Caltex GmbH refines petrol and sells it through its own Caltex petrol stations. On the basis of

Question:

Caltex GmbH refines petrol and sells it through its own Caltex petrol stations. On the basis of market research, Caltex determines that 60% of the overall petrol market consists of ‘service-oriented customers’, medium- to high-income individuals who are willing to pay a higher price for petrol if the petrol stations can provide excellent customer service such as a clean facility, a convenience store, friendly employees, a quick turn-round, the ability to pay by credit card, and high-octane premium fuel. The remaining 40% of the overall market are ‘price shoppers’ who look to buy the cheapest petrol available. Caltex’s strategy is to focus on the 60% of service-oriented customers. Caltex’s balanced scorecard for the year 2017 is given below. For brevity, the initiatives taken under each objective are omitted. 


Required 

1. Was Caltex successful in implementing its strategy in 2017? Explain your answer. 

2. Would you have included some measure of employee satisfaction and employee training in the learning and growth perspective? Are these objectives critical to Caltex for implementing its strategy? Why or why not? Explain briefly. 

3. Explain how Caltex did not achieve its target market share in the total petrol market but still exceeded its financial targets. Is ‘market share of overall petrol market’ the correct measure of market share? Explain briefly. 

4. Is there a cause-and-effect linkage between improvements in the measures in the internal business process perspective and the measures in the customer perspective? That is, would you add other measures to the internal business process perspective or the customer perspective? Why or why not? Explain briefly. 

5. Do you agree with Caltex’s decision not to include measures of changes in operating profit from productivity improvements under the financial perspective of the balanced scorecard? Explain briefly.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Management And Cost Accounting

ISBN: 9781292232669

7th Edition

Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan

Question Posted: