Assignment on Operational Overhaul

Running head: OPERATIONAL OVERHAUL
Operational Overhaul
Name of the student
Name of the university
Author Note:

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Table of Contents
Part 1................................................................................................................................................1
Part 1.1. Strategy map of The Business:..........................................................................................1
Part 1.2. SWOT analysis of The Business:......................................................................................1
Strengths:.....................................................................................................................................2
Listed on the ASX:..................................................................................................................2
Autonomy to take business decisions:.....................................................................................2
Present in multiple locations:...................................................................................................2
Weaknesses:.................................................................................................................................2
Subsidiary status:.....................................................................................................................2
Lack of financial planning:......................................................................................................3
Weak product strategy:............................................................................................................3
Weak human resource management:.......................................................................................3
Opportunities:..........................................................................................................................4
Restructuring of the floor management:..................................................................................4
Product innovation:..................................................................................................................4
Threats:........................................................................................................................................5
Lack of development in the industry:......................................................................................5
Part 2. Defining the objectives including in the strategy map and explanation of their importance:
.........................................................................................................................................................5

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Marketing superior products aligned with the expectations of the customers:...........................5
Giving positive returns on investments to the investors:.............................................................6
Empowerment of employees:......................................................................................................7
Generating higher profits:............................................................................................................7
Part 3................................................................................................................................................9
Part 3.1. Balance score card with measures, targets and initiatives:...............................................9
Part 3.2. Action for the strategy development:................................................................................9
Part 4. How the balance scorecard will help achieving the overall strategies:..............................11
Part 5. Evaluation of how the BSC will promote goal congruence:..............................................12
Part 6. Memorandum to John Clarkson:........................................................................................12
References:....................................................................................................................................14

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Goods are marketed as per the
expectations of the customers
and provision of superior
customer services
Customer
sattisfaction The business generates
higher revenue
Higher ROI
Restructuring of
operations,
empowerment of
employees through
training
Employees provide
better customer services
More investments
Stronger
operationsHigher market
position
Part 1.
Part 1.1. Strategy map of The Business:
Part 1.2. SWOT analysis of The Business:
The following is the SWOT analysis of the company under study, The Business:

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Strengths:
Listed on the ASX:
The Business is owned by a company which is listed on the ASX. Mahdaleta (2016)
mentions that the listing on stock exchanges enable the listed firms to generate capital from the
securities market by issuing shares. As far as The Business is concerned, the holding company is
listed on the ASX which means the former is able to obtain capital from the latter.
Autonomy to take business decisions:
The Business, though owned by a grocery and liquor retailing chain, the company is
allowed to maintain its autonomous position. The company is allowed to maintain its brands and
identity. This means that the management body of The Business is allowed to take business
decisions which would enable them to strengthen the operations of the company (Szałucka
2016).
Present in multiple locations:
The Business is present in multiple locations in Australia like Victoria, New South Wales
and Queensland. This enables the company to gain access to a huge customer base to market its
products and generate revenue.
Weaknesses:
Subsidiary status:
The Business is a subsidiary company and is subjected to control of the grocery and
liquor retail company owning it. The company owing to its subsidiary status does not have any
direct access to the capital market and cannot raise capital directly. In fact, it is dependent on the
funds allocated by the mother company. This dependency on the fund allocations by the mother

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company restricted the capacity of the management of The Business to take decisions and
implement them. Thus, in order word, the subsidiary status to a great extent limited the capacity
of The Business to make strategic business decisions.
Lack of financial planning:
The Business suffers from gross lack of financial planning. The key financial data
provided shows that the total asset of the company is A$ 1700 while the total liability is A$ 372.
This means that A$ 1328 is the equity capital. The firm is expected to give 12% return to the
investors on their investment. However, the firm fails to give any return to its investors or in
other words, the firm is generating negative returns on investment. The operating profit of the
firm is $ 1000 but generated a net profit before tax of $0. This means that the firm is not able to
manage its expenses in order to generate sufficient net profits to cover at least the cost of capital.
This analysis of the financial statement shows that the company lacks in financial planning.
Weak product strategy:
The Business has a very weak product strategy. This is evident from the fact that products
which the firm markets were not aligned with the preferences of the customers. The firm does
not order modern products and charges very high prices for its products. The rate of discount
which is offered are as low as 5% while the higher rate of discount of 20% is limited to a few
products so that they could be sold. Thus, one the point out that the products strategy of the firm
is not customer centric.
Weak human resource management:
The Business suffered from a very weak human resource management system. This is
evident from the fact that the employees are not provided training on products. They as a result
lack the knowledge about the products required to serve customers. In fact, the management of

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the company deploys insufficient number of staff to assist the customers locate products in the
store. Thus, one can point out that weak human resource management strategies of The Business
ultimately results in low level of customer satisfaction which finally proves detrimental for the
revenue generation of the firm.
Opportunities:
Restructuring of the floor management:
The company should restructure its floor management strategies to ensure more efficient
operations. First of all, the management should install modern lighting systems which would
illuminate larger floor areas but consume less energy compared to their older counterparts. This
would enable the company reduce its floor expenses. Similarly, the firm should have placards or
boards mentioning the names of specific products installed in specific places. This would enable
the customers locate products more quickly. Thus, restructuring the floor management strategies
would enable the company reduce its expenses like electricity expenses and floor management
expenses.
Product innovation:
The company should carry out product innovation to market more customer aligned
ranges of products. For example, it should offer modern hardware products at legitimate prices
and discounts rates. This would enable the company to offer products which would be more
aligned to the preferences of customers and generate higher revenue.

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Threats:
Lack of development in the industry:
The case study mentions that the most of the firms operating in the Australian hardware
industry are small scale firms. This lack of development in the industry limits the ability of The
Business to collaborate with other firms to carry out open innovation.
Part 2. Defining the objectives including in the strategy map and explanation of their
importance:
The following are the main objectives of the strategy map:
Marketing superior products aligned with the expectations of the customers:
The first objective of the firm should be offering superior quality modern products which
would be aligned to the expectations of the customers. The importance of this strategy is that
providing superior quality products would ensure customer satisfaction and enable the firm
acquire a loyal base of customers who would purchase products from the firm on repeated basis.
Hamilton, Rust and Dev (2017) mention that business organisations should consider the aspects
of customer satisfaction and investors capital maximisation while forming product strategies.
This is because creation of customer satisfaction generates high revenue which ultimately leads
to giving high ROI to investors. In other words, marketing superior products to customers results
in customer satisfaction which is directly linked to attract more capital. However, the case study
clearly mentions that The Business markets old fashioned products at illegitimately high prices
which results in customer resentment instead of gaining customer satisfaction. This results in
generation of poor revenue which means that the company is not able to giving high ROI to
investors. This is evident from the fact the company in spite of generating revenue, is not able to
give ROI to investors. Haverila and Fehr (2016) stress on the importance of offering superior

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products by pointing out that companies instead of offering superior products only to generate
revenue in the short term, should aim to gain their continuous support by building long term
relationships. One can point out in the light of the case study that The Business markets inferior
products at very high prices, thus resulting in customer resentment. The company earns low
revenue and eventually undermines the interests of the investors. This means that the company
would go on to lose support of investors in the due course if its management does not set
objectives to deal with the situation on highest priority. Thus, The Business should market
superior quality products as per the customer preferences at legitimate prices. Thus, The
Business, by achieving this objective would be able to source a steady stream of revenue from
this existing customer base. This would provide the firm the financial base which would support
its marketing strategies to acquire new customers.
Giving positive returns on investments to the investors:
The second objective of The Business would be gaining positive return on the
investments to the investors. Hoffmann, Brønn and Fieseler (2016) mention that the ability of
giving ROI enables the companies to building up strong goodwill among the investors which
enable them to attract more capital. Holderness (2018) points out that shareholders’ support
enables the companies lower their respective stock issuance costs. Thus, it transpires from the
discussion that The Business should aim to give higher returns on investors to attract more
capital at lower issuance costs. However, the financial statement clearly shows that the firm fails
to give ROI to investors which means that the investors would divest in its shares in future. This
would mean that the firm would generate low capital which would ultimately jeopardise its
operations. Thus, it can established that the firm should aim at giving high ROI to the investors
because it would enable the firm attract more investments which would in turn strengthen its

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operations. In fact, this would bring down capital issuance costs which would ultimately boost its
net profit.
Empowerment of employees:
The third objective of strategy map of The Business would be empowerment of
employees. Loy et al. (2019) mention that employees with critical thinking skills and decision
making capabilities have the ability to offering superior customer services which leads to
customer satisfaction (objective 1). The case study clearly mentions that the employees of The
Business lack product knowledge and are not able to superior customer services which
eventually leads to poor customer satisfaction. Thus, the management should set empowerment
of employees as its third important objective. This means that the firm would have to provide the
employees training and mentoring in order to improve their skills as well as knowledge. The
importance of the strategy lies in the fact that empowerment would enable the employees would
enable them to provide superior services to customers would in turn create higher level of
customer satisfaction. This would ultimately pave ways for generating high revenue.
Generating higher profits:
The ultimate aim of the company should be generating higher profits. Vo et al (2017)
while stressing on the interdependent relationship between customer satisfaction and profit
generation mentions, ‘a high level of customer happiness should generate high customer
base, resulting in high expected cash flows as well as expansion opportunities for the firm
in the future.’ This means that just like customer satisfaction is important profit generation,
firms in order create customer satisfaction need to generate high profits. The case study clearly
mentions that The Business generates revenue but is not able to generate net profits. This means
the revenue of the company is just enough to cover its expenses. Thus, it transpires from

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discussion that the firm should obtain the objective to generate higher revenue so that it would be
able to generate high net profits after covering all the expenses. This would in turn enable it
support its previous objectives by providing them with a strong financial base.

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Part 3.
Part 3.1. Balance score card with measures, targets and initiatives:
Elements Measures Targets Initiatives Timeline(
months)
Customers Superior goods Higher profits Appropriate marketing 6
Financial
operations
Higher profits,
lower expenses
Higher capital
and revenue
generation
6
Internal
operations
More vast
operations
More
productivity
Training of employees 6
Organisational
capacity
Restructuring of
floor
management
strategies
Sustainability Training of employees 6
Vision and
strategy
More
conductive work
environment
More
conductive work
environment
Empowerment of
employees
6
Part 3.2. Action for the strategy development:
The following actions which would be considered by The Business to develop strategies
to improve its overall function:

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Activity Strategies to cause operations overhaul at The Business Time
(days)
1
Management holds meetings with departmental heads to achieve operation
overhaul in The Business 3
2
The management instructs the marketing department to gain customer
information to initiate the operational overhaul. 69
2.1
The floor staff conduct customer surveys to gain information about their
expectations from the firm in terms of products and prices including discounts 60
2.2 The floor staff submit survey results to the marketing manager 7
2.3
The marketing collates the survey and presents before the management and
the other depratmental heads. 2
3
The management holds meeting to discuss the survey findings in presence of
all managers including marketing manager. 2
4 The management forms the product strategies. 7
5
Floor managers presents recommendations for installing new lightings over
the shop floor 4
6
Budget allocation (including determination of profits to be achieved as the
outcome of the implementation) 18
6.1
The finance managers forms the budget showing costs (including electricty
costs) and target profits with the other departments like marketing and
procurement giving their inputs
7
6.2 Budget presented before the managements and discussion held. 4
6.3 Management of the mother company approves budget 7
7 Procurement of resources 120
7.1 New hardware goods procured 60
7.2 Floor refurnished with modern lightings and goods racks 60
8 Restructuring of staff deployment strategies on the shop floor 8
8.1 Floor staff trained 5
8.2 Deployment of more managers and staff on the floor 3
9
Monitoring of the incrase in customer footfall and revenue generation.
Simultaneous monitoring of the floor management costs. (KPIs) 90
10 Further actions 30

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Strategies to cause
operations overhaul at
The Business
Management holds
meetings with
departmental heads to
achieve operation
overhaul in The
Business
The management
instructs the marketing
department to gain
customer information to
initiate the operational
overhaul.
The floor staff conduct
customer surveys to gain
information about their
expectations from the
firm in terms of products
and prices including
discounts
The floor staff submit
survey results to the
marketing manager
The marketing collates
the survey and presents
before the management
and the other
depratmental heads.
The management holds
meeting to discuss the
survey findings in
presence of all managers
including marketing
manager.
The management forms
the product strategies.
Floor managers presents
recommendations for
installing new lightings
over the shop floor
Budget allocation
(including determination
of profits to be achieved
as the outcome of the
implementation)
The finance managers
forms the budget showing
costs (including electricty
costs) and target profits
with the other
departments like
marketing and
procurement giving their
inputs
Budget presented before
the managements and
discussion held.
Management of the
mother company
approves budget
Procurement of
resources
New hardware goods
procured
Floor refurnished with
modern lightings and
goods racks
Restructuring of staff
deployment strategies on
the shop floor
Floor staff trained
Deployment of more
managers and staff on the
floor
Monitoring of the incrase
in customer footfall and
revenue generation.
Simultaneous monitoring
of the floor management
costs. (KPIs)
Further actions
Part 4. How the balance scorecard will help achieving the overall strategies:
The balance score of The Business would help in achieving the overall strategies by
building strong coordination between the five components. They are financial, customer, internal
processes, organisational capacity and vision along with the strategies. For example, providing
superior goods to customers would create customer satisfaction which in turn would lead to
generation of revenue which in turn would strengthen the next element namely, financial

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capacity. This would in turn lead to strengthening of the internal processes by acquisition of
superior manpower and goods. This would in turn strengthen the next element namely,
organisational capacity (Cheng, Humpreys and Zhang 2018). This is because, as the financial
and operational strength of the company would increase, it would enable it acquire more
experienced and skilled manpower. This in turn would boost the overall organisational
capacity. These four constituents would stand on the central constituent namely, the vision and
strategies (Al-Zwyalif 2017). The vision of The Business would be value creation of
stakeholders by offering superior products and bringing about continuous improvements in all
the aspects of business. The mission of The Business would be generation of higher profit by
marketing superior products and create values to its stakeholders including investors, customers,
employees as well as the community as a whole (Tizroo et al. 2017).
Part 5. Evaluation of how the BSC will promote goal congruence:
An evaluation of the interrelatedness of the five elements of the balance scorecard above
shows that it would promote goal congruence. This is because, first of all, the balance score card
of the company right at the first stage take into account the interests of the customers, protection
of which would lead to generation of revenue (Al-Zwyalif 2017). The BSC then goes on to
explore the financial aspects of the business which in turn strengthen the internal operations of
the company like empowerment of employees. This would in turn strengthen the organisational
capacity of the company. Thus, it can be established strongly that the BSC of The Business
would lead to strengthening of goal achievement (Lakshmi and Rao 2017).
Part 6. Memorandum to John Clarkson:
To. John Clarkson

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Form…..(name of the sender)
Date. January 20, 2020
Subject: Summary of the findings and strengths of the balance score card.
The analysis of the present business operations of The Business reveals that the firm is extremely
weak in terms of operations. The management of the firm should set objectives which would
enable it to bring about improvement in its operations. The management of the firm should form
and implement strategies to achieve the objectives. As far as the balance score card is concerned,
its strength lies in the fact that it is aligned with the objectives and would facilitate continuous
improvement in The Business.

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References:
Al-Zwyalif, I.M., 2017. Using a balanced scorecard approach to measure environmental
performance: a proposed model. International Journal of Economics and Finance, 9(8), pp.118-
126.
Cheng, M.M., Humpreys, K.A. and Zhang, Y.Y., 2018. The Interplay between strategic risk
profiles and presentation format on managers strategic judgments using the balance
scorecard. Accounting, Organization and Society, 30, pp.1-14.
Hamilton, R.W., Rust, R.T. and Dev, C.S., 2017. Which features increase customer
retention. MIT Sloan Management Review, 58(2), pp.79-84.
Haverila, M.J. and Fehr, K., 2016. The impact of product superiority on customer satisfaction in
project management. International Journal of Project Management, 34(4), pp.570-583.
Hoffmann, C.P., Brønn, P.S. and Fieseler, C., 2016. A good reputation: Protection against
shareholder activism. Corporate Reputation Review, 19(1), pp.35-46.
Holderness, C.G., 2018. Equity issuances and agency costs: The telling story of shareholder
approval around the world. Journal of Financial Economics, 129(3), pp.415-439.
Lakshmi, S. and Rao, S., 2017. Implementation and Practicalities of Balance Scorecard: A Case
Study. Asian Journal of Applied Science and Technology (AJAST) Volume, 1, pp.61-67.
Loy, M.C., Coe, B., Gordon, H. and Hernández, E., 2019. The CHAMP Model for Critical-
Thinking and Decision-Making: Empowering Employees and Teams to Become High-
Performing Thinkers and Doers!: A Theoretical and Practical Training Handbook for Leaders.

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Mahdaleta, E., 2016. Effects of capital structure and profitability on corporate value with
company size as the moderating variable of manufacturing companies listed on Indonesia Stock
Exchange.
Szałucka, M., 2016. Decision-making subsidiary autonomy in Polish multinational enterprises:
Results of an empirical study. International Business and Global Economy, 35(2), pp.309-322.
Tizroo, A., Esmaeili, A., Khaksar, E., Šaparauskas, J. and Mozaffari, M.M., 2017. Proposing an
agile strategy for a steel industry supply chain through the integration of balance scorecard and
Interpretive Structural Modeling. Journal of Business Economics and Management, 18(2),
pp.288-308.
Vo, L.V., Le, H.T.T., Le, D.V., Phung, M.T., Wang, Y.H. and Yang, F.J., 2017. Customer
satisfaction and corporate investment policies. Journal of Business Economics and
Management, 18(2), pp.202-223.