NTUC Fairprice Hybrid System: Business Operation Management and Models

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This article discusses the essential components for effective business operation management and soft system methodology to evaluate the issues that NTUC might face if they decide to introduce a hybrid system. It also compares and contrasts different models used by the sector in which NTUC operates and recommends appropriate solutions to continue being competitive in the market. The article covers topics such as the parcel conundrum, centralized/decentralized inventory and delivery chain, customer value chain, cost implications, and sustainability. The subject is business operation management, and the course code and college/university are not mentioned.

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List of figures
Figure 1 Conceptual model of NTUC Fairprice Hybrid system..............................................6
Figure 2 Rich Picture illustrating part 1....................................................................................11
Figure 3 NTUC Business Process Plan..............................................................................14
Figure 4 Performance Model.....................................................................................................18

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List of tables
Table 1 CATWOE Analysis.......................................................................................................12
Table 2 The customer’s perspective........................................................................................19
Table 3 Financial Perspective...................................................................................................20
Table 4 Internal process perspective.......................................................................................21
Table 5 Innovation and leaning perspective...........................................................................22
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Table of contents
List of figures...................................................................................................................................1
List of tables...................................................................................................................................2
PART 1............................................................................................................................................5
1.1. Essential components for effective business operation management...................5
1.2. Use of a soft system methodology to evaluate the issues that NTUC might face if
they decide to introduce a hybrid system that allow their customer to continue order
goods online and have them delivered to their doors.........................................................7
1.2.1. Soft system methodology.........................................................................................7
1.2.2. Issues NTUC might face........................................................................................9
1.3. Compare and contrast different models used by the sector in which NTUC
operates and recommend appropriate solutions to continue being competitive in the
market, make easier for customers to select and but their product (Issues to consider
centralized/decentralized inventory and delivery chain, customer value chain, cost
implications, sustainability)....................................................................................................11
1.3.1. Business to Business Model..................................................................................11
1.3.2. Business to Government model............................................................................11
1.3. With reference to the parcel conundrum recommend how NTUC should respond to this
conundrum (Keeping in mind the possible technological and environmental CO2 impact).....12
PART 2..........................................................................................................................................14
2.1. Rich picture illustrating part 1........................................................................................14
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2.2. Root Definition for NTUC Fairprice Hybrid Facilities.................................................15
2.3. CATWOE ANALYSIS......................................................................................................15
2.4. ‘AS IS’ Process plan.......................................................................................................18
PART 3..........................................................................................................................................19
3.1. Discuss how managers would turn performance objectives into operations priorities and
the resources that would be necessary for effective implementation of the new process.........19
3.1.1. Performance model.................................................................................................21
3.2. Using a balance scorecard, discuss how the business performance can be
measured post implementation (Refer to the last three years of the company annual
reports and any other relevant data for improvement and target trends for NTUC)....22
3.2.1. Customers perspective...........................................................................................22
3.2.2. Financial Perspective..............................................................................................23
3.2.3. Internal process perspective..................................................................................24
3.2.1. Innovation and leaning perspective......................................................................25

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PART 1
1.1. Essential components for effective business operation management
2. Having many suppliers – NTUC FairPrice do have many suppliers who provide the
necessary commodities required by their potential as well as prospective customers.
They understand to a great extent what it means for customers to fail to get the
necessary commodities at their disposal when they need them most. (Anon, 2016)
This has enabled NTUC FairPrice to retain most of their potential customers while
on the lookout for more prospective customers.
3. High capacity center for distribution - NTUC FairPrice has a huge center for
distribution called the FairPrice Hub which has Warehouses, shops, and restaurants
where the customers can buy goods/foodstuff in bulk and enjoy the economy of
scale while saving some money. The distribution centers also have a variety of
products which they deliver to their respective outlets to enable their customers to
have a wide variety of choices (Insley & Nunan, 2014).
4. Improving customer experience – NTUC FairPrice has over the years put in place
progressive measures to improve their customer experience. These are inclusive of
many options implemented to aid the customer to pay after purchasing the products
more conveniently. The latest improvement that has been put in place by NTUC
FairPrice is the self-checkout machines used to pay for goods by either notes or
coins.
5. High rate of order fulfilment - The NTUC FairPrice has put in place various
automation systems to aid in the production and packaging the various customer
orders, by using the technology of Caddy Pick’s the workers had managed to
increase their product twice and this has greatly enhanced the rate of fulfilling the
orders form their potential customers. (DiSanza & Legge, 2005)
6. High Quality and Environment-friendly products – NTUC FairPrice has over the time
rise to dominate the market in Singapore, due production of very high quality and
environmentaly friendly product which are readily available for their customers on
the online platform as well as in their various shopping centers and distribution hubs.
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7. Free delivery of goods purchased online – NTUC FairPrice offers special free
delivery for goods purchased online, as a result, the effectiveness and the efficiency
of the business in Singapore have doubled off the years. It has enabled NTUC
FairPrice to meet their customer demands and add more value to their already high-
quality products.
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1.2. Use of a soft system methodology to evaluate the issues that NTUC might
face if they decide to introduce a hybrid system that allows their customer to
continue order goods online and have them delivered to their doors.
1.2.1. Soft system methodology
1.2.1.1. Conceptual Model
The first step of establishing this system will be to identify a potential and present
customers in order to understand which products the customers want to be delivered to
their doorsteps. (Patel, 2010) The company would then have to analyze all the products
that available in the online portal for delivery. The company would then have to develop
a system that will allow its customers to sign in or register, place an order, collect all
payment dues using a visa or MasterCard and get selected goods to be transferred to
the customer’s doors bay the packaging and delivery Team. For the company to stand
out, it has to identify a major competitive advantage for the organization (Hughes .G,
2013) i.e. delivering goods to a consumer’s door. The company would then have to
strategy on which routes they will be using to deliver goods to the customer in the most
convenient and cost-effective means. (Stavola, 2016)

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Figure 1 Conceptual model of NTUC Fairprice Hybrid system
â‘¥
Consider competitors
â‘ 
Identify Potential and
present customers and
understand their wants
⑤
Define a Distinct competitive
advantage for the organization
â‘£
Develop a packaging and
delivery Team
â‘¢
Make an online ordering and
delivery facility
Material of products
â‘¡
Analyze Current Online
Products
⑧
Execute an ordering and
delivery activity to
strategize
⑦
Strategize on goods and
routes to deliver
Consider competitors
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1.2.2. Issues NTUC might face
2. The high cost of delivery of goods - NTUC FairPrice is very established retail
serving a vast number of customers thought-out Singapore. With the introduction of
hybrid facilities which will allow their customers to continue to order goods online
and have them delivered at their doorsteps will results in extra cost on the delivery
of the goods. It will require new equipment and more employees for delivery which
will substantially
3. increase the cost of delivering the goods once they are ordered for online. Hayes
and Wheelwright (1984) outlined a four-stage model that a company should use to
maintain a competitive advantage over its competitors: cost, elasticity, reliability,
and quality. When the cost of delivering goods to a customer becomes unbearably
high, then the customer will look for another alternative that is cheaper than that
option. Therefore, in order to maintain a competitive advantage, NTUC Fairprice
ought to ensure that the cost of delivery is low.
4. Substantial reduction in the profits margins (J.H., 2017) - The customers always
have a tendency to get quality assurance and faster delivery of goods while not so
willing to pay for the convenience fee. Effectively and efficiently harmonizing the
actual cost of the product and delivery cost will lead to substantial reduction of profit
per product will ultimately affect the overall profit margins of NTUC FairPrice.
According to a customer’s Lifetime Value simple model, the NTUC company ought
to look at their customer’s value before using their resources to acquire them. For
instance, if a customer has a lifetime value of $80 then it would be needless for the
company to use $150 to acquire and retain that specific customer.
5. Delivery inefficiency - Due to the vast number of customers that NTUC FairPrice
serve every day, with the introduction of the hybrid facilities which will allow their
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customers to continue to order goods online and have them delivered to their
doorsteps will be prove very difficult to meet the delivery threshold for the
customers and especially if the deliveries are urgent. The time of delivery, the
quality of goods to delivery and the cost of delivering the goods to the doorsteps
will post a great change for efficient goods delivery for NTUC FairPrice. According
to a five gap service model, there exists a space between what customers would
wish and what managers wish the service quality to be. The managers might think
that they are delivering their best service yet it might not really meet the customer’s
service quality expectation (Giao, 2002)
6. 5The changing customer behaviors. According to the four Vs perspective, a
customer’s volume, variety, variation and the visibility dimensions are likely to
change over time. There is, therefore a need for the company to be flexible enough
to meet different volumes of orders placed, have a variety of products, deliver
goods in time or within the timeframe required and most importantly trace their view
of the delivery process. Through this, the company will be able to keep in touch
with the customers’ expectations and to satisfy their changing needs (Paddock,
2011).

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1.3. Compare and contrast different models used by the sector in
which NTUC operates and recommend appropriate solutions to continue
being competitive in the market, make easier for customers to select and
buy their product (Issues to consider centralized/decentralized inventory
and delivery chain, customer value chain, cost implications, sustainability)
1.3.1. Business to Business Model
This is a type of model where the buyer and the seller are both businesses. It, therefore
implies that one business will sell its products to the other business which in this case
will buy the products through the internet. (Anon, 2016)This business model is similar to
the business to Customer model since the customer value is the same. However, the
Business to Business model differs to a great extent to the Business customer model
since the sustainability is high and cost implication is low for the Business to Business
model as compared to Business to Customer model. This is one of the most promising
model to be used by NTUC as it encourages bulk purchase of products.
Business to Consumer Model
Essentially refers to a business model in which business sells its products to the
consumer, through the internet. This business model is similar to the Business to
Government model since they both have lower cost implication, however this business
model differs to the Business to Government model as it has a very high sustainability
rate, its delivery chain is also quite straightforward since you will not have to go through
rigorous process to have the goods delivered, (Amatucci & Grimm, 2011)it also forms
the bulk of the buyers of from NTUC. For NTUC to continue being competitive in the
market then it is very key for them to improve as possible the customer relations and
invest in this model. (Nagaty, 2010)
1.3.2. Business to Government model
Business to Government model is where the business sells its products to the
government through the internet. This model is much similar to the Business to
Business Model where the sustainability is high as goods will be delivered in bulk.
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However, this business model is different from the Business to Business model as it
does not allow easy and straightforward delivery chain. NTUC should embrace
Business to Government Model so as to enable the mass sale of its products (Anon,
2017).
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1.3. With reference to the parcel conundrum recommend how NTUC should
respond to this conundrum (Keeping in mind the possible technological and
environmental CO2 impact).
To effectively implement the hybrid facility which will enable the delivery of goods to the
doorstep of their respective customers, it is very key for NTUC to focus closely on the
particular location of their customers prior to the delivery, this should be done through
the use of phone calls, text messages or emailing the customers. This in effect will help
to curb the problem of missed-delivery of goods, it will enable the delivery team to
successfully deliver the goods, and it will also enable the company to minimize the cost
of missed deliveries. (Bomford, 2012)
NTUC should be very time cautious when it comes to the delivery of goods to their
customers, they should also have a delivery team which can be able to strike a good
rapport with their customers for the very first time of their meeting. This will enable them
to meet their customers’ expectations and avoid keeping their customers waiting for
hours for the delivery of goods. (Visee, 2010) This will in effect build good customer
relation and boost their confidence in the organization.
NTUC should implement high take technology for enabling the customers as well as the
delivery team to note precisely their locations during the delivery, for instance, they
should implement a suitable online tracking system by using GPS technology integrated
in a smartphone application. This will enable smooth delivery and efficient time
management.
For NTUC to build firm trust with their customers especially during the delivery of the
goods then it is imperative that the NTUC should do personal delivery using its special
delivery team or if they opt to have some delivery organization do for them this work
then they will have to inform the customers in prior about the organization, it is also
worth noticing that NTUC should have the best of the delivery organizations, this will go
a long way to winning the trust of the customers.
Goods delivery by the NTUC using personal couriers or the couriers form hired
organizations should be limited in the number of times they should attempt to deliver the

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goods to the customers, although couriers emit less CO2 to the environment as
compared to the individual customers driving to pick the goods to the customers. This
limitation will help to preserve the environment at large.
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PART 2
2.1. Rich picture illustrating part 1
Figure 2 Rich Picture illustrating part 1
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2.2. Root Definition for NTUC Fairprice Hybrid Facilities
A new NTUC Fairprice owned hybrid system that allows current and prospective
customers to continue to order for goods of the company online and get them delivered
to their doors by the most suitable cost-effective and convenient means. (Karve, 2011)
Table 1 CATWOE Analysis
2.3. CATWOE ANALYSIS
Customer or client [C] Current and prospective customers
Actor [A] NTUC Fairprice company
Transformation [T] order for goods online and get them
delivered to their doors.
Weltanschauung [W] Giving the most suitable delivery to a
certain customer will encourage a
continuous online ordering of goods from
the company
Owner [O] The company
Environmental constraint [E] Suitable cost effective and convenient
means

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NTUC Business Process plan
Statement of scope
Developing a software-based Hybrid System for NTUC Fairprice customers to continue
to order and get goods delivered to their doors.
The desired outcome
The desired result is that NTUC customers will continue to order and get company’s
products delivered to their doors using a suitable cost-effective and convenient means.
(Barrow, et al., 2012)
Process flow
The process flow for the Hybrid system starts with an order being placed by the NTUC
Fairprice customer through the company’s online website to purchase a preferred
company product. This order is then received and saved after which the system
prompts the customer to enter his/her address,the timeframe in which the good should
be availed, plus the credit card details(Visa). (Anon, 2018) Once the information is
entered and accepted by the system all due payments are collected and a command is
sent to the packaging and delivery section where the selected good is packaged in the
best and safest way. A suitable cost-effective and convenient means is then selected
and then used to transfer the goods to the customer by either rail, road or air (Amatucci
& Grimm, 2011).
Business rules (Gonzalez-Benito, 2010)
A customer should enter a valid address
A customer should pay before delivering the good to his/her door
A suitable cost-effective and convenient mean is selected
Proper packaging to be used
A realistic time frame to be set by the customer
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Exceptions
In instances where the information entered by a customer is incorrect, use of unrealistic
time frame to be delivered and when an invalid Visa has been used, the process is
terminated. (Boyer, et al., 2010)
Figure 3 NTUC Business Process Plan
place an
order
enter
address
and visa
details
collect
all dues
package
Deliver
goods
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2.4. ‘AS IS’ Process plan
The NTUC Fairprice is has a website that sells all varieties of products ranging from
foodstuffs to drinks. These services are available for registered members only. Payment
for purchased products is through Visa or MasterCard. The company is managed by a
board of directors who control and regulates its activities (Anon, 2018). Despite the use
of this online platform to market its products, very few individuals have access to its
services due to the restriction that services are only provided to registered members.
Also, the company’s profit margin has gone down in the recent years between 2014 and
2015. Upon purchase of goods, members are able to acquire their products. (G, 2002)
2.5. ‘TO BE’ Process plan
The NTUC Fairprice company hopes to introduce a hybrid system that will allow
customers to continue ordering for goods and get them to be delivered to their doors.
(Flynn, 2011) It is expected that the Hybrid system will help increase the sales and
thereby increase the profit margin. The company hopes to provide a package and
deliver products to customers using a suitable cost effective and the most convenient
means. The overall result will be increased sales and high profit to the company.
(Bradford, et al., 2012)

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PART 3
3.1. Discuss how managers would turn performance objectives into
operations priorities and the resources that would be necessary for effective
implementation of the new process
The managers of the NTUC FairPrice can best turn their performance objectives into
operations priorities by:
Gathering and analyzing data which are very key to the performance objectives, they
should gather data on the approximated cost of delivering goods to their customers, the
substantial reduction of the profits margins should the goods delivery be implemented,
the consequences of inefficient delivery of goods and the impact of the unchanging
customer behavior on the hybrid facilities (Amatucci & Grimm, 2011).
After gathering and proper analysis of the data, the next operation of the managers
should be to evaluate the data and critically outline the correspondence of the result
with the actual goals of the NTUC Fairprice. This will inform the managers if they should
continue with the implementation of the hybrid facility by having a proper knowledge
about its effectiveness.
With the realization that the hybrid facility is effective then the next operation of the
manager should be to develop critical strategies and solution on how to actualize fully
the hybrid facility within NTUC, this should involve meeting with the special delivery
team of the NTUC, bring on board the other actors including the organization which they
opt to help them the delivery of goods the customers, it should also include the
packaging team of the company.
To finalize the whole process, the managers of NTUC should fully implement the
solutions to the full implementation of the hybrid facility by using the developed
strategies. This will enable them to fully put into effect the new system (M, 2008).
The key resources that will be very necessary for the implementation of the hybrid
facility in NTUC are inclusive of: more employees especially for the delivery team, the
technical experts who will be receiving the order, location and the specifics of the order
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to be delivered and the special team to package and clearly label the orders according
the specifics, adequate funds which will bring to effect the technology to be used the
implementation the new process, purchase adequate couriers, employee the addition
employees and to high the other couriers, the delivery couriers for NTUC, the other
couriers organizations which the company would opt to use as part of the
implementation of the hybrid facility. (Doyle, 2008)These resources are very key to the
implementation of the new process and they will have to incur a cost as they are
secured by the management of NTUC Fairprice.
The cost of fully implementing the new process can be overwhelming for the very first
time especially if NTUC have to use a special delivery team as well as purchase special
delivery couriers to fully meet the implementation of the process. Since NTUC has a
vast number of customers throughout Singapore, opting for other courier organization
will be much expensive in the long run. The cost of combining the same can bearable
by the management for the very beginning of the implementation of the new process.
The cost of recruiting more employees to effect the implementation must be critically
considered by the management, this should have minimized since the employees will
be in the organization as long as the system is in play. (Deng & Wang, 2016)The
management should have all the employees perform their tasks to their best so as to fill
the gap of the number of employees NTUC can have for effective implementation of the
new process. The cost of introducing the new technology which will help to trace the
customer location must also be clearly outlined before the actual implementation, this
will depend on the technology which they will opt to use.
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3.1.1. Performance model
Figure 4 Performance Model
collect and analyze data
Evaluate Data
Strategies and solutions
solution implementation

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3.2. Using a balanced scorecard, discuss how the business
performance can be measured post-implementation (Refer to the last three
years of the company annual reports and any other relevant data for
improvement and target trends for NTUC).
Table 2 The customer’s perspective.
Objective Specific Measures
Delivery time On time delivery
Goods to be delivered Appropriateness and high-quality goods
Cost Low-cost delivery
3.2.1. Customers perspective
This essentially refers to the perspective of the customer or how the customer will view
NTUC after the implementation of the new process. (Dispalatro, 2011)The performance
of the business from the perspective of the customer will improve depending on the
level of success of the new process as far as fulfilling the customers’ demands is
concerned. If the hybrid facility meets the customer expectation then the performance of
the business will likewise improve and if the hybrid facility fails to meet the customers’
expectation then it will result to the customer looking for alternative retailers to satisfy
their needs, this will result in a reduction of performance rate by NTUC.
The different views of the customer towards NTUC that will affect to a great extent its
performance are inclusive of (Joshi & Shamra, 2014)The time of delivery of goods to the
customers form the retail shops, the time can be as scheduled, earlier than the
scheduled time or much late as per the scheduled time, each of these will informed the
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customers’ view of the NTUC, also the qualities and appropriateness of the goods
delivered to the customers as some delivery may be missed – deliveries where the
customer received goods which they never ordered for or fails to receive the goods. The
cost of the delivery as will be implemented by the hybrid facility will also shape to a
great extent the view of the customer toward NTUC. These views of customers will have
an overall effect to the performance of the NTUC after the implementation (Brown,
2012).
Table 3 Financial Perspective
Objective Specific Measure
Growth Progressive growth
Revenue Continuous increase in the rate of
revenue growth
Profitability Highly profitable
Capital requirement Reduction in capital requirement
3.2.2. Financial Perspective
The Financial perspective basically deals with the view of the stakeholders on the
performance of NTUC after the implementation of the new process, it also looks into
how the stakeholders view the NTUC in terms of financial achievements after the
implementation of the hybrid facility. Since the financial perspective is determined by the
organization’s stage in its life cycle, therefore the financial perspective from the
stakeholder’s point of view will involve the growth of the NTUC, which will see through
the rate of revenue growth, (Roussa & Mccaskill, 2015) the profitability and the cash
flow as well as the capital requirements reduction. (David P. Norton, 2010)The
performance of NTUC can, therefore be measured appropriately from the financial
perspective, with negative growth rate will inform the management of poor performance
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of the hybrid while with improved growth rate will inform the management of high and
improved performance rate of NTUC.
Internal Process Perspective
Table 4 Internal process perspective
Objective Specific Measure
Labeling Proper labeling of goods before delivery
Time Excellent time management
Fuel Use Minimize the use of fuel
Delivery 100% reduction in missed delivery
3.2.3. Internal process perspective
The internal process perspective critically outlines the processes within NTUC with
respect to the hybrid facility crucial for meeting the demands of the customers and the
stakeholders. These may be inclusive of, proper labeling of the goods before the actual
delivery, excellent time management by the delivery team, Minimizing the fuel use and
he missed-delivery. With these process clearly outlined by the management then the
performance rate to NTUC will improve after the implementation of the hybrid facility. It
will lead to building trust with the potential customers as well as draw more perspective.
It will also lead to increase of profit margins. Else the performance of the NTUC after the
implementation of the hybrid facility will drastically be affected.
Innovation and learning perspective

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Table 5 Innovation and learning perspective
Objective Specific Measure
Employee training Tactics for approaching customers and
creating good rapport during delivery
Number of products Increase the production capacity
Research Discover new development and
production methods
3.2.1. Innovation and leaning perspective
This essentially deal with how the NTUC innovate, improve and learn as it prepares to
meet its set objectives. The key objectives are more inclined to the welfare of the
employees; (Zulkiffli, 2014)it seeks to outline the preparedness of the NTUC to improve
on creating value with respect to the hybrid facility. When the NTUC employees learn
the key tactics of approaching their customers especially at the delivery point and the
various routes within the locality of the range, then it will greatly impact the performance
of the company as opposed to inadequate knowledge about the geographical locations
of the locality. Innovation on the part of the company on the better way to improve the
hybrid facility will go a long way to improve the performance of the company over-rally.
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