Question

Pete’s Pizza and Pasta is a newly formed chain of pizza and pasta restaurants. The company’s strategy is to grow the brand through franchising and increase market share and profitability for both individual restaurants as well as the entire chain.

Pete, the founder of the chain has given you the following balanced scorecard, which he is confident would help the company achieve his stated strategy. Pete expects to generate income largely through initial franchising fees as well as collecting a percentage of the franchisees’ revenues.

Perspectives	Strategic Objectives	Key performance Indicators
Financial	Increase Company Profitability Optimize Revenue and Expenses	%Net Profit & $Net Cash Flow $Sales to date & $Cost per call
Customer	Maintain high level of customer satisfaction Increase customer profitability Build and improve the customer network	%survey excellent score & %call abandon rate $Revenue per client & $Average new customer acquisition cost #new customers & %market share
Internal Processes	Increase call-hand expertise Improve service delivery	Average call handling time & %scheduling adherence %processes optimized & %active projects running on time and on budget
Learning & Growth	Build a culture that encourages innovation Nurture high performing employees Continuously improve skills and competence	#employment engagement index & #ideas received for new services %employee satisfaction & %employee turnover #training hours per employee & %employee meeting development requirements

Required:
For each of the four balanced scorecard perspectives, please perform the following:

i)     Provide two additional strategic objectives and key performance indicators.

ii)     Discuss, how and why recommended objectives and indicators from Part (i) above will help Pete execute his strategy.

Answer 1

Solution : -

i) Perspectives Strategic Objectives Key Performance indicators

Financial Optimize Assets % Return on assets

Reduction of administrative expense    % administrative expense to sales

Customer Brand awareness # increase interaction on Social media Innovative approach # providing new variety of products

Internal processes Quality optimisation % reducing manufacturing waste

Capacity utilisation # Using of technology to boost efficiency  

Learning & Growth a) Information capital - Database, #Safety systems, #Data protection system.

information systems, networks etc.

b) Organisational capital - Culture,   #Staff engagement,#Corporate culture audits

Leadership,teamwork and knowlegde management

ii) In the Financial perspective, Strategic objectives considered are return on assets and reduction in administrative expenses can be measured through % return on assets which indicates how efficiently a Company can convert the money used to purchase assets into ner income or profits.On the other hand Reduction in administrative expenses leads to increase in net profits or cash flows, which can be used for expansion plans.

In the Customer perspective :- Strategic objectives considered are Creating Brand awarness among trageted customer or market segment through various social media platform or digital media. Another objective to adopt innvotive approach in making new products to retain existing customer and adding new customer.

In the Internal Processes : - Can be achieved through Quality Optimisation which means reduction manufacturing waste, which ultimately reduce manufacturing cost and its environmental friendly. Another objective Capacity utilisation can be achieved through use of technology to increase efficiency and increase production to cater large number of customer.

In the Learning & Growth : - Investing in information capital like in safety systems and Data proctection systems which assist in proctecting confidential data of an Organisation.Another Objective is Organisational capital ,developing good culture and Leadership skills and conducting corporate culture audits to ensure that senior management is held accountable for promoting an environment of intergrity and ethical values.