Internal Code: 1HAAB
The objective of this assessment is to display your group’s knowledge and understanding of the balanced scorecard as a strategic planning and management system and how to adopt it within a business environment.
Your group is asked by a consulting firm – ‘We will make your business great again’- to design a strategic management system for a business specialising in retailing home improvement and outdoor living products called – ‘The Business’.
‘The Business’ was recently acquired by agrocery and liquor retail chain, traded on the Australian Stock Exchange. You were told that though ‘The Business’ made A$1 billion in sales last year, its operating income was nil, and the new manager, John Clarkson, was given five years to improve the operation of ‘The Business’. The 5-year goals for ‘The Business’ are:
Currently, the business owns 23 stores, mainly in Victoria, New South Wales and Queensland.
However, the parent company will make a financial commitment of $1 billion to improve existing stores and to open 5 more new stores in the next 2 years. Though part of the group, ‘The Business’ will operate as a separate company and its management will be responsible for all decisions in relation to the types of products being sold, the expansion and other activities of carrying on the business.
Background to ‘The Business’ and to the ‘Hardware and building supplies retailers’ industry
Like most of the hardware and home improvement companies, ‘The Business’ is exposed to a range of factors such as price, product range, consumer sentiment, discretionary income, and residential construction activity which all affect demand for hardware and building supplies.
‘The Business’ operates in a highly competitive market. National chain stores such as Bunnings, Mitre 10 and Home Timber & Hardware dominate the market. However, the industry is still fragmented. Most businesses are relatively small, privately operated, employ fewer than 20 staff, and have annual revenue of less than $2 million. The majority of hardware stores are located in New South Wales, Victoria and Queensland, accounting for an estimated 77.2% of industry enterprises. Tasmania, the Northern Territory and the Australian Capital Territory account for only 3.9% of the industry’s hardware stores.
It is forecast that over the next five years, the industry will be growing and thatgrowth will be due to increased residential and commercial construction.
Tip: Strengths and Weaknesses relate to internal matters of a company, whereas Opportunities and Threats relate to external issues such as competitive advantage
In particular you need to:
Tip: you should utilise your SWOT analysis in developing the objectives for ‘The Business’
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