Question

Case Study 4:

Zoom Zoom Ltd. which is located in County Antrim, designs, manufactures and sells a wide range of award- winning digital cameras to electrical retailers located primarily in both Ireland and the United Kingdom. The firm's newly appointed Managing Director, Ms. Kate Brown (who previously worked in the not-for- profit sector), has been tasked by Zoom’s Board of Directors with devising and implementing a strategy that will initially halt rapidly increasing losses; prior to achieving profitability and ultimately an increase in market share. The market segment within which Zoom competes has become increasingly competitive in recent years due to the proliferation of mobile devices capable of capturing high resolution images. Having familiarised herself with the culture and ethos of Zoom, by speaking with a small number of junior operational employees, Ms. Brown has decided that in the future, the firm will pursue a cost leadership strategy, where Zoom will outperform its competitors by producing digital cameras at the lowest possible cost. Subsequently, Ms. Brown developed the following mission statement that she expects Zoom to adhere to: " “Zoom will deliver superior digital cameras which exceed customer expectations at competitive prices. In terms of selecting the appropriate performance measures needed to ensure the achievement of Zoom's strategy and mission statement, Ms. Brown feels that (given her remit from the Board of Directors is primarily quantitative) a series of key performance indicators (i.e. KPIs) should suffice. Specifically, Ms. Brown is considering the use of some financial metrics, supported by a small number of carefully chosen qualitative measures. Although Ms. Brown is aware that many firms now utilise the Balanced Scorecard as either a performance measurement system and / or as one element of a strategic control system, she feels that Zoom is not currently an appropriate environment within which to successfully implement this particular management tool.

CASE STUDY 4 QUESTIONS

QUESTION 1: Apart from Zoom Ltd.'s % market share, outline one (1) financial metric and two (2) qualitative measures that you think Ms. Brown should focus on as part of her efforts to increase Zoom Ltd.'s market share in the future. Briefly explain the logic underpinning each of your choices.'

QUESTION 2: Suggest and explain two (2) reasons as to why the immediate implementation of the Balanced Scorecard as a performance measurement system within Zoom Ltd. may not be appropriate.

QUESTION 3: Advise Ms. Brown as to how the implementation of the Balanced Scorecard within Zoom Ltd., as one element of their system of strategic controls, could potentially be advantageous.

Answer 1

A. One financial metric that that Ms. Brown should focus on for her efforts to increa the Zoom market share are:-

Growth of net income in income statement is one of the important financial metric to assess the market share of zoom company.

Two quality measures which I think Ms. Brown must focus on are:-

A. Competitors strategy as what kind of product quality and at which price the competitors are delivering their product is necessary for Zoom company to get its market share back.

B. Technical superiority is another qualitative factor which affects the profitability and market share of a company as if the technology is outdated it will work as a big disadvantage for the company.

2. Two reasons which will highlight that why scorecard is not an appropriate method are:-

A. It can get complicated as the company may not be able to use it effectively.

B. It requires too much of data taht it will take too much time to get a conclusion that it all get wasted.

3. Advantage of using balance scorecard :-

A. It will improve the strategic implementation of plans.

B. It will help the management in understanding the points where it needs supervision.

C. It helps in making comparison of performances at two different time periods.