CH 12 case study ACC 232 NAME CH 12 Case Study Workbook AP-8B on pg 335 and Workbook CT-1 on pg 337 AP-8B Balanced Scorecard (original) Objectives KPI (Key Performance Indicator) Financial Perspective...

CH 12 case study
    ACC 232                NAME
    CH 12 Case Study
    Workbook AP-8B on pg 335 and
    Workbook CT-1 on pg 337
    AP-8B
    Balanced Scorecard (original)        Objectives    KPI
(Key Performance Indicator)
    Financial Perspective
        1    Cash flow    Cash received
        2    Increase gross margin    Gross Margin
    Customer Perspective
        3    Improve time to market    Time to get a new product to market
        4    Customer returns    Improve customer satisfaction
    Internal Processes Perspective
        5    Improve employee performance    Reduce order e
ors
        6    Reduce reorder time    Time taken to place an orde
    Learning and Growth Perspective
        7    Improve employee retention    Number of employees with long service
        8    Empower workforce    Number of line managers
    a) Is Bricks and Mortar company following a cost-leadership or differention strategy? Support your answer.
    b) You have recently been hired as a consultant for Bricks and Mortar Company. Identify any problems with its cu
ent balances scorecard.
    Note: there are areas for improvement with all 8 items above.
    c) Update Chuck's Balanced Scorecard using your detailed responses from part b above.
    Balanced Scorecard (updated)        Objectives    KPI
(Key Performance Indicator)
    Financial Perspective
        1
        2
    Customer Perspective
        3
    Internal Processes Perspective
        4
        5
    Learning and Growth Perspective
        6
        7
        8
    CT-1
    Objectives        KPI
(Key Performance Indicator)    Target Performance
for 2019    Actual Performance
for 2019
    Financial Perspective
    Increase profits        Gross profit margin    20%    35%
            Return on equity    15%    16%
    Customer Perspective
    Customer satisfaction        Retention rate    75%    85%
    Market share        Market share of total    8%    10%
    Internal Processes Perspective
    Improve product quality        Defect rate    4    2
    Improve processes        Number of major improvements in manufacturing process    4    4
    Learning and Growth Perspective
    Employee empowerment         Percentage of employee suggestions implemented    25%    30%
            Employee satisfaction rating    7    9
    Required: Using the information on their balanced scorecard, explain how its financial performance improved in the past year.

Chapter 12Strategy and Sustainability
335
AP-8b LO XXXXXXXXXX
Chuck Waylon is the owner of a manufacturing company called Bricks and Mortar. Bricks and Mortar sells
composite building materials. The company’s competitive strategy is to offer reasonably-priced quality
composite building materials that are made using environmentally-sensitive production processes. Similar
products sell for higher prices. Chuck created a balanced scorecard for Bricks and Mortar for the first time.
  Objectives KPi
Financial Perspective
  Cash flow Cash received
  Increase gross margin Gross margin
Customer Perspective
  Improve time to market Time to get a new product to market
  Customer returns Improve customer satisfaction
internal Processes Perspective
  Improve employee performance Reduce order e
ors
  Reduce reorder time Time taken to place an orde
learning and growth Perspective
  Improve employee retention Number of employees with long service
  Empower workforce Number of line managers
equired
a) Is Bricks and Mortar following a cost-leadership or differentiation strategy? Support your answer.
) You have been recently hired as a consultant for Bricks and Mortar. Identify any problems with its cu
ent
alanced scorecard.
Chapter 12 Strategy and Sustainability
336
c) Update Chuck’s balanced scorecard and identify both the e
ors you identified in part b) and suggest a
co
ection. Ignore target and actual performance.
Objectives KPi
inco
ect Co
ect inco
ect Co
ect
Financial Perspective
Customer Perspective
internal Processes Perspective
   
     
learning and growth Perspective
   

Chapter 12Strategy and Sustainability
337
Critical thinking
Ct-1 LO 2
Freedmen Gort Company manufactures auto parts. In just one year, Freedmen went from a net profit of
$20,000 to $35,000. The company provides the following balanced scorecard:
target Performance
for 2019
Actual Performance
for 2019
Financial Perspective
Increase profits Gross profit margin 20% 35%
Return on equity 15% 16%
Customer Perspective
Customer satisfaction Retention rate 75% 85%
Market share Market share of total 8% 10%
internal Processes Perspective
Improve product quality Defect rate 4 2
Improve processes
Number of major improve-
ments in manufacturing
processes
4 4
learning and growth Perspective
Employee empowerment Percentage of employee sug-gestions implemented 25% 30%
Employee satisfaction rating 7 9
Using the information on their balanced scorecard, explain how its financial performance improved in the
past year.