Business Model and Strategic Plan Part 3: Balanced Scorecard

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BUSINESS MODEL AND STRATEGIC PLAN PART 3: BALANCED SCORECARD

Business Model and Strategic Plan Part 3: Balanced Scorecard

Brandy Gorewicz

BUS/475

August 17, 2015

Sarita Wesley

Business Model and Strategic Plan Part 3: Balanced Scorecard

Coppertone is in the process of implementing a new division in sunblock that will be responsible for designing, manufacturing, and supplying the Coppertone Sunblock Body Misting Booths to popular outdoor attractions. As a leader in the sunblock industry, Coppertone has identified many strengths and opportunities available to the organization. However, weaknesses and threats were also apparent, especially in terms of the confidentiality of new technology advancements used in the booth designs and the ability to gain interest in the booths and encourage consumers to spend money protecting themselves and their family from the risk of developing skin cancer. Based on the SWOTT analysis, Coppertone can develop strategic objectives that the balanced scorecard can assign metrics and measures that can help the company move towards its mission, vision, and strategic objectives.

Balanced Scorecard

The balanced scorecard is a table displaying financial, customer, operations or process, and learning and growth areas for measurement of goals that are linked to the company’s vision and strategic objectives (Pearce & Roberts, 2013). The balanced scorecard consists of the four areas of measures, each with a strategic objective, a method of measuring the strategic objective, and the metric used in measuring. In addition, each measurement has a set target for the first three years that the new Coppertone division is in operations. Through the balanced scorecard, the company can monitor its ability to meet strategic goals and make the necessary changes to maintain its vision and goals.

Areas for Measures / Strategic Objective / Measure / Metric / Target Year 1 / Target Year 2 / Target Year 3
Financial / Increase Profitability / Manage Operating Costs / Operating Costs per Customer / -2% / -5% / -2%
Return on Capital Investment / ROIC / +5% / +5% / +5%
Inventory Turnover / Rate of Produce being Dispersed from each Booth / +5% / +10% / +10%
Customer / Customer Retention / Customer Growth / % of Customer Growth / +15% / +12% / +10%
Customer Satisfaction / Customer Satisfaction Feedback / Customer Surveys / >85% / >90% / >95%
Customer Growth / Increase Number of Customers Served / Market Share / +15% / +12% / +10%
Operation or Process / Improve productivity / Inventory / Product Margin / +5% / +5% / +10%
Reduce Bottlenecking / Percentage of bottlenecking in average run cycle of processes / -25% / -50% / -75%
Duplicate Activities across Functions / % of activities completed that are duplicated in another function / -25% / -50% / -75%
Learning and Growth / Employee Satisfaction / Employee’s satisfaction with job duties / Employee Surveys / >90% / >95% / >98%
Employee Turnover / Employee Turnover Rate / >10% / >7% / >3%
Innovations in Technology / New advancements in booths to provide even spray for all body types / Accuracy of booth advancements / >85% / >90% / >95%

Potential Risks

Coppertone is placing a large portion of funds into the success of the new division. The failure of the new division risks a large financial loss for Coppertone. Coppertone is also entering the market with a product like no other. Competition will attempt to benchmark the innovative technology that makes the misting booths possible. Coppertone must also be prepared for the possibility of lawsuits as the risk potential is unknown and consumers may file suit. In addition, Coppertone is at risk of damage or vandalism to expensive booths that are left unattended at theme parks and water parks.

Mitigation Plan and Stakeholder Analysis

A mitigation plan is necessary for developing a plan to address potential risks when those risks do occur. The risk mitigation plan allows a company to be prepared for threats by establishing actions that can be implemented immediately. In addition, the mitigation plan helps to establish procedures that will reduce the risk of risks while still taking advantage of opportunities. Risks that are identified are analyzed to determine the risk impact. Risks with a critical impact are further analyzed and ranked. All risks are tracked and mitigation is planned for implementation when the risk occurs. Included in the risk analysis is a stakeholder analysis that establishes an impact for stakeholders and how the mitigation plans will impact the stakeholders. Coppertone has a large risk for financial loss if the new division does not succeed for reasons ranging from lawsuits or a lack of attention from consumers. Coppertone must prepare for the added expense from the new division while also ensuring that other divisions of the company are still focused on to ensure the flow of revenue maintains steadiness and the division expenses or losses will not have a significant impact on the company. The risk of benchmarking from the competition is a large risk that must be mitigated. To begin, Coppertone must enforce all employees that have access to booth technology to sign a confidentiality report to ensure the new technology remains within the Coppertone Company. The shareholders will face the greatest loss from the downfall of the new division and the introduction of competition within the market prior to Coppertone gaining customer loyalty.

Ethical Implications

Coppertone must take responsibility in ensuring that the new division acts ethically. The most important ethical concern for the company is the risk of customers still being burned by the sun’s harmful rays after using the misting booth. Coppertone must ensure that the booth emits the appropriate amount of sunblock for each individual while also ensuring that individuals are notified of how long the sunblock provides protection. With previous lawsuits being filed against Merck & Co. for Coppertone false advertising, Coppertone needs to ensure that appropriate measures are taken to not have the same lawsuit occur (Rubin, 2012). In addition, Coppertone must take social responsibility for the safety of the environment and ensure that all misting overspray is not polluting the air or providing any other negative implications on the environment or consumer health.

Communication Plan

The University of Kansas (2015) describes a communication plan as an organized form of actions to fulfill a goal. For Coppertone, the communication plan is necessary for determining how information is produced, stored, accessed, distributed, and updated (University of Kansas, 2015). During the implementation of the strategic plan, communication will be necessary to remain on track and ensure that the new division clearly establishes the mission, vision, and values of Coppertone. Confidential information pertaining to customer’s methods of payment with the misting booth and information pertaining to the innovative technology used within the misting booths will be kept on a secure file as an encrypted file. Distribution of confidential information will be required to take place in face-to-face communications and secure company e-mails. Ethical expectations and all company information will be shared throughout the company through written communication. Information will be updated annually or as needed.

Conclusion

Coppertone’s new misting booth division is responsible for designing, manufacturing, and selling the misting booths to attractions such as theme parks and water parks. The new division has previously performed a SWOTT analysis that has identified the strengths, weaknesses, opportunities, threats, and trends that have led the company to develop strategic goals. Each of these strategic goals have been documented in a balanced scorecard that lists the measures and metrics along with target goals for the first three years. Coppertone has also analyzed risks and developed a risk mitigation plan that takes into consideration the impact that risks have on the stakeholders and how these risks can be mitigated to lower the risk of negative impacts. Ethical consideration has been given to the impact that the misting booths may have on human health and the environment. A brief communication plan has been outlined to better assess how information will be shared throughout the strategic plan and to ensure that the mission, vision, and values of Coppertone are apparent within the new division.

References

Pearce, J. A., & Robinson, R. B. (2013). Strategic Management. Planning for Domestic and Global Competition (13th ed.). Retrieved from The University of Phoenix eBook Collection database.

Rubin, B. F. (2012). Merck Settles Coppertone Sunscreen Lawsuit. Retrieved from http://www.wsj.com/articles/SB10000872396390444358804578018711501963132

University of Kansas. (2015). Developing a Plan for Communication. Retrieved from http://ctb.ku.edu/en/table-of-contents/participation/promoting-interest/communication-plan/main