R S Kaplan and D P Norton, Having Trouble with your strategy? Then map it.

Strategy map is a visual representation used to document the primary strategic goals being pursued by an organization or a management team. A vital prerequisite to building a coherent and realistic strategy map is the real understanding of the hierarchical interdependencies between the perspectives used. Each perspective contains one or more objectives that in turn are associated with one or more performance measures and target values. It follows that the arrangement of objectives on the strategy map needs to be devised keeping in mind the dependencies implied by the choice of perspective headings. The best way to build a strategy map is from top down, starting with the destinationand then charting the routes that will lead there. Corporate executives will review the company mission. With that information, managers can develop a strategic vision of what the company wants to become. Financial perspective a. Revenue growth 1. Build new markets/new products/new customers 2. Increase value to the existing customers by expanding sales eg cross-selling products, offering bundled products. Productivity 1. Improve companys cost structure by reducing companys direct and indirect expenses 2. Use assets more efficiently by reducing the working and fixed capital needed to support a business

b.

Productivity strategy yields results sooner than the growth strategy. However, you have to strike a balance so that your cost and asset reductions are ensured as well as growth opportunities are not restricted. Customer perspective a. Value proposition: Once a company realizes its value proposition, it will know which customers to target. Single mot important step in developing a strategy. It can be chosen from amongst the following 1. Operational excellence. Eg Dell, McDonalds : You need to excel at competitive pricing, product quality and selection, speedy order procurement and on-time delivery. 2. Customer intimacy eg Home Depot. The organization should stress on quality of customer relationship including exceptional service and completeness of solution it offers. 3. Product leadership eg Intel, Sony. Organization must concentrate on functionality, features and overall performance of its product and services.

Internal process perspective It is required in order to determine how to achieve the goals defined under financial and customer perspectives. a. b. c. d. Build the franchisee by innovating with new product and services and entering new markets and customer segments. Increase customer value with the existing customers. Achieve operational excellence by improving supply chain management, cost, quality, cycle time of internal processes, asset utilization and capacity management. Become a good corporate citizen by establishing good relations with external stakeholders.

Learning and growth perspective Define objectives that enable a company to align its human resources and information technology with strategy. Advantages of Strategy maps 1. 2. 3. It takes the organization from present state to a future uncertain but desirable position. The map describes the pathway to achieve that position by specifying cause and effect relationships. Identifies when scorecards are not truly strategic Enables the organization to communicate the strategy in comprehensible terms down from top to bottom.

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R S Kaplan and D P Norton, Having Trouble with your strategy? Then map it.

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R S Kaplan and D P Norton, Having Trouble with your strategy? Then map it.

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R S Kaplan and D P Norton, Having Trouble with your strategy? Then map it.

7-S's include: 1. 2. 3. 4. 5. 6. 7. strategy (the coherent set of actions selected as a course of action); structure (the division of tasks as shown on the organization chart); systems (the processes and flows that show how an organization gets things done); style (how management behaves); staff (the people in the organization); shared-values (values shared by all in the organization); and skills (capabilities possessed by the organization).

The underlying concept of the model is that all seven of these variables must " fit" with one another in order for strategy to be successfully implemented. However, shared values are the central core of the framework because they are the heart-and soul themes around which an organization rallies

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