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Bowral Construction Balanced Scorecard

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14 views

Bowral Construction Balanced Scorecard

worksheet

Uploaded by

dizon.ryan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Internal Use #_x000D_

Case 2. Bowral Construction Company


The Extraordinary Accountants (T.E.A.)

Facts:
- house building subsidiary of a large international construction company started making heavy losses after many years of inc
- recession hit and the decline in result expected but worst than anticipated.
- board started to concentrate on external info particularly financial performance of their competitors and economic indicator
- despite increase in annual profits and surpassing the target, still under performing against construction competitors.
- with this, when recession hit the market, it's first companies to suffer.

Economic indicators:
- before the depression house prices had been outstripping disposable income at a rate which was matched only by the per
- growth was unsustainable yet the company and the subsidiary ignored this info when formulating strategy and buying land.
- info on economic indicators forced the subsidiary and the parent to reformulate their corp strategy and objectives and redefi

Identify the niche for housing construction project.


Objective: Regain its market position by considering product, pricing, promotion and place

Strategic Priorities Goal (Strategic Objectives)


Realistic
Increase profit margin increase
in shareholders' value via
Create and launch a new product,
dividend payout
Perspective

technology, environmental matters and


Financial

architectural trends.
To be financially strong

Client satisfaction
Customer Perspective

Preferred contractor or business partner


Gain market positioning
Customer services & customer
positioning

Completion of job on time


Internal Business Process

Cost control
Segmentation
Perspective

Use good quality materials


Market flexibility

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Learning & Growth Perspective


Market growth

Sustainable response to market


need Develop or hire highly skilled and
innovative manpower resources
Determine public needs
Strategic competencies

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ed making heavy losses after many years of increased profits.

nce of their competitors and economic indicators.


rming against construction competitors.

me at a rate which was matched only by the period before the 1970's house price slump.
nfo when formulating strategy and buying land.
ate their corp strategy and objectives and redefine the info set provided to senior executives:

tion and place

Key Performance Measurement Targets


Operating margin >= 30% operating margin
% of dividend growth Top
25% 10 contractors
revenue in the
from new same industry
products in 3
Revenue from new products / services years

No. of defects on handover % scoring at 8/10 or better


No. of customer complaints Zero customer complaints
Market share percentage At leastor50%
Below market
at par share
pricing index with
Pricing index competitor

Extension timeline (no. of days) 5% of original timeline


Labor
No. of cost as % oftargeted
initiatives productatcost
profitable 20-30% labor cost
segments 60% no. of initiatives within a year
Perfect order performance 99% perfect orders

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Disposable personal income index 5-10% annual growth rate

At least 3 years experience in the same


Experienced profile industry
Housing industry demand forecast At least 5% increase in the next 5 years
Competency matrix Percentage scoring

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price slump.

enior executives:

Initiatives
Consider affordable prices to targeted Q1 Q2 Q3 Q4 Results
market
Well designed strategic planning and
management control
Price benchmarking with key competitors

Thorough inspection of the project prior


to handoverresolution to complaints s to
Immediate
complete handover to customer
Launch of competitiveness program

Project Management
Benchmarking Program project
with competitiors'
cost
Promote culture of innovation and
creativeness
Streamline business process & ISO
certification.

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Taking inflation & economic crisis in the


financial programming and evaluating in
consideration

Develop fundamental skills &


competencies and require strict
adherence
On-going to safety and environmental
improvements to construction
Develop fundamental
standards skills &
methods
competenciesbusiness
and administration
and require strict
system.
adherence to safety and environmental
standards

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#

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