Measuring Success: Tools and Techniques for Evaluating Landsec's Performance

This article discusses the different tools and techniques used to measure the success of Landsec, the largest investment and property development company in the UK. It covers triple bottom line, ratio analysis, key performance indicators, CSR pyramid, competitors analysis, and balanced scorecard. The article provides an in-depth analysis of Landsec's performance using these tools and techniques, and suggests areas for improvement.

Measuring Success

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Triple Bottom Line......................................................................................................................3
Ratio analysis..............................................................................................................................4
Key Performance Indicators........................................................................................................6
CSR pyramid...............................................................................................................................7
Competitors analysis...................................................................................................................8
Balanced scorecard......................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Measuring success is very essential to evaluate the working efficiency and capability of
the company. The reason underlying this fact is that when the company will not be successful
then it is not worth running. Hence, with help of the different performance evaluation tool,
company can measure its success and profitability. This will provide with the base to the
company that how they have to take decision in order to grow and develop. The present case
study is based on Landsec that is Land Securities Group which is the largest investment and
property development company found in 1944 and is headquartered in UK. The current study
will outline the use of different types of the tools like ratio analysis, KPI, Balanced scorecard and
others in order to evaluate the working and success rate of the company.
MAIN BODY
Triple Bottom Line
Triple bottom line refers that companies should be committed in focussing on social and
environmental concerns same way they emphasis on profits. The triple bottom line is being
defined as a framework which assist company in maintaining the social and environmental issues
relating to the company along with its profitability. This TBL is being used by Landsec in order
to manage the three important aspect of business that is planet, profit and people. For being
successful, company need to work on these three aspect in proper and effective manner. Landsec
complies with all these three things in the following manner-
Planet
The planet includes the steps which the company undertakes in order to keep the
environment safe and good. This is necessary because of the reason that the company operates in
external environment and it is necessary for business to work in better condition (Our
sustainability strategy, 2022). With respect to protection of environment, Landsec is that
company is focusing on minimising the negative impact of company over the environment.
Along with this, the company is also trying to improve the resilience and reduce other cost.
People
This involves the fact that how much active the company is present in order to socially
help the people. Along with this, it involves keeping all stakeholder of the business happy and
satisfied. Hence, for this Landsec implement different types of strategies for keeping the

stakeholders happy like gender equality, ensuring proper health and safety of employees and
others. Along with this, company provides for different job opportunities to people and it will
improve the working efficiency of company.
Profit
This is the most important and common aspect for which the business is working. Hence,
Landsec is continuously working in order to improve the profitability of the business. Any
company operates with the aim of earning profit only and this is important for continuous growth
and development (Guo, 2019). For this Landsec provides good services to consumer so that they
can earn profit and this will improve the working efficiency of the company.
Ratio analysis
Particulars Formula 2020 2019
Current ratio Current assets/current liabilities 1.49 0.43
Current Assets 1859 524
Current Liabilities 1249 1225
Quick Ratio Quick assets/current liabilities 1.47 0.41
Quick Assets 1835 501
Current Liabilities 1249 1225
Debt to Equity ratio Debt/equity 0.641 0.415
Total Debt 5610 4114
Total Equity 8750 9920
Interest Coverage Ratio
{(Earnings before interest and
taxes (EBIT))/(Interest
Expense)} 3.19 3.14
EBIT 345 358
Interest expense 108 114
Revenue 741 757
COGS 274 271
Operating Expenses 122 128

Gross Profit Ratio (Gross profit/revenue)*100 63.02 64.20
Gross Profit 467 486
Revenue 741 757
Operating Profit Ratio (operating profit/revenue)*100 -93.12 -5.28
Operating Profit -690 -40
Revenue 741 757
Inventory Turn Over Ratio
Cost of Goods Sold/Average
Inventory 11.416667 11.782609
COGS 274 271
Average Inventory 24 23
Asset Turnover Ratio Net Revenue/Assets 0.03 0.03
Net Revenue 467 486
Total Assets 14360 14034
According to the calculation of company's current ratio of 2019 it is less than 1 this
indicates and company's current assets were not enough to meet its short term obligations.
Current ratio for year 2020 was more than 1 this indicates company had enough assets to cover
its short term debts at the end of the year. Organizations' quick ratio was less than 1 it indicates
there were not enough funds to meet its immediate liabilities as per the calculation of year 2020
quick ratio company had enough funds to pay for its immediate short term liabilities. Company
should try to maintain ideal current and quick ratio in order to prevent being solvent. Investors,
creditors, stakeholders, and lenders look at business' debt-to-equity ratio to evaluate the risk
associated with the business.
The higher the debt-to-equity ratio lower are the chances of investors and lenders to
invest in the firm. Ideal debt to equity ratio is considered to be around 2 or 2.5. Landsec's ratio is
lower than the ideal ratio the company should try increase its ratio in order not to face any
difficulty regarding available funds. Interest coverage ratio is used to determine how easily a

firm can manage to pay its interest due on outstanding debts. The higher the ratio the better it is.
There is a slight rise in company's interest coverage ratio from previous year (2019) to year 2020
it a good sign of company’s success company should try to maintain and increase this ratio.
Company have not seen much change in its gross profit ratio. There’s slight decrease in
company's GP ratio it indicates a highly competitive market. Ideal gross profit ratio is 50-70%.
This ratio tells how well a company is being managed, thus the company should maintain its
current gross profit ratio. Operating profit ratio is used to define the relationship between
operating profit and net sales of the company.
Landsec have negative operating profit ratio it indicates that the business is having
operating loss. On comparing both the years OPR it is highlighted that organization's OPR has
gone highly down. Appropriate measures should be taken to improve the situation. Inventory
turnover ratio of company is slightly higher than the ideal ratio (5 to 10). High inventory
turnover ratio indicates strong sales. It is suggested for the company to buy more inventories.
Assets turnover ratio is used to find out the efficiency of company's assets in generating revenue
from its assets. Ideal asset turnover ratio is more than 2.5. Landsec has a very low asset turnover
ratio and there is a slight decrease as compared to previous. The company should employ
measures to increase its asset turnover ratio to efficiently use its assets to make more revenue.
Key Performance Indicators
KPI is an acronym used for Key Performance Indicators. It refers to quantifiable
measures used to estimate a company's performance in long term. These indicators demonstrate
the affectivity of company in accomplishing its key business goals (Bhadani and et.al., 2020).
Objectives for strategic and operational improvement are provided by KPIs. Landsec also use
key performance indicators to measure its performance. The company have set certain strategic
objectives based on which it evaluates its performance. Objectives of the firm were to deliver
sustainable long-term shareholder value, ensure high levels of customer satisfaction, maximize
the returns from the investment portfolio.
In addition, attract, develop, retain and motivate high performance individuals, maximize
development process, being best class counterparty to its partners and suppliers and continually
improve sustainability performance are also the strategic objectives of the company. Half of the
award of long term share investment plans is ascertained based on this comparison with TSR
performance. To evaluate the progress of the objectives company have analysed and compared

its three-year total shareholder return (TSR) with comparator group's TSR. Firm failed to achieve
benchmark of –0.4 %. Half of the award of long term share investment plans is determined on
the basis of three year TPR performance compared to company's benchmark. The enterprise
measured its three-year total property return (TPR) and compared it with all March-valued
properties within MSCI.
Company performance was 0% p.a. below benchmark of 4.1% p.a. estimated by MSCI.
Hence, the desired progress was not achieved. Measurement and comparison of one-year total
property return (TPR) with respect to MSCI indicates non achievement of benchmark of -1.0%.
Part of the annual bonus is determined according to one-year TPR performance compared with
the benchmark (Mitrea-Curpanaru, 2021). Company compares its revenue profits with the
internal minimum threshold of the business. This minimum threshold is re-set again after every
three years. Company crosses the threshold consecutively for all the three years. These results
form a part of specific targets of the business to determine a portion of annual bonus.
CSR pyramid
CSR pyramid is a framework used to explain why and how social responsibility should
be taken by an organization. There are four levels at which a company should take up its social
responsibility namely, Economic, Legal, Ethical and Philanthropic (Arnold and Valentin, 2013).
A responsible company sees itself as a part of environment and not just an economic so it
considers itself responsible for its sustainable working.
The CSR pyramid is being used by Landsec in order to improve the working efficiency of
the company and protect the environment as well. For managing the CSR pyramid Landsec
involves four different levels of working and these are as follows-
Environmental responsibility
Within this aspect, Landsec undertakes and implement activities which protects the
environment in order to protect and safeguard it. For this, Landsec, provides some investment
and help in reducing the pollution and greenhouse gas emission. Along with this, the company is
also undertaking the use of renewable energy and sustainable resources.
Ethical responsibility
Within this responsibility, the ethical and morally correct working and value are being
shared by company. this is done in order to improve the working efficiency and quality of the
outcome. For this Landsec ensures that operating in ethical and fair way is very important

(Harper-Anderson and Lewis, 2018). This is particularly because of the reason that it will
provide effective working and outcome will also be ethical.
Philanthropic responsibility
This responsibility refers to an objective of business to make the society and world a
better place to work and live. This is also important for the reason that the company is operating
in external environment and it is very important for them to protect the surrounding (Yordanova,
2021). For this, Landsec is using the strategies and practices which safeguard the environment
and protect the society. this in turn result in protection of external environment.
Economic responsibility
Within this the company practices to work in better manner so that the financial decision of
the company is better. Any company operates for the aim of attaining profit and in case the
working will not be yielding good profit then this will affect the working efficiency. Hence, for
this Landsec undertakes the different strategies for increasing the profit and add to the economic
development of the economy.
Competitors analysis
Competitor analysis is a tool of marketing and strategic management used by companies
to assess its performance in comparison to its current and potential competitors. Competitor
analysis enable organisation to identify opportunities and threats existing in business
environment. The competitor analysis is necessary in order to measure the success of the
company (Berger, Choi, and Tomar, 2019). This is necessary for the reason that when the
company will be comparing its performance to the competitor. hence, as a result of this, the
performance of the company will be evaluated. With the comparison, Landsec will be in position
to evaluate the areas in which company is lacking and how they can improve the performance.
Particular Formula Landsec Segro plc
2020 2019 2020 2019
Gross Profit
Ratio
(Gross
profit/revenue)*100 63.02 64.20 75.84 71.35
Gross Profit 467 486 327.4 308.6
Revenue 741 757 431.7 432.5
With the comparison of the performance of Landsec with Segro plc it is evaluated that
the company is not performing in better condition. This is particularly becaseu of the reason that

the company is shaving 75.84 % of GP ratio but Landsec is having only 63.02 % of the GP ratio.
Hence, with the comparison of performance of both the companies it is evaluated that competitor
is having better performance and company is not performing in better way. Hence, it can be
stated that there is requirement of improvement in sales of the Landsec in comparison to the
other company that is Segro.
Balanced scorecard
Balanced scorecard is a well- structured strategic management performance metric that
enables identification and improvement of varied internal performance activities and their
external results (Chytas, Glykas and Valiris, 2011). This success measurement tool is used to
control such actions of organization's employees that results in unfavourable situations for the
enterprise. The balanced scorecard is also a tool which assist Landsec in order to analyse the
performance and evaluate it in better manner. This balanced scorecard helps the company in
improving the performance in better manner.
 The first aspect of balanced scorecard is the financial perspective which involves setting
the goal relating to the financial aspect of business. For this Landsec involves the use of
setting goals for improving the financial performance like increase sales by 40 % and
others.
 Along with this another aspect is relating to customer and stakeholder wherein Landsec
focuses on improving the strategies relating to keeping consumer satisfied (Jannach and
Jugovac, 2019). Hence, for this Landsec involves focusing on satisfaction level of
consumer and ensure that there is high consumer loyalty.
 In addition to this, the third aspect involves internal process which focuses on managing
the quality and efficiency of the company. the reason underlying this fact is that when the
internal process will be good then this will be improving the overall efficiency of
company.
 In the end the last perspective of this model involves organizational capacity and learning
and growth. With help of this Landsec is able to manage the human capital and culture of
the company (Mishevska, 2020). This is essential for the reason that when the culture and
infrastructure will be good then this will be improving the working efficiency.
Hence, with this it is clear that the company is performing well and this is requirement of
working in better manner. This simply implies that company is working in better and effective

manner and along with this, it was seen that there is requirement of improving the working in
comparison to the competitors (Orozco, 2020). Thus, with the analysis of all the different tools it
is clear that company is in position to manage the working efficiency and this result in success of
the company.
CONCLUSION
In the end it is concluded that measuring success is very important for the business. this is
necessary for the reason that in case company is not able to measure the success of the company
then they cannot identify that at what position they are currently operating. With the analysis of
the above different tools like ratio, KPI, balanced scorecard and others it is evaluated that
company is performing in better way. Along with this, it was also inferred that with the
competitor analysis it was evaluated that Landsec is not better in comparison to Segro.

REFERENCES
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Orozco, M., 2020. Reconceptualizing the Enclave: Measuring Success Among Latino‐Owned
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Yordanova, Z., 2021, July. ERP Business Speed–A Measuring Framework. In International
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Springer, Cham.
Online
Our sustainability strategy. 2022. [Online]. Available through: <
https://landsec.com/sustainability/our-sustainability-strategy>