QUESTION TWOAsonaba Stores $($Asonaba$)$ is a listed business with a chain of $126$ general department stores inCountryside. The company is known for the high quality of its products, mainly food and clothing.The majority of its goods are sourced from trusted manufacturers and branded under thecompanys own Ason label. Currently, Asonaba faces a tough competitive environment with allthe major players in its market trying to secure their positions. Poor economic conditionsworldwide have significantly affected Countryside. Consumer spending is falling throughout theeconomy and there is no immediate likelihood of a resumption of growth. Asonabas chiefexecutive officer $($CEO$)$ has recently conducted a strategic review of the business in the context ofthe current economic recession. He has identified the following strategy as critical for Asonabassuccess: Focus on key customers those who are occasional shoppers but not currently loyal to thebusiness.Ensure Asonabas offering addresses their needs.Page $2$ of $5$Cut out costs that do not address these customers priorities.Amend current processes to meet this new focus.Build for the future with a programme of sustainable development.The company now needs to address the impact of this new strategy on its performancemeasurement systems. Asonaba uses a balanced scorecard to assess its strategic performance andthe scorecard is used to connect the business strategy with its more detailed performance measures.The CEO has asked you to consider the implications of the new strategy for the performancemeasures used by the business.Currently, Asonaba uses Economic Value Added $($EVA$),$ earnings per share $($EPS$)$ growth andshare price performance to monitor its financial performance. The company has supplied data inappendix $1,$ which the CEO wishes to see used to assess the financial performance from theshareholders perspective. She has asked that you explain the problems of capturing performancewith these particular metrics, and also, how they may affect managements behaviour.Finally, in order to aid refocusing the company, the CEO has requested a report to the boardcomprehensively benchmarking the current performance of Asonaba. The board needs to havebenchmarking exercise explained and then the results described. Appendix $2$ contains dataanalysing Asonaba, its two main competitors and statistics provided by the government ofCountryside. A junior analyst has already correctly completed the preliminary calculation workfor benchmarking in appendix $3.$ The CEO has requested a critical assessment of these differentsources as well as the comments on the results of the analysis.APPENDIX $1$Financial data for Asonaba StoresOperating profitInterestProfit before taxProfit for the yearAverage number of shares$2022$GHSm$505\mathrm{.}740\mathrm{.}2465\mathrm{.}5353\mathrm{.}81,600\mathrm{.}02023$GHSm$435\mathrm{.}177\mathrm{.}6357\mathrm{.}5271\mathrm{.}71,600\mathrm{.}0$Economic value added $($EVA$)2022$GHS$306$m$2023$GHS$110$mStock market informationCountryside market indexRetailing sector indexAsonaba Stores $($average share price$)20221,115\mathrm{.}22,450\mathrm{.}7$GHS$2\mathrm{.}452023724\mathrm{.}91,911\mathrm{.}5$GHS$2\mathrm{.}08$Page $3$ of $5$APPENDIX $2($a$)$ Comparative dataCBS stores ABS Stores Asonaba$202220232022202320222023$Revenue: Food GHSm $1,5421,5382,1001,9781,9852,025$ Clothing GHSm $1,2341,2222,7232,6102,4502,475$Total GHSm $2,7762,7604,8234,5884,4354,500$Profit for the year GHSm $142127294193354272$No$.$ of stores $8183167186119126$No$.$ of suppliers $34003,1004,2004,2004,1224,468$No$.$ of warehouses $668977$b$)$ Government statisticsMarket totals revenue$20222023$GHSm GHSmFood retail $1,40312,656$Clothing retail $25,79222,500($c$)$ Asonaba data for $2019$Region by region $($Countryside is split into three large regions$)$Ashtown Basetown CentralRevenueFood GHSm $648810567$Clothing GHSm $7921,114569$Total GHSm $1,4401,9241,136$Profit for the year GHSm $8711173$No of stores $375138$No of warehouses $232$Page $4$ of $5$APPENDIX $3$Junior analysts working papers$($a$)$ Comparative dataCBS stores ABS Stores AsonabaRevenue: Food $-0\mathrm{.}3\%-5\mathrm{.}8\%2\mathrm{.}0\%$ Clothing $-1\mathrm{.}0\%-4\mathrm{.}1\%1\mathrm{.}0\%$Total $-0\mathrm{.}63\%-4\mathrm{.}9\%1\mathrm{.}5\%$Profit for the year $-10\mathrm{.}3\%-34\mathrm{.}5\%-23\mathrm{.}2\%$No of stores $2\mathrm{.}5\%11\mathrm{.}4\%5\mathrm{.}9\%$No of suppliers $-8\mathrm{.}8\%0\mathrm{.}0\%8\mathrm{.}4\%$No of warehouses $0\mathrm{.}0\%12\mathrm{.}5\%0\mathrm{.}0\%$CBS stores ABS Stores Asonaba$202220232022202320222023$Market share Food $12\mathrm{.}4\%12\mathrm{.}2\%16\mathrm{.}9\%15\mathrm{.}6\%16\mathrm{.}0\%16\mathrm{.}0\%$ Clothing $4\mathrm{.}8\%5\mathrm{.}4\%10\mathrm{.}6\%11\mathrm{.}6\%9\mathrm{.}5\%11\mathrm{.}0\%$CBS stores ABS store Asonaba$202220232022202320222023$Revenue per shop GHSm $34\mathrm{.}2733\mathrm{.}2528\mathrm{.}8824\mathrm{.}6737\mathrm{.}2735\mathrm{.}71($b$)$ Regional data for AsonabaAshtown Basetown Central TotalRevenue per shop GHSm $38\mathrm{.}9237\mathrm{.}7229\mathrm{.}9035\mathrm{.}71$Profit margin $6\mathrm{.}0\%5\mathrm{.}8\%6\mathrm{.}5\%6\mathrm{.}0\%$Required$($a$)$ Describe the four perspectives of the balanced scorecard showing how the new strategyof the business as outlined by the CEO links to the different perspectives. Illustrate your answerby suggesting appropriate performance measures for Asonaba for each of the detailed pointswithin the strategy. $(10$ marks$)$b$.$i$.$ Assess the financial performance of the company using the three shareholderperformance indicators. $(4$ marks$)$Page $5$ of $5$ii$.$ Critically evaluate the use of these performance metrics and how they may affectmanagements behaviour $(4$ marks$)$c$)$ Prepare a report to the board on a benchmarking exercise using the information giving in theAppendixi. Evaluate the benefit and difficulties of benchmarking in this situation $(4$ marks$)$ii$.$ Evaluate the performance of Asonaba using the data given in this question. Indicatewhat further information would be useful and conclude as the performance of thecompany. $(4$marks$)$Professional marks for appropriate format and style of report $(2$ marks$)$