The Midwest Consulting Group (MCG) helps companies build balanced scorecards. As part of itsmarketing efforts, MCG conducts an annual balanced scorecard workshop for prospective clients. AsMCG’s newest employee, your boss has asked you to participate in this year’s workshop by explainingto attendees how a company’s strategy determines the measures that are appropriate for its balancedscorecard. Your boss has provided you with the excerpts below from the annual reports of two currentMCG clients. She has asked you to use these excerpts in your portion of the workshop.Excerpt from Applied Pharmaceuticals’ annual report:The keys to our business are consistent and timely new product introductions and manufacturingprocess integrity. The new product introduction side of the equation is a function of research andd evelopment (R&D) yield (e.g., the number of marketable drug compounds created relative to thetotal number of potential compounds pursued). We seek to optimize our R&D yield and first-tom arket capability by investing in state-of-the-art technology, hiring the highest possible percentageof the “best and the brightest” engineers that we pursue, and providing world-class training to thoseengineers. Manufacturing process integrity is all about establishing world-class quality specificationsand then relentlessly engaging in prevention and appraisal activities to minimize defect rates. Ourcustomers must have an awareness of and respect for our brand image of being “first to market andfirst in quality.” If we deliver on this pledge to our customers, then our financial goal of increasing ourreturn on stockholders’ equity should take care of itself.Excerpt from Destination Resorts International’s annual report:Our business succeeds or fails based on the quality of the service that our front-line employees provide to customers. Therefore, it is imperative that we strive to maintain high employee morale andminimize employee turnover. In addition, it is critical that we train our employees to use technologyto create one seamless worldwide experience for our repeat customers. Once an employee enters acustomer preference (e.g., provide two extra pillows in the room, deliver fresh brewed coffee to theroom at 8:00 a.m., etc.) into our database, our worldwide workforce strives to ensure that a customerwill never need to repeat it at any of our destination resorts. If we properly train and retain a motivatedworkforce, we should see continuous improvement in our percentage of error-free repeat customercheck-ins, the time taken to resolve customer complaints, and our independently assessed room cleanliness. This in turn should drive improvement in our customer retention, which is the key to meetingour revenue growth goals.Required:1. Based on the excerpts above, compare and contrast the strategies of Applied Pharmaceuticals andDestination Resorts International.2. Select balanced scorecard measures for each company and link the scorecard measures using theframework from Exhibit 10–8. Use arrows to show the causal links between the performance measuresand show whether the performance measure should increase or decrease over time. Feel free to createmeasures that may not be specifically mentioned in the chapter, but nonetheless make sense given thestrategic goals of each company
The Midwest Consulting Group (MCG) helps companies build balanced scorecards. As part of its
marketing efforts, MCG conducts an annual balanced scorecard workshop for prospective clients. As
MCG’s newest employee, your boss has asked you to participate in this year’s workshop by explaining
to attendees how a company’s strategy determines the measures that are appropriate for its balanced
scorecard. Your boss has provided you with the excerpts below from the annual reports of two current
MCG clients. She has asked you to use these excerpts in your portion of the workshop.
Excerpt from Applied Pharmaceuticals’ annual report:
The keys to our business are consistent and timely new product introductions and manufacturing
process integrity. The new product introduction side of the equation is a function of research and
d evelopment (R&D) yield (e.g., the number of marketable drug compounds created relative to the
total number of potential compounds pursued). We seek to optimize our R&D yield and first-tom arket capability by investing in state-of-the-art technology, hiring the highest possible percentage
of the “best and the brightest” engineers that we pursue, and providing world-class training to those
engineers. Manufacturing process integrity is all about establishing world-class quality specifications
and then relentlessly engaging in prevention and appraisal activities to minimize defect rates. Our
customers must have an awareness of and respect for our brand image of being “first to market and
first in quality.” If we deliver on this pledge to our customers, then our financial goal of increasing our
return on
Excerpt from Destination Resorts International’s annual report:
Our business succeeds or fails based on the quality of the service that our front-line employees provide to customers. Therefore, it is imperative that we strive to maintain high employee morale and
minimize employee turnover. In addition, it is critical that we train our employees to use technology
to create one seamless worldwide experience for our repeat customers. Once an employee enters a
customer preference (e.g., provide two extra pillows in the room, deliver fresh brewed coffee to the
room at 8:00 a.m., etc.) into our database, our worldwide workforce strives to ensure that a customer
will never need to repeat it at any of our destination resorts. If we properly train and retain a motivated
workforce, we should see continuous improvement in our percentage of error-free repeat customer
check-ins, the time taken to resolve customer complaints, and our independently assessed room cleanliness. This in turn should drive improvement in our customer retention, which is the key to meeting
our revenue growth goals.
Required:
1. Based on the excerpts above, compare and contrast the strategies of Applied Pharmaceuticals and
Destination Resorts International.
2. Select balanced scorecard measures for each company and link the scorecard measures using the
framework from Exhibit 10–8. Use arrows to show the causal links between the performance measures
and show whether the performance measure should increase or decrease over time. Feel free to create
measures that may not be specifically mentioned in the chapter, but nonetheless make sense given the
strategic goals of each company
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
