Question 1

Opportunities 1. 2. The changing perception of the role of sausage with people. Growth of the Memphis area. This meant that there would be an increase in the number of customers, increase in the demand for sausages and an increase in the sales of sausages. 3. 4. 5. Expanding the companys product line. For example, producing lean sausage to meet the new standards in the government policy. Expanding to new geographic areas. This would assist in the growth of the company and make it big within the sausage industry. Marketing unique, high quality products at premium prices.

Threats 1. 2. 3. 4. Entry of new potent competitors. Low barriers to entry. Large retailers control shelf space, food service operations controls the menus and the ingredients to be used in preparations of meals. Competitive copying and inter brand pricing comparison could limit price premium. Government regulations. These stated that nutrition facts had to be included in every food product. This could affect either the taste of the product or customer perceived health value of the product. 5. Centralised buying and professional buyers by large retailers make distribution difficult for smaller sausage manufacturers.

Question 2
Ten Point Plan: 1. Needs to get a financial operation in his company to work out things like the costs of material (spices, meat, and packaging), costs of operation (electricity used in

production and labour). He should formalize cost structure. This will enable the company to figure out how much a sausage batch will need to be sold for to break even- basically to realise your costs. 2. From here they must choose a competitive strategy. Do they want to keep differentiating their products and make a high profit, do they want to perhaps charge as low a price on their good as possible which would give them a cost advantage over their rivals or lastly if they want to choose a best cost provider. This ensures that they are charging their goods at a price that is suitable for their objectives. This will establish a consistent pricing consistency. 3. Get a broker so that they can compete in the food-service industry to increase their position even better. This will increase their shelf space which is crucial for the industry. Get a distributor for his products which will enable him to pierce through the super market industry which he is not currently powerful in. 4. Benchmark against competitors. 5. He needs to evaluate the production of sausages he makes. He needs to focus on the products that make him the most money and eliminate those that hardly sell. Out of the 80 products he sells there are only 20 products which really are popular among customers and these bring the most income. Having too many products may be detrimental as he could be making sausages that people and organizations dont want or need which is increasing his costs and decreasing his salaries. 6. He needs to decrease his sausage making process. This could be alleviated through making fewer products. He could also buy a new machine to increase the speed of the process. This will also reduce delivery delays. 7. He needs to work on promoting his product, improve marketing and growing relationships with his customer to improve the long term customers which should reduce erratic sales. 8. He needs to work on increasing his customer base- this will make him sell more products which will help him reap the benefits of economies of scale which are currently not being realised. 9. He needs to hire more staff to help him out. 10. He needs to increase his payment options so that it is not only cash. He could implement a credit card facility. He could also have an online service to broaden his geographic limitations this way he could expand his business further.

Question 3
A balanced scorecard is a tool that businesses use to track the performance of their employees. According to Kaplan and Norton (1996: 8), the objectives and measures of the scorecard are derived from an organizations vision and strategy. Organizational performance is thus viewed from four perspectives; Financial Performance, Customer Perspective, Internal Business Process and Learning and Growth (Kaplan and Norton, 1996: 8). The financial element of the scorecard refers to the tangible outcomes of the strategy using familiar metrics such as return on investment, economic value added, operating profits, revenue per customer, and cost per unit produced (Kaplan and Norton, 2008: 98). The lagging indicators or outcomes are an indication of whether the strategy is working to give value to customers and shareholders. The Customer Perspective deals with the measures developed to measure an organizations success in its targeted market. Rossouw, Le Roux and Groenewald (2003: 202), state that this perspective includes measures of successful outcomes resulting from a well-formulated and implemented strategy. The financial and customer perspectives together describe what the organization anticipates to attain. Kaplan and Norton (2008: 100), suggest that the Internal Process Perspective identifies the critical few business processes that will satisfy the customer and financial objectives. This perspective deals with the measure that concentrates on the internal processes of an organization that will have the best outcome on customer satisfaction and will achieve the organizations financial objectives. The Learning and Growth perspective identifies the jobs (human capital), systems (information capital) and climate (organization capital) that support the value-creating processes (Kaplan and Norton, 2008: 100). This perspective finds those skills and abilities of an organization that are most critical for the current and future success. Together the internal processes and the learning and growth perspective describe how the organisation will carry out its strategy (Kaplan and Norton, 2008: 100).

Graphical Illustration:

Benefits of the Balanced Score Card: 1. Puts an organizations mission at the centre of its performance measurement (Rossouw et al., 2003: 201). It translates the mission into tangible measures and actions. 2. It helps define those things that should be done to achieve the mission. It also serves as a way of mobilising those involved to channel their energies, abilities and knowledge toward achieving the mission (Kaplan and Norton, 1996: 2). 3. Fosters the development of measures that track performance regarding whats most important to achieving the overall mission. These measures establish accountability for the performance of whats most important (Kaplan and Norton, 1996: 2).

4. Incorporation of innovative processes which requires an organization to create new products that will meet the ever changing needs of current and future customers (Rossouw et al., 2003: 202). 5. Helps an organization to communicate its mission and the areas of importance in support of that mission (Kaplan and Norton, 2001: 3). Drawbacks of the Balanced Score Card: 1. Lack of a well-defined strategy. 2. Use of only lagging measures. 3. Use of generic metrics. 4. Creates barrier to future progress by embedding the new strategy and new culture into a management system (Kaplan and Norton, 2001: 17).

List of References
Kaplan, R., and Norton, D., 1996. Translating Strategy into Action (2e): The Balanced Scorecard. Harvard Business School: Press Boston, Massachusetts. Kaplan, R., and Norton, D., 2001. The Strategy-Focused Organization (1e): How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School: Press Boston, Massachusetts. Kaplan, R., and Norton, D., 2008. The Execution Premium (1e): Linking Strategy to Operations for Competitive Advantage. Harvard Business School: Press Boston, Massachusetts. Rossouw, D., Le Roux, S., and Groenewald, D., 2003. Strategic Management (2e): An Applied South African Perspective. New Africa Book (Pty) Ltd: Claremont.

MANAGEMENT 3: SRATEGIC MANAGEMENT GROUP TASK 2 MONDAY 11 MARCH 2013