Evaluation of Performance of BW Group using Balanced Scorecard and Key Performance Indicators

This case study evaluates the performance of BW Group, a leading maritime group, using the balanced scorecard and key performance indicators. It discusses the financial, customer, process, and learning and growth perspectives of the balanced scorecard and how KPIs can help the company monitor its progress towards achieving its strategic and operational goals.

BW GROUP, NORWAY
Internet-Based Case Study
BW GROUPS
http://www.bw-group.com/about-us
Group Members

Introduction:
BW Group is recognised as a leading maritime group that operates all over the world
involving infrastructure of floating gas and shipping as well as deepwater gas and oil
production. In addition to this, the group supplies energy along with other essential
commodities since more than 80 years (Bw-group.com., 2018). For doing so the group has a
controlled fleet of more than 300 ships that include subsidiaries and affiliates. In 1955, Sir
YK Pao formed this group in Hong Kong as World-Wide Shipping. In the year 2003, BW
Group acquired Bergesen, the largest shipping company of Norway. After two years, this
group was branded again with the name BW. In recent year, BW Group acts as the largest gas
shipping fleet across the world. This shipping fleet has 70 gas vessels of large size that
include three floating storage along with degasification units.
Evaluation of performance:
It is essential for any company to determine its performance through comparing the
outcomes related to objectives and evaluation at what extend it can meet its targets. Thus, it
can be said that all organisations have remained concerned regarding their performance
measurement without considering size, nature or internal operating structure (von Bonsdorff
et al., 2018). For a modern company, creditors and owners measure performance of
management through considering financial statement ratios like earnings per share, dividends
per share, return on equity of stakeholders and return on assets. This process also considers
coverage ratios as well as debt ratio. Thus, in maximum companies, it has become essential to
develop a strong base for measuring cost performance of companies along with profit and
investment centres. This is because cost performances are considered as responsible
regarding the performance of company.

Introduction of balanced score card (BSC):
The balanced score card implies a performance matrix that an organisation used in
strategic management. Through this process, the organisation can recognise and improve
different internal functions related to business as well as external outcomes. Thus, this
process helps to measure and give feedback to the specified organisation (Cooper, Ezzamel &
Qu, 2017). The chief motive of using this scorecard is to introduce good behaviours within an
organisation through analysing different areas. This BSC can be divided into four parts,
which are financial perspective, customer perspective, process perspective and learning as
well as growth perspective.
Figure 1: Balance score card
Source: (Iskandar, 2017)
Financial perspective: The chief objective of this perspective is to increase opportunities for
earning revenues and develop cost structure. For this, the company can measure revenue
percentage from new customers and revenue percentage from new products. It also can
consider cost per unit as benchmark to develop cost structure against competitors. BW Group
has some core business categories, which are, floating gas and shipping infrastructure,
production of oil and deepwater gas and supplying energy (Alhouli, Elhag, Alardhi &
Alazemi, 2017). The company operates as the largest gas shipping fleet in this world while
BW Offshore operates as the second largest fleet for producing floating oil and gas. Thus, the

activity of liquidity natural gas carriers and liquidity petroleum gas carriers of this company
makes 60 percent of total sale. Remaining activities like offshore floating production vessels
capture 25 percent of total sale. In 2017, DHT Holdings has purchased the BW VLCC fleet
and in this year BW has become an important shareholder in DHT capturing 35.5 percent
(Bw-group.com., 2018). Thus, for working efficiently, the company has experienced an
organisational restructuring. This will generate more effective system of management
depending on decision making structure.
Customer Perspective: The main objective for taking this perspective are satisfying and
retaining all existing customers, provide competitive price within the market, provide
products with high quality, increase market share and receive new customers. To understand
this, the company can measure percentage of growth revenue taken from existing customers,
conducting customer satisfaction survey and set competitive prices (Peral, Maté & Marco,
2017). This perspective also considers customer innovation rating as well as market share for
targeted customers and acquisition of new markets. BW Group is one of the leading
shipbuilding companies in Norway and over the world. It has earned good position through
supplying energy all over the world. Quality of their products has enough standard with
attracting prices (Iskandar, 2017). The most essential thing is that the company delivers its
products within proper time. This activity helps BW Group to obtain many serious customers.
Therefore, BW Group needs to take the vital step regarding safety issues, improving
technology and quality as well as cost competitiveness and trust along with cooperation (Bw-
group.com., 2018). Through this process, the chosen company can fulfil demand of
customers and obtain eco-friendly as well as modern technologies.
Process perspective: In this segment, some important objectives of this company can be
described as well. The specified company can reduce costs through strategic purchasing,
quality improvement through a system of quality management and develop various

innovative products. For measuring these objectives, the company needs to measure cost for
each unit of output, scored rating system for quality, comparison between product
development costs long with budget. For reducing pollution in environment and reducing the
accidental risks, the company needs to focus on the proportion of green house gas emission,
measurement of different forms of pollution and so on. BW Group operates sustainable and
efficient management system through assigning departments and professionals regarding
every sustainable initiative (Muda, Erlina & Nasution, 2018). Thus, associated department
operates comprehensive management to take activities regarding planning, assessment and
execution as well as strategic planning of the whole company.
Learning and growth perspective: This perspective considers safety training of employees,
motivating them for maintain voluntary safety activities and increase competencies as well as
skills of employees (Kokina, Pachamanova & Corbett, 2017). In addition to this, this
perspective considers corporate culture attitudes associated with self-improvement of
individual and corporate. In present working environment, significant change of technology
influences workers to obtain perfect knowledge regarding various activities related. For this,
this company needs to consider the number of participants related to safety and providing
immediate rewards to workers regarding safety performance. Moreover, the company needs
to consider total training as well as total number of participants for this training.
Key Performance Indicators:
On the other side, key performance indicators (KPI) represent a set of measurements,
which a company uses for monitoring its performance during time. These matrixes help a
company to determine progress for obtaining strategic as well as operational goals
(Mohammadfam et al., 2017). Moreover, these indicators also help a company to compare its
finances as well as performances with that of other businesses. KPI will be essential for

expanding BW Group. Its main strategy is to develop profitability of the company through
reducing costs and increasing quality by adopting strategic purchasing.
Moreover, the company can focus on quality improvement, as it is essential for the
electrical equipment market across the world. This can be observed at a maturity stage by
developing the industry. The important area is development of innovative products. For this,
BW Group can compare installation cost with budget. This KPI has played vital role because
the specified company intends to increase the market share related to strategic models. This
concept considers environment friendly activities for operating vessels (Jahangirian, Taylor,
Young & Robinson, 2017). The other KPI of this company is adopting re-liquefaction system
with higher efficiency. For doing so, the specified company needs to compare product
development cost along with budget. BW Group has intended to develop reliability of their
customer through adopting LNG re-liquefaction as well as facility of re-gasification
demonstration. These will evaluate actual performance on the contrary of design
performance.

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