Chapter 12, Problem 12.33P

Balanced scorecard and strategy. Scott Company manufactures a DVD player called Orlicon. The company sells the player to discount stores throughout the country. This player is significantly less expensive than similar products sold by Scott’s competitors, but the Orlicon offers just DVD playback, compared with DVD and Blu-ray playback offered by competitor Nomad Manufacturing. Furthermore, the Orlicon has experienced production problems that have resulted in significant rework costs. Nomad’s model has an excellent reputation for quality.

1. 1. Draw a simple customer preference map for Scott and Nomad using the attributes of price, quality, and playback features. Use the format of Figure 12-1.

Required

1. 2. Is Scott’s current strategy that of product differentiation or cost leadership?
2. 3. Scott would like to improve quality and decrease costs by improving processes and training workers to reduce rework. Scott’s managers believe the increased quality will increase sales. Draw a strategy map as in Figure 12-2 describing the cause-and-effect relationships among the strategic objectives you would expect to see. Present at least two strategic objectives you would expect to see under each balanced scorecard perspective. Identify what you believe are any (a) strong ties, (b) focal points, (c) trigger points, and (d) distinctive objectives. Comment on your structural analysis of the strategy map.
3. 4. For each strategic objective, suggest a measure you would recommend in Scott’s balanced scorecard.