Luxe Fashion Retail Limited: Balanced Scorecard Evaluation Report

This report provides a comprehensive analysis of Luxe Fashion Retail Limited's balanced scorecard, a strategic performance management tool. The report examines the company's approach to customer value, including reward systems and customer relationships, and evaluates key performance indicators (KPIs) across financial, operational, and growth perspectives. It contrasts the implementation of these measures at an organizational level versus individual stores, highlighting the challenges and adaptations required. The report also discusses the significance of operational and growth KPIs in individual businesses and links these KPIs to LFR's overall business strategy, focusing on how the company aims to improve customer experience and achieve its objectives. The analysis includes relevant references to academic literature supporting the concepts discussed.

NAME
STUDENT ID
SUBJECT
DATE

LUXE FASHION RETAIL LIMITED
QUESTION 1
A balanced score card is a toll that is used to identify and improve different internal functions as
well as their effects to the external environment, basically, it is a strategic performance
management tool (De Geuser et al, 2009). The score card in the LFR Limited basically focuses
on ensuring that the customer is treated with the best care and is comfortable. The procedures
and activities carried out to ensure that are those that are mentioned in the score card. The
business’s aim is to be able to attract new customers as well as maintain its current customers.
Therefore, the management team of the business focuses on ensuring that all of the above
business functionalities are performed to their optimum and achieved the results intended.
b) OBJECTIVE MEASURE IN FORM OF KPI
Financial Perspective
Objective Comments KPI Comments
Increase in revenue Should increase the
number of product
sales
Extend the market
share and segment by
creating new
customers and
markets
Measure the revenue
percentage received
from the new
products
Measure both product
and customer
profitability
Measure the
percentage of
customer increase
As long as the
activities leading to
change in business
financial position are
kept in check, the
KPI will be easily
identified and
achieved.
Customer Value
Customer
Close customer
relationships
Customer value to
the loyal customers
Reward and
special
treatment
accordingly
Effective and
efficient customer
experience

towards loyal
customers
Reward and special
treatment accordingly
Gold or silver
privilege cards
provided for use
Increase in the
number of customers
with the cards and
given such treatment
When the number
increases then the
objective has already
been achieved
Effective and
efficient customer
experience
Employees entertain
and help the
customers when
shopping
Increase in the
number of customers
shopping in the
business
When the number
increases, the
objective is said to be
attained
Close customer
relationships
Forming professional
friendship
relationships with
customers
The more the
customers trust and
enjoy shopping from
the business
the more the
customers become
comfortable the more
the objective
achievement
QUESTION 2
a) The internal perspective measures implemented in an organizational level cannot be
implemented in an individual store mainly because of:
The individual stores may not afford to employ as many employees as an organizational store.
And therefore will lack the effective and efficient customer experience
An individual store may not afford to employ the number of managers needed to implement the
measures or strategies which may lead to poor judgment and decision making processes
In most private or individual businesses, the employees should not be seen forming any
relationship which reduces the chances of the customer engaging in a close relationship with the
employees
In most individual businesses, the business operations are run from debts, or rather its funds are
mostly received from loans and debts. Therefore, the opportunity to offer some special treatment
to the customers becomes an additional expense hence it is not done.
KPIs Necessary in Individual Businesses
a) Operational KPIs
These relate to business operational efficiency. In most businesses, the daily operations include
activities like product purchases, customer care and treatment, product sales to name a few. The
operational KPIs are used to measure how long a business takes to complete a certain operation
and succeed (Velimirović et al, 2011). Therefore, in the case of individually owned businesses,
this KPI is needed to measure the actual performance of a business operations on a daily basis.
These daily measurements can help a business to predict its future or final performance.
b) Growth KPIs

These relate to overall business growth, whether in terms of increase in customers, increase
ofproduct sales volumes or increase in number or employees and business expansion (Carlucci et
al, 2010). Apparently, by attracting more employees, a business will certainly attain more
revenue and increase its sales volumes. Therefore, according to Eckerson, 2009, individually
owned businesses should ensure the implementation of this KPI measure.
c) KPIs link to LFR’s Strategy
b) KPIs Comments Link to LFR’s Strategy
Operational They indicate the levels at
which a business can
complete and operation
successfully, basically, how
effective and efficient their
operations are towards
achieving he business
objective
LFR business faces
challenges when it comes to
purchasing is products from
manufacturer. The business
should also focus on
implementing the operational
KPI’s in its business
Growth Are used to measure a
business growth and
development rates. When a
business is able to attract
many customers, then its
revenue will increase which
means growth.
The business is focusing on
improving its growth and
development rates by
ensuring that its customers
are treated extremely well
which is a special way of
trying to attract new
customers and retain the
current ones

REFERENCES
Carlucci, D., & Schiuma, G. (2010). Determining key performance indicators: An analytical
network approach.
De Geuser, F., Mooraj, S., & Oyon, D. (2009). Does the balanced scorecard add value?
Empirical evidence on its effect on performance. European Accounting Review, 18(1),
93-122.
Eckerson, W. W. (2009). Performance management strategies. Business Intelligence
Journal, 14(1), 24-27.
Velimirović, D., Velimirović, M., & Stanković, R. (2011). Role and importance of key
performance indicators measurement. Serbian Journal of Management, 6(1), 63-72.