BSC Implementation and the Internal Business Process Prospective, 2-3 Pages with table, Starbucks

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BSC Implementation & the Internal Business Process Perspective of STARBUCKS

For Module 3, consider the organization's mission and strategy from the perspective of its internal business processes (from your work on the case, your previous course work, and your background reading, you should be reasonably clear what such business processes are). In this section of the assignment you’ll begin to identify objectives and measures relevant to that perspective. Refer back to this presentation on objectives if you need to.

SLP Assignment Expectations

Once you’re reasonably clear on what’s involved, think about your organization and its business processes, and then:

Identify at least three objectives for improving the organization's internal business processes, and show how they relate to the mission, vision and strategy of the organization.

  • For each objective, develop at least one meaningful performance measure (metric).
  • For each objective, identify at least one expected level of performance (target).
  • For each objective, identify at least one new action or program that needs to be developed to ensure successful implementation of the organization's strategy (initiative).
  • Comment briefly on the relationships of the process objectives that you've identified here to the finance objectives that you identified in the Module 1 SLP assignment and/or the customer service objectives that you identified in the Module 2 SLP assignment. How do they help to fulfill those objectives? If they don't (and they don't have to), what makes them more important than objectives that would relate to finance or customer service?
  • Finally, do you wish to make any changes to your Module 1 or Module 2 objective write-ups in light of your Module 3 experience?

Here’s a table that you may wish to copy and fill in (the boxes are expandable - take all the space you need to be complete in your descriptions. No more than 2-3 pages should be necessary.)

Objective

Measure

Target

Action

Relationships to other objectives

Revisions (if any) to Module 1 and/or Module 2 Objectives

Objective/Module

Measure

Target

Action

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Running Head: THE BALANCED SCORECARD & THE FINANCIAL PERSPECTIVE The Balanced Scorecard & the Financial Perspective of Starbucks 1 THE BALANCED SCORECARD & THE FINANCIAL PERSPECTIVE 2 Company Introduction Starbucks Inc. is an American company specialized in the brewing and marketing of blended coffee brands. The company, being an international company, has highly specialized in the purchasing and sale of coffee blended brands throughout the world. The company sells a wide variety of coffee brands including cold blended beverages, brewed coffee and Italian-style espresso among other brands. Moreover, the company produces and sells bottled Frappuccino and iced premium ice creams through its partnerships and a joint venture with other third party companies (Starbucks Coffee Company, 2015). Starbucks is considered one of the most successful companies thanks to its effective leadership of Howard Schultz before his departure. Mission, Vision and the Overall Strategy of the Company The mission and vision statement of Starbucks reflects the company’s overall company’s emphasis on leadership in the coffee house industry. The mission statement of any company serves as a true indication of the company’s intention in the market. On the other hand, the vision statement of the Starbucks indicates what the company intends to achieve in the future. In this regard, the mission and vision statement of the company provides a guide through which the company can use to achieve its general goals and objectives in the market. In particular, Starbucks mission and vision statement show the company’s customers the benefits they can get from the company (Starbucks Coffee Company, 2015). Starbucks Mission Statement From the company’s website, Starbucks mission statement states that “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” This mission statement thus outlines what the company does to enhance the effectiveness and efficiency of its THE BALANCED SCORECARD & THE FINANCIAL PERSPECTIVE 3 business (Starbucks Coffee Company, 2015). In this case, the mission statement of the company has two essential foundations namely to inspire and nurture the human spirit and one person, one cup and one neighborhood. These are driving force behind the Starbucks success. Starbucks Vision Statement Although Starbucks does not bring out its vision statement directly, a thorough look at the company’s general strategy indicates that the company’s vision statement is “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” (Starbucks Coffee Company, 2015). This vision statement of the company outlines the company aim and goal. Starbucks financial performance Starbucks is the world’s number one specialty coffee retailer, and it is the best performing company among the coffee house businesses in the world. The company has been recording growth in revenue annually. As of 2016, the company had a total revenue of about $21.315 billion. On the same note, the company had about $19.16 billion in revenues for the fiscal year 2015 and this is clear indication of a positive performance for the company. 4 THE BALANCED SCORECARD & THE FINANCIAL PERSPECTIVE Objectives for Improving Financial Position for the Company Objective Measure Target Action 90% market share Increase the company’s social services including corporate social responsibility and enhancing corporate image through ethical sourcing. Improving the credit worthiness and Asset to liability ratio ability to fulfill financial obligations. $20.5 billion in total assets / $4.3 billion in total liabilities Reduction in finance and administrative expenses as well as reduce external borrowings Foster investor trust adding new investors. Increase total shareholder’s equity from current $5.1 billion to $9.5 billion Enhance dividend payout strategy and increase the company’s stock value Gaining a competitive position in the industry. Market Share Index Total Equity 1. To gain a competitive position in the industry 2. Strong financial position improves the company’s credit worthiness and enhancing its ability to meet its short term and long term financial obligations. 3. To foster investor trust and attract new investors to the company. The above objectives relate to the company mission, vision and overall strategy in the sense that they echo the goals of the company. The Strong financial position allows the company to enhance its service delivery and this aligns with the overall mission of inspiring and nurturing the human spirit through efficient and quality services (Michelli, 2006). No organization can meet and exceed the needs of its customers without having the necessary finances to enhance such services. Objective 1: To gain a competitive position in the industry Performance measure/ metric: Sustained profits and increased market share THE BALANCED SCORECARD & THE FINANCIAL PERSPECTIVE 5 Target: 90% market share (Current market share 75%) Competitive position in the industry is a competitive advantage to the organization since it is the route to the long term success of the company. Being above the competitors in the industry allows the company to enjoy long term profits in the industry. One important measure of competitive position in the industry is sustained profits and increased market share (Michelli, 2006). Industry leaders such Starbucks can maintain its profits and increase its market share when compared to its close competitors. Initiative: Increase the company’s social services including corporate social responsibility and enhancing corporate image through ethical sourcing. Objective 2: Strong financial position improves the company’s credit worthiness and improving its ability to meet its short term and long term financial obligations. Metric: increase in assets and reduction in liabilities Target: $ 20.5 billion in total assets (Current total assets is $ 14.33 billion). Reduction in total liabilities to $ 4.3 billion from its current $ 8.4 billion The creditworthiness of the company is one important valuation performed by the lenders to determine the possibility of the company defaulting from repaying the borrowed funds. Creditors consider the amount of assets and liabilities owned by the company when determining its credit worthiness (Schultz, 2012). The higher the assets Starbucks have, the better its financial position. Initiative: Reduction in finance and administrative expenses as well as reduce external borrowings and instead enhance its shareholder's equity. THE BALANCED SCORECARD & THE FINANCIAL PERSPECTIVE 6 Objective 3: To foster investor trust and attract new investors to the company Metric: increased number of investors to the company as well as increased total equity of the company. Target: Increase total shareholder’s equity from current $ 5.1 billion to $ 9.5 billion. Initiative: Enhance dividend payout strategy and increase the company’s stock value. This will attract more investors to the company. THE BALANCED SCORECARD & THE FINANCIAL PERSPECTIVE 7 References Michelli, J. A. (2006). Starbucks experience. Tata McGraw-Hill Education. Retrieved on 20 July 2017. Schultz, H. (2012). Pour your heart into it: How Starbucks built a company one cup at a time. Hachette UK. Retrieved on 20 July 2017. Škrinjar, R., Bosilj-Vukšić, V., & Indihar-Štemberger, M. (2008). The impact of business process orientation on financial and non-financial performance. Business Process Management Journal, 14(5), 738-754. Retrieved on 17 July 2017. Starbucks Coffee Company (2015). Company Information – Starbucks Coffee Company. Retrieved on 16 July 2017, from https://www.starbucks.com/about-us/companyinformation Running head: BSC & THE CUSTOMER PERSPECTIVE The Balanced Scorecard & The Customer Perspective of Starbucks 1 BSC & THE CUSTOMER PERSPECTIVE 2 The Balanced Scorecard and the Customer Perspective for Starbucks 1. Identify at least three objectives for the organization's customer service perspective and show how they relate to the mission, vision, and strategy of the organization. Starbucks first objective is maintaining the company as one of the most respected and recognized brands worldwide. The company's retail objective is to be the leading retailer as well as the brand of coffee in every target market through selling high quality and finest coffee and other high quality related products as well as, providing the best experience to their customers. The third objective is enhancing community involvement and environmental stewardship. The company is very committed to inspiring its customers and its employees. This is due to the fact that the customers are very important in Starbucks business. The company, therefore, invest in helping its customers do better in their community and maximize needs satisfaction. It also motivates its employees to work for the company. Starbucks inspires the employees so that they can offer their best service to their customers. This helps in strengthening the bond between the employees and the company. The company's mission statement is inspiring and nurturing the human spirit. The vision statement for the company is establishing Starbucks as the premier purveyor of the finest coffee worldwide while maintaining its uncompromising principles as it grows. The objectives of the enterprise are the pure implementation of the mission and vision statement. The mission statement is about nurturing and inspiring the human spirit. 2. For each objective, develop at least one meaningful performance measure (metric). The first objective for Starbucks as listed earlier is becoming the respected and recognized brands in the world. The metric used for this objective is market share index. The company can be said to have achieved this objective to a great extent. Starbucks is the leading coffee company in the world. It competes with other giant enterprises in the world such as McDonalds. The second objective is about being the leading retailer offering high BSC & THE CUSTOMER PERSPECTIVE 3 quality products. Starbucks has not achieved this goal so far as there still exist other large retailers such as Walmart. Walmart is the leading retailer in the world and takes the biggest market share. The third objective is about inspiring the employees and the customers. This can be measured by the rate of employee turnover and the level of customer satisfaction. The company's rate of staff turnover is shallow meaning that the employees of the company are motivated what the company motivates them with. For the third objective, the performance metrics can be the number of social welfare programs the company conducts in a year as well as the environmental principles the company undertakes (MacKay, 2004). Starbucks is popular of conducting so many social responsibility programs. Some of them include recycling and waste reduction, energy conservation, water conservation, green building, responsibly grown coffee, ethically sourced cocoa, support to farmers and Ethos water fund among others. Starbucks can, therefore, be said to have scored highly on this objective. 3. For each objective, identify at least one expected level of performance (target). The first objective indicates that the company's aims at being the most respected and recognized brand in the world. The company, therefore, targets customers for the whole world. It is expected that the company targets the customers all over the world. It is therefore expected to offer its products and services to customers all over the world. The company can target to increase the level of customer satisfaction by an extra 20% for the next three years (Basu, Little & Millard, 2009). For the second objective, the company aims at becoming the leading retailer in the world. It is expected that the firm should have the largest network of its suppliers, the widest customer base for its products and services to achieve this objective. The third objective is about maximizing the social welfare. It is expected that the company should engage in numerous social responsibility activities. BSC & THE CUSTOMER PERSPECTIVE 4. 4 For each objective, identify at least one new action or program that needs to be developed to ensure successful implementation of the organization's strategy (initiative). Starbucks still has more to do to achieve the mentioned above objectives. For the first objective, the company needs to maintain the highest quality of its products. Additionally, they should have a wide selection of suppliers, and should only source its products from entrusted suppliers. For the second objective, Starbucks should consider improving their communication system, further improving its customer relationship and ensuring that their delivery schedule is adhered to. Regarding the third objective, the company should introduce more products which are healthier to its clients. It should also employ the local staffs and train them on equipping them with international standards (Murby & Gould, 2005). This initiative will boost the health of its customers. 5. Comment briefly on the relationships of the customer service objectives that you've identified here to the financial objectives that you identified in the Module 1 SLP assignment. How do they help to fulfill those goals? If they don't (and they don't have to), what makes them more important than objectives that would relate to finances? The three objectives discussed above are very consistent with the financial objectives of the company. All the three objectives aim at maintaining the business's competitive advantage and also increasing its profitability which is one of the financial objectives of the company (Financial perspective, n d). Through pursuing a long-term goal and pursuing social and environmental stewardship, the company is likely to receive high financial gains in return. 6. Finally, do you wish to make any changes to your Module 1 objective write-up in light of your Module 2 experience? No. I don't wish to change module one. It was sufficient. BSC & THE CUSTOMER PERSPECTIVE 5 References Basu, R., Little, C., & Millard, C. (2009). Case study: A fresh approach of the balanced scorecard in the Heathrow Terminal 5 project. Measuring Business Excellence, 13(4). 22-33. Financial perspective (n.d.). EPM Review. Retrieved from http://www.epmreview.com/resources/articles/item/84-financial-perspective.html MacKay, A. (2004). A practitioner's guide to the balanced scorecard: A practitioners' report based on: ‘Shareholder and stakeholder approach to strategic performance measurement using the balanced scorecard.' Chartered Institute of Management Accountants. Retrieved from http://www.cimaglobal.com/Documents/Thought_leadership_docs/tech_resrep_a_pra ctitioners_guide_to_the_balanced_scorecard_2005.pdf Murphy, L., & Gould, S. (2005). Effective performance management with the balanced scorecard: Technical report. Chartered Institute of Management Accountants. Retrieved from http://www.cimaglobal.com/Documents/ImportedDocuments/Tech_rept_Effective_Pe rformance_Mgt_with_Balanced_Scd_July_2005.pdf Background BSC Implementation & the Internal Business Process Perspective Required Reading Chapters 1-3 of: MacKay, A. (2004). A practitioner’s guide to the balanced scorecard: A practitioners’ report based on: ‘Shareholder and stakeholder approaches to strategic performance measurement using the balanced scorecard’. Chartered Institute of Management Accountants. Retrieved from http://www.cimaglobal.com/Documents/Thought_leadership_docs/tech_resrep_a_practitioners_g uide_to_the_balanced_scorecard_2005.pdf Also read/review Chapter 2-7 of: Murby, L., & Gould, S. (2005). Effective performance management with the balanced scorecard: Technical report. Chartered Institute of Management Accountants. Retrieved from http://www.cimaglobal.com/Documents/ImportedDocuments/Tech_rept_Effective_Performance _Mgt_with_Balanced_Scd_July_2005.pdf Read the following materials on balanced scorecard: Braam, G. J. M. (2012). Balanced scorecard's interpretative variability and organizational change, business dynamics in the 21st Century, Dr. Chee-Heong Quah (Ed.), InTech, DOI: 10.5772/35828. Retrieved from http://www.intechopen.com/books/business-dynamics-in-the21st-century/balanced-scorecard-s-interpretative-variability-and-organizational-change Braam, G.J.M., & Nijssen, E.J. (2011). Exploring antecedents of experimentation and implementation of the balanced scorecard. Journal of Management & Organization, 17(6), 714728. Retrieved from Trident University Library. This web article will be helpful for your SLP. Niven, P. (n.d.). Financial perspective. EPM Review. Retrieved from http://www.epmreview.com/resources/articles/item/85-customer-perspective.html Optional Reading McLean, S.R., & Mahaffey, S.M. (2000). Implementing a surgical balanced scorecard. Surgical Services Management. 6(1). 43-47. The Chartered Quality Institute. Retrieved from http://www.thecqi.org//KnowledgeHub/Qualityworld/
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Explanation & Answer

Attached.

Running Head: INTERNAL BUSINESS PROCESSES

Internal Business Processes
Name
Instructor
Institutional Affiliation
Date

1

2

INTERNAL BUSINESS PROCESSES

The balanced scorecard entails a management approach that fosters companies to
illuminate their strategy and vision and transform them into reality. The internal business process
is one of the critical elements of the balanced scorecard. Typically, the internal process
perspective concentrates on all the primary processes necessary for the organization to excel at
offering value to the customers (Keyes, (2016).
Objective

Measure

Target

Action

Operational excellence-operations Asset utilization-this is a

Quality operations

Foster bottleneck

management processes is one of

performance metric used to

management-this is the

management-the

the elements of internal business

measure the objective of

target expected to be

bottlenecks that restricts

processes. Typically, this element

operational excellence. To...


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