Topic 8 – Business Planning and the Balanced Scorecard
Attempt these questions before attending your tutorial in week 9 where you will discuss
them as a class to develop deeper understanding of the topic.
Question 1
Suggest examples of business aspects that may be considered under each perspective of the
balanced scorecard (financial, customer, internal process, innovation and learning) in
relation to a barber shop or hair salon.
Question 2
Josie runs a small business selling a range of celebration gift boxes for special occasions. She
has an online site that allows customers to choose the contents of the gift boxes from an
extensive range of items including chocolates, fruits, sugar cookies, wine, small toys and
novelty items. To ensure that she meets her promise to customers of two-day delivery, Josie
has to carry stock of all items which takes up a significant amount of space. Josie charges
one fixed price of $45 for all gift boxes, regardless of the choice of contents. She delivers
the boxes personally to all customers who live within a 50km radius of her home.
Two perspectives of the balanced scorecard are Customer and Internal Business Process.
Referring to Josie’s business scenario outlined above, identify an aspect of her business
operations that you may suggest she reconsider under each perspective (Customer and
Internal Business Process) to help promote profitability.
Question 3
A small business that provides event catering to corporate clients recently informed one of
their original clients that they could no longer provide services to them. The client was not
pleased, since they realise it may be difficult to find another caterer to supply the unusual
and specific menu items which they often requested with very short notice.
With reference to the balanced scorecard, outline some possible reasons why this decision
might have been made, and suggest alternatives to stopping the service altogether.
Question 4
Downstairs at 7’ is a fictional restaurant located on the ground floor of an exclusive hotel in
the inner city. The restaurant prides itself on offering a wide range of international cuisine
and a fine dining experience. It also provides room service to guests staying at the hotel
above, and offers a limited take-away menu from an adjoining street-facing outlet.
Provide examples of measures that could be included in each perspective of the balanced
scorecard for ‘Downstairs at 7’ restaurant.
Question 5
Advanced Kitchen Factory produces and supplies small electrical appliances to retail
department stores. The CEO, Leah Lee, has become increasingly concerned about the recent
decreases in profits. She is advised by the senior executives that the operating expenses
have already been at their lowest and therefore, cannot be reduced. Leah understands that
in order to improve profits, she needs to consider increasing sales revenues and/or reducing
costs of sales.
Leah first calls on Lucas Huynh, the general manager of production, to discuss what actions
he would recommend to reduce production costs. Lucas claims that due to labour
shortages, costs of production have been increased significantly. He advises Leah that, to cut
costs, Advanced Kitchen Factory would need switch to less expensive suppliers for some of
their components and at the same time, they would need to buy from these new suppliers
in large quantities to take full advantages of all trade discounts.
Leah then calls in the sales manager, Bradley Schubert, for his suggestions on how to
increase sales revenues. Bradley suggests that this can be done by increasing average selling
prices and imposing minimum order requirements for both existing and new customers.
Leah calls on you as a consultation to give her advice. She tells you that she has been at a
recent seminar where they were talking about something called a “balanced scorecard”.
You are required to explain in details to Ms Leah Lee:
a) How the balanced scorecard could be used to shape the strategic direction of Advanced
Kitchen Factory. (Please focus on the current problems at Advanced Kitchen Factory and
how the proposed changes fit into the four perspectives of the balanced scorecard).
b) One potential advantage and one potential problem that Advanced Kitchen Factory
might encounter in implementing the balanced scorecard.
Question 6: (Group presentation question): Please discuss this question within your group
and prepare a group response before attending your tutorial in week 9.
Michelle is the owner of a small online business that buys T-shirts in bulk, applies her
trendsetting embroidery designs, and then sells them on her website. Her primary goals
include establishing a reputation for trendsetting designs and ensuring timely delivery of T-
shirts within four days of order placement. However, meeting this delivery target
occasionally requires Michelle to work overtime or temporarily suspend new orders to fulfil
existing ones. Despite consistently positive feedback from satisfied customers and winning
the 2023 Best Product Award for her T-shirts, Michelle's business experienced notably lower
profitability in 2023 compared to its peers. You are required to answer the following two
questions.
a) How can Michelle use the Balanced Scorecard to address the discrepancy between her
business’s recognition for trendsetting designs and customer satisfaction and its lower
profitability compared to its peers in 2023?
b) Considering Michelle’s aim to deliver T-shirts within four days and her need for
occasional overtime work and temporary order halts to fulfil existing orders, how can
she use the Balanced Scorecard to optimise her operations while maintaining customer
satisfaction?
