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  • 1. The Balanced ScorecardTesco PLCThis essay presents an analysis of the way in which Tescoimplement the balanced scorecard. The strengths andhindrances associated with this approach have also beenoutlined with respect to this particular case study. The 4perspectives of the balanced scorecard are examined indetail, the conclusions of which are later divulged.By Manish Abraham
  • 2. The Balanced Scorecard Table of ContentsIntroduction – Balance Scorecard page 4Introduction – Tesco page 6Financial Perspective page 8Customer Perspective page 10Internal Business Processes Perspective page 12Learning & Growth Perspective page 14Conclusion page 16Bibliography page 17Appendix page 22 Page 2 of 23 Manish Abraham
  • 3. The Balanced Scorecard Financial Vision & InternalCustomers Business Strategy Processes Learning & Growth Page 3 of 23 Manish Abraham
  • 4. The Balanced Scorecard Introduction to the Balanced ScorecardThe Balanced Scorecard was first developed in the early 1990s by two researchers: Kaplanand Norton (2001). The researchers Marr and Adam (2004) found that the balanced scorecardwas designed to be used as a strategic performance measurement and managementframework. Kaplan and Norton (1996) describe the originality of the balanced scorecard as:“The balanced scorecard retains traditional financial measures. But financial measures tell thestory of past events, an adequate story for industrial age companies for which investments inlong-term capabilities and customer relationships were not critical for success. Thesefinancial measures are inadequate, however, for guiding and evaluating the journey thatinformation age companies must make to create future value through investment incustomers, suppliers, employees, processes, technology, and innovation" (p.7).In recent years, balanced scorecards have been proposed and widely used to measureorganisational performance from four different perspectives that help companies focus ontheir critical areas, and to translate their strategy into action (Seraphim, 2006).The balanced scorecard proposes that the organization is viewed from four perspectives, andmetrics, that it should collect information and examine it in relation to each of theseperspectives; Kaplan and Norton (2001) urged people to view the organisation from fourperspectives (the financial perspective, the customer perspective, the internal businessprocess perspective, and the learning and growth perspective). “These perspectives areinterlinked and layered: so that financial results are determined by customer satisfaction,which are in turn determined by internal processes and, underneath these three layers, is thefoundation of the learning and growth perspective”(Marr and Adams 2004). The causalrelationship between these perspectives can then be visualised in strategy maps (Marr andAdams 2004) p.18. Page 4 of 23 Manish Abraham
  • 5. The Balanced ScorecardHowever, according to Marr and Adams (2004) a major weakness in the balanced scorecardis the learning and growth perspective. The researchers Marr and Adams (2004) believe thatthis latest attempt to evolve the balanced scorecard by Kaplan and Norton might have had anadverse effect. Marr and Adams outline how Kaplan and Norton failed to acknowledge thelarge body of writing on intangible assets and, therefore, produced an inconsistent,incomplete, and potentially very confusing classification of intangible assets. However, in myopinion the balanced scorecard also has other weaknesses, which mean that the balancedscorecard will not always guarantee success. Many companies fail to put the requiredmeasurements in place to make the balanced scorecard a success. Two reasons for this maybe: (a) Time The balanced scorecard takes time to implement and many companies may not have the time or the sufficient resources to properly invest in this performance measurement. (b) Fee It can be costly to implement the balanced scorecard. The organizational will have to ensure that all employees are sufficiently trained and if they are not they will have to send them on training courses which is costly. They may also have to improve their production processes i.e. having new, up to date technology and machines that are of high quality. Page 5 of 23 Manish Abraham
  • 6. The Balanced Scorecard The Balanced Scorecard Today: Tesco PLCTesco was founded in 1919 by Jack Cohen when he began selling surplus groceries from astall in the East End of London (Tesco 2009). In 1932, Tesco Stores Limited became aprivate limited company (Tesco 2009). Tesco floated on the stock exchange for the first timein 1947 with an initial share price of 25p (Tesco 2009). Tesco introduced the Clubcard in1995, which is a loyalty card for customers (Tesco 2009). This card has helped Tescoevaluate its customers.“Tesco is the UK’s leading food retailer in an extremely competitive market” (Vignali 2001).For this reason it decided to expand operations across Europe, which also included expandingto Ireland. According to Vignali (2001), Tesco entered the Irish food retail market bychoosing to purchase all Quinnsworth, Crazy Prices and Stewart’s stores in Ireland.Tesco plc currently employs over 470,000 people across 14 countries (Tesco 2009). In 2009,Tesco’s turnover exceeded £1 billion per week over the 12-month period (Microsoft, 2010).The current share price is 427.55p, which exceeds its leading competitors share price of332.40p (Tesco 2009). The company’s major shareholder is Legal & General Assurance(Pensions Management Limited) (Tesco 2009). Tesco floats on the London Stock Exchangeunder the symbol TSCO and it also floats on the Irish Stock Exchange as TESCO PLC.While most people call their strategic planning and management systems a balancedscorecard (Witcher and Chau, 2008), Tesco call it the Steering Wheel (Tesco 2009). Thisorganisational tool centers their business on the delivery of their core purpose (Tesco 2009).The only difference is that there are five perspectives instead of four; the fifth perspectivebeing community (Tesco 2009). The editors of Strategic Direction (2009) found that at Tesco“performance is reported quarterly to the board, and a summary report sent to the top 2,000managers to cascade to staff” (p.5). The salary of senior management is created by the KPIs, Page 6 of 23 Manish Abraham
  • 7. The Balanced Scorecardwith bonuses established on a descending scale according to the level of success on thesteering wheel (Editors of Strategic Direction 2009)However, according to ICMR (2005), Tesco’s ‘Steering Wheel’ was so successful infulfilling the company’s strategic objectives that the company forgot about HR policies andprocurement policies when the company began to grow rapidly. This resulted in Tesco payingunduly low wages and having a high absenteeism rate. The balanced scorecard does appearto have been a great success for Tesco as it is the largest British retailer. Page 7 of 23 Manish Abraham
  • 8. The Balanced Scorecard Financial Perspective“The Financial Perspective covers the financial objectives of an organisation and allowsmanagers to track the financial success of a company for example how wealth is created forshareholders” (Advanced Performance Institute 2010). However, despite the need to providea balanced approach to performance measurement, companies remain focused on traditionalfinancial measures (gross revenue, profit before tax, and cost reduction) and often forgetabout intangible assets (Chia, Goh and Hum 2009). According to Valiris, Chytas and Glykas,(2005) financial measures remain an important dimension within the balanced scorecard.The Financial perspective measures whether a companys strategy, implementation, andexecution are contributing to bottom-line improvement (Valiris et al. 2005). The financialperspective focuses on traditional return-based efficiency and effectiveness metrics(Punniyamoorthy and Murrali 2008).In order for Tesco to meet its target profits in 2009 it decided to charge elevated prices in itsIrish stores at the beginning of the year (Cullen 2009). Cullen (2009) also found that Tescothen lowered their prices from March on 11 Border stores in preparation for a price waragainst competitors. For Tesco to achieve its profit targets for 2009 it had to make up to 100employees redundant at its Irish headquarters in Dún Laoghaire (Cullen 2009). In 2008,Tesco had a profit margin of 9.3 per cent in Ireland, while its profits were €248 million and2009 profits were projected to rise to €255 million (Cullen 2009). Tesco have reduced theircosts in order to increase sales revenue. These figures may look great to the shareholders intimes of economic downturn but for Tesco to cut their prices they more than likely putpressure on their suppliers (especially Irish suppliers) to reduce their prices. This in effect canput some suppliers out of business. Tesco have also reduced their direct expenses by cuttingemployee hours and introducing self service scan tills into most of their stores. This may havebenefited Tesco’s bottom line but it has made its employees threaten strike action. Page 8 of 23 Manish Abraham
  • 9. The Balanced ScorecardTesco’s main competitor in the UK is Sainsbury’s. Tesco is appealing to shareholders as itachieving a return on capital employed of 15%, while its competitor (Sainsbury’s) isachieving a return on capital employed of 9% (Appendix1). The absolute difference betweenthese returns on capital employed is 6%, which means that Tesco is the more profitablecompany. The relative difference is 66%, which indicates that Tesco are 66% more profitablethan Sainsbury’s. Tesco paid out a final dividend of 8.39p (Tesco 2009) to its shareholders atthe end of 2009, while its competitor Sainsbury plc paid out a dividend of 9.6p (Sainsbury plc2009). Tesco has a policy of not paying their trade creditors for 54 days, which in turn putspressure on their suppliers. Tesco’s group sales have increased by 7,000 since 2008 (Tesco2009), while Sainsbury’s increased by 1,000 from 2008 (Sainsbury plc 2009). Tesco shouldbe given credit for their increased sales during tough economic times but to achieve thesesales they have had to cut prices, which means that they would have also undercut theirsuppliers. Tesco’s net profit percentage has an absolute difference of 3% when compared toSainsbury’s (Appendix3). The relative difference is 88%, which signifies that management inTesco are controlling their costs more efficiently than Sainsbury’s. This is evident in thatTesco have cut wages, which would increase Tesco’s net profit. Page 9 of 23 Manish Abraham
  • 10. The Balanced Scorecard Customer Perspective“In the customer perspective of the Balanced Scorecard, managers identify the customer andmarket segments in which the business unit will compete and the measures of the businessunit’s performance in these targeted segments” (Kaplan and Nortan 1996, p26). According toKaplan and Norton (1996) the customer perspective, if implemented correctly, should havesuccessful outcomes such as customer satisfaction, customer retention, customer profitability,new customer acquisition and market share in targeted segments. It also enables companies tomeasure and identify the value propositions (unique mix of product, price, service,relationship etc., offered to customers) that they will deliver to targeted customers and marketsegments (Kaplan and Norton 1996). For this to work, businesses must identify the marketsegments in their existing and possible customer populations and then they must identifywhich segment they are going to compete in (Kaplan and Norton 1996). However, for manycompanies this may be difficult to implement but for Tesco it is easier as they have a valueclubcard, which enables them to identify what their customers want.According to Liptrot (2005) Tesco attracts 15 million customers per week. When Tescoimplemented the ‘Steering Wheel’ they appealed to all segments of the market instead offocusing on certain segments (Liptrot 2005). Tesco wanted to gain customer satisfaction andin order to do this; they decided to cater for all incomes. Tesco offer three distinct ranges ofown-brand products to satisfy all their customers (Tesco 2009).It is far cheaper for Tesco to keep its customers than it is for it to gain new ones. Tescolaunched a Loyalty Clubcard in 1995 (Tesco 2009). The information gained by Tesco fromits customers using the Clubcard allows them to understand their customers and offer them avariety of coupons to suit their needs (Tesco 2009). It was also found by Turner and Wilson(2006) that there was a positive moderate relationship between the Clubcard returns andcustomer loyalty. In May, Tesco offered a Double Up scheme, giving card holders a chance Page 10 of 23 Manish Abraham
  • 11. The Balanced Scorecardto turn vouchers into twice their face value, this incentive drew 500,000 extra shoppers in(Mirror 2009).Tesco also retain customers by marketing online grocery shopping as a convenience to itscustomers (Delaney-Klinger et al. 2003). This allows shoppers to shop from the comfort oftheir home and have their purchases delivered to their door. According to Rowley (2003)Tesco online (tesco.com) has developed a sophisticated and extended shopping experiencewhich sets new standards for retailing. If a customer has signed up for online shopping thenthey will receive offers on a regular basis. For example, they may receive free delivery codesto encourage people to shop with them.In the three months to November 2009, Tesco’s market share rose to 30.7% from 30.6% inthe same period in 2008 (Finch 2009). Tesco’s sales increased in 2009 with a growth rate of4.7% compared with a market growth of 4.4% (Finch 2009), which indicates that theyacquired a great deal of new customers in 2009. Tesco took on board the fact that familieswere experiencing financial difficulties due to the current economic climate and targetedthose areas which dually increased their market share. Page 11 of 23 Manish Abraham
  • 12. The Balanced Scorecard Internal Business Process PerspectiveIn the internal business process perspective, managers identify the important internalprocesses that the business must succeed in, in order to implement its strategy (Drury 2004).Metrics based on this perspective let managers measure how successful their organisation isdoing and whether its goods and services conform to customer needs (Papenhausen 2006).The internal business process measures should focus on the internal processes, which theorganisation will need to achieve its customer and financial objectives (Drury 2004).According to Chavan (2009) a “well-oiled machinery” of internal processes is important inany business, and may not always correlate with external perceptions. Internal businessprocesses are identified by three principal processes which are: innovation processes,operation processes and post-service processes (Drury 2004).Innovation:The product development manager for Tesco is Seaneed O’ Neill (bbc news 2002). SeaneedO’Neil is constantly on the lookout for the latest trends regarding the food market so that itcan be developed into a new line in Tesco (bbc news 2002). The latest range that Tesco havedelved into is the healthy eating market with its finest range. The design and development ofthese new products can be timely for the organisation as they have to source suppliers andconduct market research (bbc news 2002). The company then has to measure the paybackperiod of the new product and the sales from the new product (Drury 2004).Operations Process:Traditionally, the operations process has been the major focus of an organisation’sperformance measurement system (Drury 2004). Tesco needs to manage its transport betteras it has 2,000 trucks (Tesco 2009). They identified issues with their drivers and fleets so they Page 12 of 23 Manish Abraham
  • 13. The Balanced Scorecarddecided to start up a ‘Managing Transport Better’ project to reduce the cost of transport andto have one standard way across their depots (Tesco 2009). According to Tesco (2009) itsaved millions of pounds on this project as it improved the efficiency of its systems bytrailing the improvements over three months. Tesco then rolled out the new routines acrossthe depots.Supplier Processes:“However, the fact that a handful of supermarkets control access to consumers means thatthey are increasingly in a position to exercise buyer power” (Fearne, Duffy and Hornibrook2005) p571. According to Irish Times journalist Cullen (2010), Tesco has been demandingmillions from Irish suppliers in return for the sustained stocking of their items on Irishshelves. Tesco are putting great pressure on their suppliers, which may in turn push Irishsuppliers out of the market (Cullen 2010). Cullen (2010) also found that if suppliers did notpay the sum demanded by Tesco then the space allocated to the supplier’s products in storewould be significantly reduced. According to Cullen (2010), suppliers have suggested thedemands by Tesco may have something to do with improving its figures as Tesco’s financialyear runs to the end of February.Tesco’s financial year runs to the end of February, which has made suppliers believe thedemands by Tesco are a move to improve its figures before the year end. It has been adifficult trading year for Tesco as the retail market is down by 7 percent and profits have tightdue to the price war (Cullen 2009) Page 13 of 23 Manish Abraham
  • 14. The Balanced Scorecard Learning & Growth PerspectiveThe learning and growth perspective includes employee training and employees learningfrom within the organization so that the company will continue to please customers in thefuture (Drury 2004). According to the Balanced Scorecard Institute (2010), learning andgrowth metrics can be put into place to guide mangers in centering training funds where theycan help the most in the organisation. Kettunen (2005) presented in his research paper that thelearning and growth perspective included three principles: “the capability for R&D”,“environmental scanning and customer knowledge” and “quality and assessment capabilities,and in-house training”.Tesco employs staff from a multitude of different backgrounds and all employees are giventhe opportunity to develop in tandem with the company. The majority of companies fail tomeasure the outcomes of learning and growth but Tesco are different as it regularly measuresthe performance of its staff. Employees are able to apply for training through yearlyappraisals to improve their knowledge and skills (Thetimes100 2010). However, it has beennoted that training is not one of Tesco’s primary focuses.According to Tesco (2009), training is tailor to its employees. They treat their employees likethey treat their customers as persons with their own specific requirements (Tesco 2009).Tesco (2009) have a off the job training and development program known as ‘Options’.Options is an accommodating program that is tailored to the employees needs, which can lastbetween 6 months to 2 years (Tesco 2009). This program aims to develop a combination ofbroad skills, leadership and operating skills through off the job experiences and a clearprocedure that is designed to provide clear feedback and schooling (Tesco 2009). Page 14 of 23 Manish Abraham
  • 15. The Balanced ScorecardTesco also offer their staff on the job training (Thetimes100). On the job training techniqueswould include shadowing, coaching, mentoring and job rotation (Thetimes100). The methodof shadowing is used for many reasons but it is mainly used for the training of cashier staffand aisle staff. The trainee employee is shadowed by a more experienced employee until theyare competent in their new role. On the job training is directly related to the employees workand is usually favoured over off the job training as it is cheaper for Tesco to implement(Thetimes100). The researchers Van Der Klink and Streumer (2002) found that from a studyof on the job training, the results of the study were only partially successful in realisingtraining goals. On the job training may not be a great success as more experienced employeesoften see it as a way to reduce their work load.Hayman and Lorman (2004) found that most graduates entered companies directly fromfurther education and had a solid academic background. They found that training made suregraduates were prepared with a working knowledge to complete their job role (Hayman andLorman 2004). Tesco offer graduate programmes where the employees training depends onits graduate programme (Tesco 2009). Tesco (2009) also provide training in specialised areasfor example in Finance they offer to pay for the employees CIMA qualification. Page 15 of 23 Manish Abraham
  • 16. The Balanced Scorecard Conclusion“Although there are some criticisms concerning the balanced scorecard approach, many ofthese seem to represent problems of practical application rather than fundamental flaws”(Atkinson 2006).The ‘Steering Wheel’ strategy has assisted Tesco in accomplishing big goals by breakingthem down into smaller, more achievable goals. While Tesco have achieved their targets for2009, the manner in which they have done so can be considered to be slightly furtive,including demanding money from suppliers for shelf space in their shops.Even though Tesco’s employee training programmes are held in high regard, training is nottheir primary concern. Instead Tesco adopt a more customer-oriented focus, with theintention of getting customers into their store in any conceivable way. The fact that Tescohave delved into new markets, e.g. healthy eating, in order to satisfy their customers’ needs,exemplifies the above statement. In general, the balanced scorecard has proven to be aneffective and successful tool, in the achievement of Tesco’s respective goals. Page 16 of 23 Manish Abraham
  • 17. The Balanced Scorecard BibliographyWebsites:API (2010) “Balanced Scorecard Perspectives”, available: http://www.ap-institute.com/Balanced%20Scorecard.html [accessed 17/02/2010]Balanced Scorecard Institute (2010) Balanced Scorecard Basics, Balanced ScorecardInstitute, available:http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx [accessed 01/03/2010]BBC NEWS (2002) “Lunch Lesson 12 – New product development”, BBC NEWs, available:http://news.bbc.co.uk/2/hi/programmes/working_lunch/education/2518475.stm [accessed20/02/2010]ICMR (2005) Tesco’s ‘Steering Wheel’ Strategy, available:http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/Tesco%27s%20%27Steering%20Wheel%27%20Strategy%20Business%20Strategy.htm [accessed 17/02/2010]Cullen, P. (2009) “Tesco’s high prices a strategy to meet profit targets”, The Irish Times, 12May, available:http://www.irishtimes.com/newspaper/ireland/2009/0512/1224246324534.html [accessed17/02/2010]Cullen, P. (2010) “Irish suppliers claim Tesco seeks up to €500,000 to stock goods”, TheIrish Times, 15 Feb, available:http://www.irishtimes.com/newspaper/frontpage/2010/0215/1224264468799.html [accessed02/03/2010] Page 17 of 23 Manish Abraham
  • 18. The Balanced ScorecardFallowfield, T. (2009), “Director’s Report”, J-Sainsbury, available: http://www.j-sainsbury.co.uk/ar09/governance/directorsreport.shtml [accessed 10/03/2010]Finch, J. (2009) “Tesco increases market share”, The Guardian, 10 Nov, available:http://www.guardian.co.uk/business/2009/nov/10/tesco-waitrose-win-market-share [accessed18/02/2010]Liptrot, H. (2005) “Tesco: Supermarket superpower”,available:http://news.bbc.co.uk/2/hi/business/4605115.stm [accessed 17/02/2010]Microsoft (2010) “Record turnover levels at Tesco”, available:http://www.microsoft.com/uk/business/news/retail/Record-turnover-levels-at-Tesco-19131476.mspx [accessed 16/02/2010]Mirror (2009) “Tesco to offer double Clubcard points”, The Mirror, 15th Aug, available:http://www.mirror.co.uk/news/city-news/2009/08/15/tesco-to-offer-double-clubcard-points-115875-21597557/ [accessed 18/02/2010]Sainsbury plc (2009), “Financials”, available: http://www.j-sainsbury.co.uk/index.asp?pageid=206 [accessed 10/03/2010]Tesco (2009) “Our history”, available: http://www.tescoplc.com/plc/about_us/tesco_story/#[accessed 16/02/2010]Tesco (2009) “Options”, available:http://www.tesco-careers.com/home/working/training-and-development/options [accessed01/03/2010]Tesco (2009) “Training Opportunities”, available:http://www.tesco-graduates.com/home/why-tesco/training [accessed 01/03/2010] Page 18 of 23 Manish Abraham
  • 19. The Balanced ScorecardTesco (2009) “Financial Highlights”, available:http://www.tescoplc.com/plc/ir/financials/highlights/ [accessed 01/03/2010]The Times 100 (2010) “Training”, available:http://www.thetimes100.co.uk/case-study--how-training-development-supports-business-growth--132-359-3.php [accessed 02/03/2010]The Times 100 (2010) “Identifying Training Needs”, available:http://www.thetimes100.co.uk/case-study--how-training-development-supports-business-growth--132-359-2.php [accessed 02/03/2010]Books:Drury, C. (2004) Management and Cost Accounting, 6th ed., Thomson, ItalyKaplan, R.S., Norton, D.P. (1996) The Balanced Scorecard: Translating Strategy into Action,Harvard Business School Press, Boston, MA,.Kaplan, R.S., Norton, D.P. (2001) The Strategy Focused Organization: How BalancedScorecard Companies Thrive in the New Business Environment, Harvard Business SchoolPress, Boston, MA,.Journals:Atkinson, H. (2006) “Strategy implementation: a role for the balanced scorecard?”,Management Decision, Vol. 44(10), pp 1441- 1460Chavan, M. (2009) “The balanced scorecard: a new challenge”, Journal of ManagementDevelopment, Vol. 28(5), pp 393-406 Page 19 of 23 Manish Abraham
  • 20. The Balanced ScorecardChia, A., Goh, M. and Hum, S. (2009) ‘Performance measurement in supply chain entities:balanced scorecard perspective’, Benchmarking: An International Journal, Vol. 16(5), pp605-620Delaney-Klinger, K., Boyer, K. and Frohlich, M. (2003) ‘The return of online groceryshopping: a comparative analysis of Webvan and Tesco’s operational methods’, The TQMMagazine, Vol. 15(3), pp 187-196Editors of Strategic Direction. (2009) ‘Objectives managed and steered to appraisal’,Strategic Direction, Vol. 25(9), pp 5-8Fearne, A., Duffy, R., and Hornibrook, S. (2005) ‘Justice in UK supermarket buyer-supplierrelationships: an empirical analysis’, International Journal of Retail & DistributionManagement, Vol. 33(8), pp 570-582Hayman, K. And Lorman, A. (2004) ‘Graduate training schemes have demonstrablyaccelerated promotion patterns’, Career Development International, Vol. 9(2), pp 123-141Kettunen, J. (2005) ‘Implementation of strategies in continuing education’, InternationalJournal of Educational Management, Vol. 19 (3), pp 207-217Marr, B., Adams. C. (2004) ‘The balanced scorecard and intangible assets: similar ideas,unaligned concepts’, Measuring Business Excellence, Vol. 8(3), pp 18-27Papenhausen, C. (2006) ‘Implementing the Balanced Scorecard at a college of business’,Measuring Business Excellence, Vol. 10(3), pp 15-22Punniyamoorthy, M. and Murali, R. (2008) ‘Balanced score for the balanced scorecard: abenchmarking tool’, Benchmarking: An International Journal, Vol. 15(4), pp 420-443 Page 20 of 23 Manish Abraham
  • 21. The Balanced ScorecardRowley, E.J. (2003) ‘Beds, insurance and coffee – a complete retail experience from Tescoonline’, British Food Journal, Vol. 105(4/5), pp 274-278Seraphim, D. (2006) ‘Balanced scorecard: keep it simple!’, Measuring Business Excellence,Vol. 10(2)Tuner, J.J. and Wilson, K. (2006) ‘Grocery loyalty: Tesco Clubcard and its impact onloyalty’, British Food Journal, Vol. 108(11), pp 958-964Valiris, G., Chytas, P. and Glykas, M. (2005) ‘Making decisions using the balanced scorecardand the simple multi-attribute rating technique’, Performance Measurement and Metrics,Vol. 6(3), pp 159-171Vignali, C. (2001) ‘Tesco’s adaption to the Irish market’, British Food Journal, Vol. 103(2),pp 146-163Van Der Klink, M.R. and Streumer, J.N. (2002) ‘Effectiveness of on-the-job training’,Journal of European Industrial Training, Vol. 26(2/3/4), pp 196-199Witcher, B.J. and Chau, V.S. (2008), ‘Contrasting uses of balanced scorecards: case studies attwo UK companies’, Strategic Change, Vol. 17(3/4), pp 101-14. Page 21 of 23 Manish Abraham
  • 22. The Balanced Scorecard Appendix 1. Tesco plc Sainsbury plc 09 08 09 08ROCE 15% 12% 8.63% 8.19% 2. Tesco plc Sainsbury plc 09 08 09 08Gross Profit % 7.76% 7.67% 5.48% 5.62% 3. Tesco plc Sainsbury plc 09 08 09 08Net Profit % 6.3% 6.5% 3.2% 3.4%Working Capital Ratios 4. Tesco plc Sainsbury plc 09 08 09 08Stock Turnover 19.6 times 20 times 26.1 times 26.5 timesLiquidity Ratios 5. Tesco plc Sainsbury plc 09 08 09 08Current Ratio 0.75:1 0.58:1 0.54:1 0.65:1Gearing Ratios 6. Tesco plc Sainsbury plc 09 08 09 08Debt/Equity 1.17:1 0.68:1 0.63:1 0.51:1 7. Tesco plc Sainsbury plc Page 22 of 23 Manish Abraham
  • 23. The Balanced Scorecard 09 08 09 08Interest Cover 7.18 times 12.21 times 4.15 times 4.63times Page 23 of 23 Manish Abraham