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
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Question
Q.Is there a cause-and-effect linkage between improvements in the measures in the internal-businessprocess perspective and the measure in the customer perspective? That is, would you add other measures to the internal-business-process perspective or the customer perspective? Why or why not? 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%
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