Balanced scorecard and strategy 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.

1. Draw a simple customer preference map for Dransfield and Yorunt using the attributes of price, quality, and delivery time.

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 13-3 to explain cause-and-effect relationships in Dransfield’s balanced scorecard.