dalanced scorecard. (R. Kaplan, adapted) Petrocal, Inc., refines gasoline and sells it through its own Petrocal gas stations. On the basis of market research, Petrocal determines that 60% of the overall gaso- line market consists of "service-oriented customers," medium- to high-income individuals who are willing to pay a higher price for gas if the gas stations can provide excellent customer service, such as a clean facility, a convenience store, friendly employees, a quick turnaround, the ability to pay by credit card, and high-octane premium gasoline. The remaining 40% of the overall market are "price shoppers" who look to buy the cheap- est gasoline available. Petrocal's strategy is to focus on the 60% of service-oriented customers. Petrocal's balanced scorecard for 2017 follows. For brevity, the initiatives taken under each objective are omitted. Actual Target Performance Performance Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from príce recovery $80,000,000 $85,000,000 Operating-income changes from growth $60,000,000 $62,000,000 Customer Perspective Increase market share Market share of overall gasoline market 4% 3.8% Internal-Business-Process Perspective Quality index Refinery-reliability index (%) 92 points 93 points Improve gasoline quality Improve refinery performance 91% 91% Ensure gasoline availability Learning-and-Growth Perspective Increase refinery process capability Product-availability index (%) 99% 99.5% Percentage of refinery processes with advanced controls 94% 95%
dalanced scorecard. (R. Kaplan, adapted) Petrocal, Inc., refines gasoline and sells it through its own Petrocal gas stations. On the basis of market research, Petrocal determines that 60% of the overall gaso- line market consists of "service-oriented customers," medium- to high-income individuals who are willing to pay a higher price for gas if the gas stations can provide excellent customer service, such as a clean facility, a convenience store, friendly employees, a quick turnaround, the ability to pay by credit card, and high-octane premium gasoline. The remaining 40% of the overall market are "price shoppers" who look to buy the cheap- est gasoline available. Petrocal's strategy is to focus on the 60% of service-oriented customers. Petrocal's balanced scorecard for 2017 follows. For brevity, the initiatives taken under each objective are omitted. Actual Target Performance Performance Objectives Measures Financial Perspective Increase shareholder value Operating-income changes from príce recovery $80,000,000 $85,000,000 Operating-income changes from growth $60,000,000 $62,000,000 Customer Perspective Increase market share Market share of overall gasoline market 4% 3.8% Internal-Business-Process Perspective Quality index Refinery-reliability index (%) 92 points 93 points Improve gasoline quality Improve refinery performance 91% 91% Ensure gasoline availability Learning-and-Growth Perspective Increase refinery process capability Product-availability index (%) 99% 99.5% Percentage of refinery processes with advanced controls 94% 95%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Q.Do you agree with Petrocal’s decision not to include measures of changes in operating income from productivity improvements under the financial perspective of the balanced scorecard? Explain briefly.
Transcribed Image Text:dalanced scorecard. (R. Kaplan, adapted) Petrocal, Inc., refines gasoline and sells it through its
own Petrocal gas stations. On the basis of market research, Petrocal determines that 60% of the overall gaso-
line market consists of "service-oriented customers," medium- to high-income individuals who are willing to
pay a higher price for gas if the gas stations can provide excellent customer service, such as a clean facility,
a convenience store, friendly employees, a quick turnaround, the ability to pay by credit card, and high-octane
premium gasoline. The remaining 40% of the overall market are "price shoppers" who look to buy the cheap-
est gasoline available. Petrocal's strategy is to focus on the 60% of service-oriented customers. Petrocal's
balanced scorecard for 2017 follows. For brevity, the initiatives taken under each objective are omitted.
Actual
Target
Performance Performance
Objectives
Measures
Financial Perspective
Increase shareholder value
Operating-income changes from
príce recovery
$80,000,000 $85,000,000
Operating-income changes from
growth
$60,000,000 $62,000,000
Customer Perspective
Increase market share
Market share of overall gasoline
market
4%
3.8%
Internal-Business-Process Perspective
Quality index
Refinery-reliability index (%)
92 points
93 points
Improve gasoline quality
Improve refinery performance
91%
91%
Ensure gasoline availability
Learning-and-Growth Perspective
Increase refinery process capability
Product-availability index (%)
99%
99.5%
Percentage of refinery processes
with advanced controls
94%
95%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education