Yummy Foods
Strategic Objectives: Yummy Foods
Summary
Planning is something at the very heart of the management process. The components of planning include careful forecasts for the future, analysis of possible alternate methods to meet those, and also creation of relevant modifications that ensure goal achievement. However, all of these steps are not at the same hierarchical level. In fact, as one moves up the ladder in an organization, the decisions increasingly transpire from an operational nature to a strategic one (Evans, 2012). Table-1 is a balanced scorecard, which lists down the appropriate strategic objectives for Yummy Foods, a food provider in Kent, Washington, prepared in the light of the mission statement, SWOT analysis, and other major factors of the business.
Table 1: Balanced Score Card
|
Shareholder Value or Financial Perspective |
Objectives |
Measures/ Metrics |
Targets |
Initiatives |
|
Increase market share |
By 5 percent |
Per year |
Persuasive promotion techniques |
|
|
Maintain the current ratio |
at 0.8:1 |
For the next 2 years |
Relationship building with suppliers and making short term investments |
|
|
Maintain the debt to equity ratio |
To less than 20 % |
For the next two years |
Borrow less and reinvest more |
|
|
Customer Value Perspective |
Objectives |
Measures/ Metrics |
Targets |
Initiatives |
|
Maintain customer complaints |
Below 5 % |
Monthly |
Take orders carefully and ask for feedback |
|
|
Conduct quality audits |
Four times |
A month |
Make a quality check department |
|
|
Maintain recommendation ratio |
Above 20 % |
Monthly |
Conduct surveys with customers |
|
|
Process or Internal Operations Perspective |
Objectives |
Measures/ Metrics |
Targets |
Initiatives |
|
Reduce wastage |
By 10 % |
Semi-annually |
Investments in new technologies |
|
|
Reduce order serve timings |
By 10 % |
Monthly |
Conduct training programs for chefs and waiters |
|
|
Reduce supervision costs |
By 10% |
Semi-annually |
Practice delegation techniques |
|
|
Learning and Growth (Employee) Perspective |
Objectives |
Measures/ Metrics |
Targets |
Initiatives |
|
|
Add products to the menu list |
4 new or revised products |
Semi-annually |
Research on changing customer needs and market segments |
|
Develop skilled managers from existing staff |
1 manager |
Semi-annually |
Issue certified certificates to employees once they consistently meet targets |
|
|
Maintain employee turnover |
To less than 20 % |
Annually |
Practice decentralization and motivation techniques |
The Financial Perspective
A common perspective is that financial ratios and figures are more important to financial institutions than other forms of companies, for example, a food business. However, as trends evolve, all businesses have to plan strategically in order to tackle increasing competition (Paris, 2003). The first strategic objective is to increase market share by five percent annually. By the naked eye, this seems like a moderate figure. Modern companies usually eye relatively large market share targets (Paris, 2003). However, because Yummy foods intends to serve international, as well as local dishes, they need to move ahead with caution. Major competitors of the business, such as McDonalds and Burger King, mostly provide standard products that they specialize in (Entrepreneur Media, 2009). Considering this, it might be better for Yummy Foods to make small targets that are more achievable and practicable. Furthermore, as the vision for the business states that it intends to understand and cater to specific customer needs, it makes the job even trickier. A five percent market share increase would mean that the business would not look forward to rushing into the things and messing them up eventually.
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Another company goal is to maintain liquidity and working capital for the business, as expressed by the current ratio of current assets and current liabilities; this is a measure of the ability of business to pay off its short-term obligations. As Yummy Foods operates in a highly competitive market, it cannot afford to face any threats in the face of liquidity or insolvency that would hinder growth prospects. An internal review of the business explains that it puts a great emphasis on expanding to the international market (Entrepreneur Media, 2009). That would allow no margin for cash flow problems. The 0.8:1 ratio would mean that the management would not be facing any shut down threats in times of crisis. That can be achieved by developing reliable relationships with creditors and debtors to regulate the cash operating cycle of the business. The last two business objectives are inter-related. In the pursuit of expansion, companies often borrow much more than they can service later on (Ittner et al., 2003). As one goal of Yummy Foods is to provide affordable products, it cannot afford to have overwhelming financial costs. Maintaining the debt below 20 % for the next two years would mean that the company can reinvest more or give cuts to shareholders rather than servicing the debt.
The Customer Perspective
In addition to achieving the business objectives, food companies have to provide quality products to the customers. All the customer value objectives in the scorecard facilitate each other. Yummy Foods takes great pride in its healthy products (Entrepreneur Media, 2009). Conducting quality audits and checks would ensure that the products served by the business remain hygienic and fault free. This can be done by establishing quality departments that inform suppliers about the acceptance criteria for the raw materials. The quality management would lead to a reduction in customer complaints. As an aspiring business in the food market Yummy Foods needs a USP, something that can make it stand out. Having a quality department would surely help in getting there. Moreover, another goal can be to maintain the recommendation ratio up to 20 % on a monthly basis. It has been noticed that customers like to remain aware of new and attractive outlets of food businesses. Recommendations made by friends and family would surely go a long way in making Yummy Foods the next big thing.
The Operations Perspective
Innovation is important for any business in terms of the new technologies. Strategic operations objectives for Yummy Foods can be to reduce wastage that occurs in the supply chain through investing in the technologies, such as websites, automatic order systems, and just in time supply techniques. Furthermore, the business can look into reducing the time taken to serve orders. That would create customer utility and will attract more visitors. Yummy Foods is located in a suburban area that attracts people, who are busy shopping and doing daily chores (Entrepreneurship Media, 2009). Yummy Foods can boast of about the minimal time it takes to serve orders to such people.
In addition to that the business can look forward to reducing supervision costs by 10 % thought the means of practicing delegation and decentralization techniques. This semi-annual practice would mean that the business has more to spend on innovation and expansion, and also does not rush into delegating responsibility, if it had been on a monthly basis.
Learning Perspective
A threat indicated by the SWOT analysis done for the business indicates that customers are showing increasing preferences for healthy foods, rather than for the fast foods. To tackle this approach of customers, Yummy Foods can start adding products to the menu. As a target, they can either add or revise four existing products every six months in order to accommodate to changing market trends. Doing it on a semi-annual basis would not give the impression that the business has changed its policy overnight. Rather, the new products would just look like value additions. Secondly, one of the economic factors influencing Yummy is unemployment (Entrepreneurship Media, 2009). What it can do is to start training managers out of its existing staff. That would reduce hiring and recruitment costs and the need for on the job training. Lastly, maintaining employee turnover of less than 20% percent would mean that employees would be loyal and more adaptable to the company. In bad economic times, this would give out a nice goodwill impression for the business.
The paper presented a discussion of some of the appropriate strategic objectives for Yummy Foods based on the four different perspectives of firm values, mission statement, and SWOT analysis. The paper did not provide an exhaustive list; rather, it indicated some of the choices that the business has in terms of improving and expanding its operations.
