Balance Score Card
A retail business may comprise of various business models which serves the end consumer. Retail businesses are easier to understand and less complicated compared to many other forms of businesses. For this reason, retailer businesses are favoured business models of young entrepreneurs trying their hand at business for the first times.
Some of the small retail businesses which started off from humble beginnings in Singapore may include
Food & Personal care product retailers: Value$, Beauty language
Food & Beverage service: Aston’s, Breaktalk
Fashion retailer: Charles and Keith, bYSI
Your group (maximum three persons) is required profile and analysis a selected RETAIL BUSINESS found in Singapore. Choose business models which interest you. Review the business with as much depth as you can. On the basis of your observation and analysis, you are required to write a report covering the following tasks:
Task 1: Investigation & Performance Evaluation
- Produce a profile of a selected small business identifying its strength and weaknesses (Pass 1.1, M1)
H&M SWOT ANALYSIS
[pic 1]
- Strength
- Lower price:
- Carry out an analysis of the business using comparative measures of performance (Pass 1.2, M2)
Use the Balance Score Card (BSC) analysis to see the business internal of the organization deeper
BSC is a management system (not only a measurement system) helps organizations define the vision and strategy and translating them into action. It provides feedback about both internal business processes and outcomes in order to continuously improve the result and effectiveness in terms of strategy.
BSC maintain the traditional measurement methods financially. But the measure of financial previously only tells us about the events that happened before, it can fully reflect for companies in the industrial age that the ability to invest long term relationship with customers is not an important factor of success. However, the financial measurements are insufficient to guide and assess companies in the information age to create future value through investment in customer, suppliers, employee’s activities, processes, technology and innovation.
BSC suggested that we should consider an organization from four aspects, and build a measurement system, collect data and analyze them in the relationship between these aspects together:
- Financial
- Customer
- Internal business
- Learning growth
Base on the Balance Score Card (BSC) model, the organization can now evaluate the parts of the business can create value for customers current and future requirements and improve internal and investment in people, systems and processes to improve business performance in the future.
BSC showed that the activity creates value generated primarily by people in organization skills and be encouraged. When maintain it, through the financial outlook, interest on short-term effect, Balance Score Card will clearly show the values for the orientation of the financial performance and competitiveness in the long term.
BSC should apply cross the company, from the top leadership to the staff. BSC best serve the strategy and implementation.
The innovative companies often use BSC as a management system for the strategic management of their strategy in the long term. They have focus on the process:
+ Clarifying and communicating vision and strategy
+ Communicate, linking strategic objectives and evaluation criteria
+ Planning, goal setting, linking the strategic measure
+ Promote feedback and feedback and strategic learning
- Financial: financial measurements are very important elements of the BSC, especially in the world that anyone interested in current earnings. Measurements in the aspect for us have been implemented strategies to achieve the final result or not. We can focus all effects and our ability to improve customer satisfaction, quality, and delivery on time or batch the problem but if not only the positive effects to the financial indicators of the organization, our efforts were also reduced value. Usually we are interested in the traditional indicators such as profit, increase sales, and other economic valises.
+ Profitability of H&M
The average price of H&M product
The lowest price items: $7.90
The highest price items: $249
The average price = = $128.45[pic 2][pic 3]
The average cost of H&M product
Cost of the lowest price items: $3.90
Cost of the highest price items: $120
The average cost = = $61.95[pic 4][pic 5]
The profit H&M can make [pic 6]
The profitability = = 51.77%[pic 7][pic 8]
The numbers show that H&M make 51.77% profit from very items they have sold to the customer. The numbers guarantee that they have enough money to continue run the business and pay the salary for their staff.