The Balance Score Card
Organizations have used the balanced scorecard to overcome different issues that may affect business performance including measurement of effective performance, effective management of intangible assets, and the increasing challenges experienced in strategy implementation (Niven, 2006). From literary analysis, it is clear that Metro Group, one of the leading retail and wholesale companies in the world implements the Balances Scorecard (Ali, 2012). Like Metro Group, Walmart, one of world’s wholesale and retail companies, applies the Balanced Scorecard approach in performance evaluation and strategy formulation. The purpose of this paper is to compare and contrast how Metro Group and Walmart have implemented the Balanced Scorecard approach. Analysis will be based on four perspectives of the Balanced Scorecard namely; customer, financial, process, and learning and growth. Based on extensive review of existing literature, it is evident that Walmart has done a better job of implementing the Balanced Scorecard approach than Metro Group.
A far as finance perspective is concerned, issues that will be focused on include return in assets, sales, and net profit margin. Under customer perspective, this paper will look at issues related to customer satisfaction and customer retention rates. The number of new service items, sales performance, and transaction efficiency will be focused on under internal process perspective. As far as learning and growth are concerned, issues of concern will include; responses to customers service, professional training, organizational competence, and employee stability (Niven, 2006). Both Metro Group and Walmart have made significant steps as far as implementation of the Balanced Scorecard is concerned. However, the progress that Walmart has made is better than that of Metro Group (Ali, 2012).
Metro Group deals in a variety of business systems including wholesale trade, hypermarkets, department stores, consumer electronic stores, and online trading. The company has done well in leveraging its learning and growth perspective. According to Ali (2012), Metro Group has successfully implemented a Radio Frequency Identification that enables it o register customer data through radio waves as frequently as possible. This information technology tool enables Metro Group to track customer data automatically without human intervention. This allows the company to maintain highly accurate inventory records, customer data, employee data, and advanced shipping notices. This way, Metro Group has managed to reduce transaction errors, incorrect product identification, product shrinkage, and misplaced products. In addition, the Radio Frequency Identification has enabled Metro Group to increase sale, raise net profit margin, improve customer satisfaction, reduce customer complaints, and improve organizational competence. It is clear therefore that Metro Group has made some step in implementing the Balanced Scorecard approach.
When compared to Walmart, one can conclude that Walmart has done better than Metro Group in implementing the Balanced Scorecard approach. Walmart has established a stronger relationship between its financial, customer, internal process, and learning and growth perspectives than Metro Group (Ali, 2012). The company has concentrated much in leveraging the learning and growth perspective as a way of improving performance in other areas (Fishman, 2006). For instance, Information Technology plays a very important role in supporting Walmart’s business. The company has gone an extra mile in advancing its Information Technology systems, and the degree of advancement is higher than that of Metro Group. Over the recent past, Walmart has invested a lot in a central database, a satellite network, and a store level POS system (Ali, 2012).
By combining external information affecting sales and sales data, Walmart has been able to provide additional support to customers, which has helped it to ensure more accurate purchasing forecasts as compared to Metro Group. Walmart also uses Retail Link, one of the world’s biggest civilian databases. This link helps Walmart to keep data of every sale made over a prolonged period of time (Fishman, 2006). Through the Retail Link, Walamart allows its suppliers to access real-time sales data from individuals up to store level. Walmart also adopted the Collaborative Planning, Forecasting and Replenishment in 1990 that allows it to share critical information related to the supply chain such as inventory levels, daily sales and promotion data (Ali, 2012).
Walmart uses a Vendor-Managed Inventory (VMI) program that enables suppliers to manage their inventory levels in all distribution centers of the organization. This form of technological advancement has not been implemented at Metro Group, making Walmart to be in a better position than Metro Group as far as implementation of the Balanced Scorecard is concerned Ali (2012). Like Metro Group, Walmart has tried its best to leverage its Information Technology system by implementing Radio Frequency Identification systems. This form of technological advancement has enabled the company to collect sales and customer data automatically. However, the Radio Frequency Identification system has brought about more efficiency at Walmart than at Metro Group.
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