Strategic Plan, Part III: Balanced Scorecard-High End Consignment Clothing Store - Essay Example

Financial Perspective The financial outcomes form the most important criterion for the business. Unless our high end apparel store is able to show sales and profit growth, there is no relevance of any action oriented measures. Therefore we lay greater emphasis on the financial perspective. Based on our earlier exercise of SWOTT analysis, we outline the following three strategic objectives from the financial angle: 1) Increasing the market share of the company, 2) Profit growth and 3) Ranking in the strategic business group of the firm.

For each of these, the targets have been outlined as follows: a) Increasing the market share by 3% year on year, b) Growth in profit to be at the rate of 1.5% annually and c) to be in the top 5 of the strategic business group. Potential risks could stem from larger macro economic trends (Kaplan & Norton, 1996b). If there are national level lower employment percentages, that could affect the business. Similarly, when industry profitability is affected, potential customers may defer their purchase.

This would affect the sales of the store. On the ethical front, it is important to focus on abiding by the rules. Accounting needs to be transparent and there should be no signals of ‘cooking the books’ which is often practised by ambitious young firms. Customer Value Perspective The customer value perspective gains significance mainly because we need to establish a loyal customer base and then milk this base for sustained, predictable sales and profits. Hence, we need to be very clear in the store level strategic objectives.

Additionally, the customers need to get the impression that the apparel store is free and fair with all its policies. We define our strategic business objectives in terms of the following three: 1) customer loyalty, 2) Customer satisfaction and 3) Customer Lifetime Value. Here, the corresponding targets for respective strategic objectives can be outlined thus: a) A minimum of 5% customers who purchase at least twice during a quarter, b) Achieving an average rating of 3.6 out of 5 on the customer review and feedback form, which are recorded for willing customers and c) Achieving a Customer Lifetime Value of $20000 for each of the loyal customers visiting the store.

From our earlier exercise, we have observed that the issue of customer loyalty needs to be addressed since our consignment store is new and hence it may take time to find acceptance by customers. For high value discretionary purchases such as those of our store, the customers are very discerning in their choices. This could pose a risk to our estimates. Again, getting customers to be loyal takes much longer time and effort. This has to be factored into the estimates. On the ethical front, the loyalty cards need to be designed in a transparent manner with some degree of flexibility.

Often it is noticed that customers using the loyalty card are denied store discounts or they are unable to club special discount offers. The loyalty cards need to be designed with such factors in mind. Process Perspective We have addressed the financial and the customer perspective. In this section, we identify the actions that are done within the store that lead to achievement of the customer perspective and therefore the financial objectives. We list down a few critical parameters that could make a tangible difference to the apparel store performance.

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