BALANCED SCORECARD: A CASE

STUDY ON CLOTHING RETAIL

BUSINESS,AMBALA CITY

SUBMITTED BY: ANMOL GULATI , 2013360 (MCOM3A)

INTRODUCTION

The balanced score card is a system created by Kalpan and Norton. The balanced scorecard is a
measurement based performance management system that translate the vision of the organization
to strategies, and converts them and the mission into an extensive set of performance measure.
The basic measure mostly used to show the success of the company are related to the past
performance of the organization, but these are inadequate for designing the future of the
organization. In addition, Balanced scorecard translating:-

STRATEGIES PERFORMANCE METRICS

In a nutshell, BALANCED SCORECARD is essentially a tool which helps us in deciding on the

score earned by particular company on the following 4 perspectives :

FINANCIAL

CUSTOMER
VISION & INTERNAL
BUSINESS
STRATEGY PROCESS

LEARNING &
GROWTH

FIGURE.1: VISION AND STRATEGY OF BALANCED SCORECARD

It is used extensively in business and industry, non – profit organization , government and
worldwide to streamline the business activities to vision & strategy. It simply doesn’t only
measure the performance on financial perspective but all other non financial perspective are also
taken into consideration which are equally important as seen in fig. 1. It gives a comprehensive
view : financial perspective + non financial perspective.

PERSPECTIVE FACTORS IN BALANCED SCORECARD

1. FINANCIAL PERSPECTIVE
This is basically related to the traditional approach and a very basic objective for every
profit-seeking business, as they measure the performance on the basis of ROI, Net
income, profitability, revenue growth. As this is also a crucial perspective because
interested parties do rely on this perspective only. Though they didn’t show the future
picture , as they are related to past performance but they can be used to anticipate the
future profits with past trends.
2. CUSTOMER PERSPECTIVE
This is a non-financial measure, in this measure the business will identify the segment in
which it wanted to compete, and for that they need to know- who are their target
customers? And though this perspective is very important and crucial in its own way as
here we identify key areas as how a business will be able to retain its customer, how will
they make them feel delighted, satisfied, and in that way these customers will increase the
profitability for the business.

FIGURE.2: THE CUSTOMER PERSPECTIVE- CORE AREA MEASURES

3. INTERNAL BUSINESS PERSPECTIVE

This is a non-financial measure, in which the business identify the key processes the firm
must excel at in order to achieve or be consistent in the customer perspective : as to
 increase the customer satisfaction. The business will make every effort to identify those
processes and will initiate an action to track the progress thereafter. As like, now-a-days
customer prefer those business or organization which are consistent in their nature – be it
a fast delivery, less cycle time, post sale service, good supplier relations so that there will
be no hurdle in the production or in serving customer. As this will help maintain
consistency in retaining good , loyal , delighted, satisfied customers if we succeed in this
prospective , because no one likes to wait, they want to be served as similar as JUST-IN-
TIME approach.

4. LEARNING & GROWTH PERSPECTIVE

Learning is the key to consistent growth and this perspective plays crucial role itself as:
BUSINESS – LEARNING & GROWTH = 0
The value creation in today’s organization is overwhelming dominated by the influence
of HUMAN CAPITAL. For a business to efficiently grow , it is important to have
efficient MOTIVATED EMPLOYEE in organization –as with the right mix of skills and
tools, will sustain constant improvement in driving all the above three perspectives.

EMPLOYEE EMPLOYEE EMPLOYEE

SATISFACTION RETENTION PRODUCTIVITY

FIGURE.3: LEARNING AND GROWTH MEASUREMENT

Employee satisfaction- enabled by – staff competencies, technology infrastructure , and
climate for action. It result into employee retention and employee productivity – which in
turn drives financial and non-financial results.
Thus a good incentive system will boost up employee morale which in turn will decrease
the employee turnover rate and employee will themselves will make efforts to work hard.
 DEVELOPING A BALANCED SCORECARD FOR WHOLESALE & RETAIL
CLOTHING BUSINESS : GULATI SILK & SAREES , OLD CLOTH MARKET ,
AMBALA CITY
They are having a wholesale & retail business of bridal wear, suits, saree , lehanga and
much more , as they are currently into low-priced fashion wear products to high-priced
fashion wear products. Suppose beyond this they wanted to expand their business and
open an individual and independent unit of bridal section only which will not include any
casual-party wear clothes. They now have to decide on the market share, segmented and
target market and their current market share as it is allowing them to diversify or not,
how will they positioned themselves, how will they able to acquire new customers if they
wanted to start this independent unit in another name & label.
Based on this they need to tie-up with the suppliers who in turn will supply
all the bridal wear to the business, and will have to maintain good relationships so that
they can provide you the best quality product at acceptable price so that they can deliver
the value to its customers. Once they decided on the customer perspective and supplier
perspective as how will they be able to retain them , like example at the time of festival
offers- they provided customers with a photo frame as a gift of their shopping which in
turns will help them in retaining customers.
Therefore they need to focus on the internal business processes too ; that they can do with
the help of prompt delivery , less customer waiting time , and this to be ensured that the
sales team is upto the mark so that no customer will left the showroom barehanded, for
this they will have to increase the employee productivity with constant learning and
growth by providing them bonus, incentives on exceeded sales part which will induce
them to sell more to the customer, and they are in a direct relationship with the customer
will induce customer relationship management too with the help of emotions, though they
need to focus on their financial perspective too , like ROI, REVENUE GROWTH side by
side so that they could have an idea as whether this BRIDAL WEAR segment is worth to
diversify or not !
 BALANCE SCORE CARD – GULATI SILK AND SAREES

Name GULATI SILK & SAREES , AMBALA CITY , HARYANA

STRATEGIC OBJECTIVES KEY PERFORMANCE INDICATORS

ACHIEVEMENT OF SALES REVENUE TARGET SALE GROWTH

FINANCIAL

CASH FLOW TARGET CASH FLOW STATEMENT

ACHIEVEMENT OF QUANTITY TARGET ECONOMIC VALUE ADDED

ACHIEVMENT OF STOCK TURNOVER TARGET NO. OF STOCK SOLD

BUSINESS BRAND POSITIONING

MARKET POSITIONING MARKET SHARE

PRODUCT CATEGORY POSITIONING

PRODUCT SERVICE POSITIONING SATISFIED CUSTOMERS

CUSTOMER

DIFFERENTIATED OFFER VIS-À-VIS COMPETITION VALUE

NO. OF VISITORS IN SHOWROOM

CUSTOMER RETENTION
BUILD LOYALTY

NO. OF TRANSACTION

TRANSACTION VALUE PER BILL CUSTOMER SATISFACTION

PERCEPTION OR RESPONSE TO ‘VALUE OFFER’

INTERNAL PROCESSES

SAME DAY DELIVERY LESS CUSTOMER WAITING TIME

REDUCE THROUGH PUT TIME REDUCING NON-VALUE ADDED ITEMS

REDUCE DEFECTS EMPLOYEE QUALITY TEAM

HOW EFFICIENTLY THEY ARE PROVIDING PRODUCT

SUPPLIER RELATIONS
IN GIVEN EFFECTIVE TIME AND EFFICIENT COST

NO. OF TRAINING PROGRAMS CONDUCTED EMPLOYEE PRODUCTIVITY

LEARNING

STAFF TURNOVER RATIO EMPLOYEE RETENTION