bakery is improving its ability to enhance, innovate and learn so as to facilitate and support success with the critical processes and operations described in the internal business processes perspective.

Objective 1: Improve the corporate culture of European Breads Bakery using social media.

Target: To be able to facilitate greater communication at all levels and jurisdictions of the company.

Measure: Attain twenty-four percent participation by employees and consumers on the different European Bread social media platforms and conversations facilitated through these social networking sites.

Initiative: Track and monitor the social media platforms to ensure that the conversations conducted on these social media platforms are not only beneficial and constructive but also refrain from tainting the image of the company.

Objective 2: Provide various novel opportunities for advancement and personal and operations improvement within European Breads Bakery.

Target: To be able to foster more internal employees to middle manager positions for the employees.

Measure: The ability to track and monitor the progression tenure of the employees in the management hierarchy of European Breads Bakery.

Initiative: Make available or recommend a training programs for employees who seek or desire management positions.

Financial Perspective-essay on Balance Scorecard

This perspective focuses on the financial results of European Breads Bakery.

Objective 1: Reduce the supply chain costs for the products of European Breads Bakery.

Target: To be able to decrease supply chain costs in local, regional and national markets by four percent in the next two years.

Measure: Success of this objective should be signified by higher operating margins after in the inclusion of all revenue and deduction of all expenses.

Initiative: European Breads Bakery should invest in long-term solutions to supply chain management to be able to render the company a going concern even in periods of high costs.

Objective 2: Improve the customer base of the company by expanding the product variety or diversifying the portfolio of products offered by European Breads Bakery.

Target: To be able to improve the domestic revenue by ten percent with a novel product line over four years.

Measure: A growth trend of approximately 0.5% in local, regional and national sales per quarter of the financial year.

Initiative: European Breads Bakery can test novel products in certain locations so as to determine their nationwide viability.

Key Performance Indicators

Customer Perspective-essay on Balance Scorecard

Product availability and response times

Use of various communication tools and technologies to foster customer service

Satisfaction of customers through surveys and number of complaints by customers

Internal Business Process Perspective

Improved innovation and quality

Number of reworks and errors in production

Quantity of non-compliance reporting

Decreased cycle times

Enhanced cost-efficiency of the business processes

Benchmark comparisons

Learning and Growth Perspective

Staff or employee productivity and improvement

Number of employees trained in customer services skills and novel technology

Financial Perspectives

Economic Values Added measure (EVA)

Return on Investment (ROI)

Summary of Report

It is important to note that in almost all businesses or companies, strategic initiatives are associated with a particular level of risk. As a well-known brand in British Columbia, it is vital for European Breads Bakery to make considerable efforts in attracting and maintain customers, as well as, safeguarding its image with a new strategic choice or decision. Failing to maintain its good rapport with customers and the communities at large could result in European Breads Bakery failing to proceed with the national growth of the company. Moreover, the corporate goals or strategies outlined in this report require a significant financial investment. However, this investment should be reflected in terms of delivery of long-term value to the owners of European Breads Bakery. This is particularly prominent in the internal business process perspective given that it directly affects the operational success of European Breads Bakery. Thus, a strategic initiative or goal in this perspective should be formulated for the purpose of fostering the long-term sustainability of the nation.

Each perspective on this balanced scorecard for European Breads Bakery has unique strategic implications. For instance, the strategic objectives of the owners of European Breads Bakery are significantly discordant from those of the customers and employees. As such, the managers in charged with managing European Bread’s operations and employing a strategic plan must find middle ground of the ideal link between the objectives of each perspective outlined on the balanced scorecard. Each perspective and its objectives, targets, measures and risk mitigation initiatives play a prominent role in the fulfillment of the mission of the company, achieving the selected strategy and the success of European Bread at large. Thus, it is critical that every perspective is taken into contemplation during the process. Ultimately, this balanced scorecard will ensure that the strategy fulfills the goals and values of European Bread.

Essay on Balance Scorecard

Appendix

Strategic Mix for the strategic theme of “Increased Production and Sales of Natural Products with Quality and Integrity

Strategic Theme: Increased Production and Sales of Natural Products with Quality and Integrity
Perspectives Objectives Target Measure Initiative
Customer Improve the image of the company by marketing new all natural and environmental friendly products. To improve customer recognition of novel product offerings Growth of product sales by ten percent relative to the conventional ingredients and bread types.

 

Perform or undertake surveys to gain valuable information regarding the reception of the products by the customers.
Enhance the overall customer service. Make European Breads Bakery’s products readily available to consumers and increase the positive feedback from loyal consumers. Improvement in overall customer service will be determined by an increase in customer feedback by twenty-five percent over one year. Put into place or enforce an employee training program that is focused on customer service.
Internal Business Process Improve the speed of ordering European Breads Bakery’s products with the inclusion and improvement of automation and other technology-facilitated services. Eradicate the need for full time staff and decrease the time used to prepare bread and other products, as well as, time utilized to get the orders of customers in European Bread by automating the cooking process. Decrease in total costs by six percent over two years.

 

First calculate or determine the long-term return on investment (ROI) of the investment in automation so as to ensure the automation process does not cripple European Bread.
Streamline the payments by consumers online and through applications using computers and mobile phones. To be able to permit consumers to pay for the products purchased from European Bread using their computers and mobile phones. Implementation of the computer and mobile POS systems at twenty-four percent of the location of the company. Conduct a survey on consumer preferences regarding mobile payments.
Learning and Growth Improve the corporate culture of European Breads Bakery using social media. To be able to facilitate greater communication at all levels and jurisdictions of the company. Attain twenty-four percent participation by employees and consumers on the different European Bread social media platforms and conversations facilitated through these social networking sites. Track and monitor the social media platforms to ensure that the conversations conducted on these social media platforms are not only beneficial and constructive but also refrain from tainting the image of the company.
Provide various novel opportunities for advancement and personal and operations improvement within European Breads Bakery. To be able to foster more internal employees to middle manager positions for the employees. The ability to track and monitor the progression tenure of the employees in the management hierarchy of European Bread. Make available or recommend a training programs for employees who seek or desire management positions.
Financial Reduce the supply chain costs for the products of European Breads Bakery. To be able to decrease supply chain costs in local, regional and national markets by four percent in the next two years. Success of this objective should be signified by higher operating margins after in the inclusion of all revenue and deduction of all expenses. Invest in long-term solutions to supply chain management to be able to render the company a going concern even in periods of high costs.
Improve the customer base of the company by expanding the product variety or diversifying the portfolio of products offered by European Breads Bakery. To be able to improve the domestic revenue by ten percent with a novel product line over four years. A growth trend of approximately 0.5% in local, regional and national sales per quarter of the financial year. Test novel products in certain locations so as to determine their nationwide viability.

 

 

 

 

Bibliography

Barratt, R. (2013). Baking Industry. The Canadian Encyclopedia. Retrieved 7 April 2018, from http://www.thecanadianencyclopedia.ca/en/article/baking-industry/

European Breads Bakery. (2018). About Us. European Breads Bakery. Retrieved 7 April 2018, from http://www.europeanbreads.com/about-us

Government of Canada. (2013). Consumer Trends – Bakery Products in Canada – Agriculture and Agri-Food Canada (AAFC). Www5.agr.gc.ca. Retrieved 7 April 2018, from http://www5.agr.gc.ca/eng/industry-markets-and-trade/international-agri-food-market-intelligence/canada/consumer-trends-bakery-products-in-canada/?id=1410083148462

Pienaar, H., & Penzhorn, C. (2000). Using the Balanced Scorecard to Facilitate Strategic Management at an Academic Information Service. Libri, 50(3). http://dx.doi.org/10.1515/libr.2000.202