Strategic Management System: Balanced Scorecard

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The balanced scorecard is a strategic management system that helps guide corporate strategy to meet a number of disparate objectives (BSI, 2011). It does this by highlighting for managers the key objectives in a number of areas in order to find the strategy that best meets all of the objectives. These areas are the financial, customer, learning and growth, and internal business processes. Kaplan and Norton (2004) make the case that in order to create value, three behaviors are important focusing on the customer, being creative and innovative and delivering results. Most of the measures in the balanced scorecard will relate to this underlying philosophy. For the Customer Value perspective, the objectives should be to improve customer retention, to improve customer satisfaction and to increase the number of referrals. Customer retention can be measured in terms of customer turnover, or in the number of existing customers who come back in a given month. The satisfaction score is important as well, and can be measured using customer satisfaction surveys, either anonymous or not. In addition, the number of referrals is something of a proxy for customer satisfaction. By encouraging referrals, the business is being strengthened as well, but this is also something that reflects on whether or not Speedy Bikes is truly creating value. The objectives are to increase the number of existing customers to be 5% of the client base; to increase the number of referrals to 50 per month, and
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