Dransfield Company manufactures an electronic component, ZP98. This component is significantly less expensive than similar products sold by Dransfield’s competitors. Order-processing time is very short; however, approximately 10% of products are defective and returned by the customer. Returns and refunds are handled promptly. Yorunt Manufacturing, Dransfield’s main competitor, has a higher priced product with almost no defects, but a longer order-processing time.
REQUIRED
1. Draw a simple customer preference map for Dransfield and Yorunt using the attributes of price, quality, and delivery time. Use the format of Exhibit 13-3 (p. 522).
2. Is Dransfield’s current strategy that of product differentiation or cost leadership?
3. Dransfield would like to improve quality without significantly increasing costs or order-processing time. Dransfield’s managers believe the increased quality will increase sales. What elements should Dransfield include in its balanced scorecard?
4. Draw a strategy map like the one in Exhibit 13-4 (p. 524) to explain cause-and-effect relationships in Dransfield’s balanced scorecard.