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Balanced Scorecard Program

Balanced Scorecard Program. Lia Torre Terri Leofsky Tory Kindlick Yoftahe Zewdu Iyolo Mabila Rachel Katz. Company Overview. Nation’s largest bookstore As of January 31, 2009 operated 778 bookstores and 1 website. Employs 37,000 full and part time employees

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Balanced Scorecard Program

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  1. Balanced Scorecard Program Lia Torre Terri Leofsky Tory Kindlick Yoftahe Zewdu Iyolo Mabila Rachel Katz

  2. Company Overview • Nation’s largest bookstore • As of January 31, 2009 operated 778 bookstores and 1 website. • Employs 37,000 full and part time employees • Each store features 60,000-200,000 unique titles • BN.com does 10% of total sales • Annual Sales 5.121 Billion

  3. Company History • Current company chairman, Leonard Riggio, started as a clerk at the NYU bookstore. • Started his own competing book store in 1965 • In the 1970s acquired the declining flagship Barnes & Noble trade name and flagship bookstore in Manhattan. • Within a few years, Mr. Riggio transformed the Fifth Avenue store into "The World’s Largest Bookstore," with 150,000 textbook and trade titles.

  4. Company Operations Barnes & Noble operations consist of: • retail bookselling • college bookstore management • online retailing • book publishing

  5. Company Mission Our mission isto operate the best specialty retail business in America, regardless of the product we sell.  Because the product we sell is books, our aspirations must be consistent with the promise and the ideals of the volumes which line our shelves.  To say that our mission exists independent of the product we sell is to demean the importance and the distinction of being booksellers. As booksellers we are determined to be the very best in our business, regardless of the size, pedigree or inclinations of our competitors. We will continue to bring our industry nuances of style and approaches to bookselling which are consistent with our evolving aspirations. Above all, we expect to be a credit to the communities we serve, a valuable resource to our customers, and a place where our dedicated booksellers can grow and prosper.Toward this end we will not only listen to our customers and Booksellers but embrace the idea that the Company is at their service.

  6. Competitive Landscape 1) Amazon.com, Inc. 2) Books-A-Million, Inc. 3) Borders Group, Inc. Industries Where Barnes & Noble, Inc. Competes: • Music, Video, Book & Entertainment Retail • Nonresidential construction • Media • Clay, Ceramic, And Refractory Minerals • Publishing • Retail

  7. Financial Perspective Goals Measures Customer Perspective Operations Perspective Goals Measures Goals Measures Innovation Perspective Goals Measures The Balanced Scorecard How do we look to owner’s? In which activities must we excel? How do customers see us? How can we continue to improve?

  8. Customer Perspective Goals: 1) Satisfy Customer Needs 2) Maintain Brand Awareness Among Customers Objectives: • Increase Customer Loyalty/Retention • Maintain strong sense of Customers’ changing needs • Add value and convenience for customers • Increase perception as community store

  9. Customer Perspective Objective: Increase Customer Retention/Loyalty Measure: Increase in returning customers online and in retail locations Target: 80% of customers are repeat / 20% increase in loyalty program sign ups Initiatives: • Provide excellent customer service and an outstanding customer experience either online, at retail locations or through the service center. • Give customers free access to loyalty program during certain times • Nook Hotline

  10. Customer Perspective Objective: Maintain strong sense of Customers’ changing needs Measure: Number of online surveys filled out Target: 1,000 surveys completed per country Initiatives: Incentives customers to provide insight as to how B&N can be of better service Customers who fill out online survey get 10% off their next purchase

  11. Customer Perspective Objective: Add value and convenience for customers Measure: Increase number of visitors to website Target: Increase number of visitors from 365 Million to 450 million Initiatives: Drive customers to website using affiliate marketing tactics, giving customers free shipping on their online orders, presenting in-store customers with coupons valid on internet purchases only, offering customers special information only available on the web (info about in store events, coupons) In-store kiosks

  12. Customer Perspective Objective: Increase perception as community store Measure: More people participating in B&N programs Target: 5% of B&N customers to participate Initiatives: In store book clubs, online book club blog, test prep courses, Local college affiliation (sell university clothing and books), open mic night poetry reading

  13. Financial Perspective In 2008: Fiscal Year Jan 31-Jan 31 (Recently shifted year to end April 31) No debt on the balance sheet $282 million cash on hand Comparable sales down 5.4% After tax earnings of $76 million Leonard Riggio owns 1/3 of company’s share

  14. Financial Perspective Goal: 1) Financial Stability Objectives: • Maintain Real Estate Strategy • Increase Department Same Store Sales • Increase B&N.com Financials • Increase EVA

  15. Financial Perspective Objective: Continue to exit small stores in the malls and sign shorter leases than competitors Measure: Sales per total square feet year over year Target: Increase sales per square foot Initiatives: Continue Real Estate Strategy, Continue to relocate stores at end of terms to higher potential locations

  16. Financial Perspective Objective: Continue to increase sales by department (return to 2007 levels) Measure: OBY department sales increase; particularly the children’s department Target: Increase category by 5% year over year Initiatives: Increase promotional activities within the children’s department; Direct mailing; Online mailings; Create book blogs and online book clubs

  17. Financial Perspective Objective: Increase B&N.com Financials Measure: Increase B&N.com sales Target: Increase sales by 7% (Half of Growth from 06 to 07) Initiatives: Advertise within the store, Increase online promotions

  18. Financial Perspective Objective: Maximize Shareholder Value Measure: Increase EVA Target: Increase EVA to a positive Initiatives: Increase revenue, control expenses, control capital

  19. Financial Perspective EVA = Investment center’s after-tax operating income – Investment Charge EBITA(1-Tax Rate) = After-tax operating income 143,331(1-.394) = 86,859 (Total Assets – Current Liabilities) x WACC = Investment Charge (2,993,888-1,475,675) = 1,518,213

  20. Internal Operations Goals: • Increase efficiency of operations to decrease costs • Innovate to improve effectiveness of meeting the needs of our customers Objectives: • Improve employee productivity • Improve inventory management • Reduce order-to-delivery time for B&N.com orders • Develop customer focused process innovations

  21. Internal Operations Objective: Improve employee productivity Measure: Same store units sold per hour Target: Increase by X % Initiatives: Motivate employees to perform at a higher level of productivity through incentive programs.

  22. Internal Operations Objective: Improve inventory management Measure: inventory turnover Target: Initiatives: Continued improvement of supply chain system to reduce inventories. Consolidate inventory management of multiple distribution channels

  23. Internal Operations Objective: Reduce order-to-delivery cycle time for B&N.com orders Measure: Average order-to-delivery time Target: Initiative: Improved relationships with shipping vendors

  24. Internal Operations Objective: Develop customer-focused process innovations Measure: Number of innovations per year Target: Two innovations in first year of implementation Initiatives: Improve search in-store inventory feature on B&N.com. Install in-store kiosks for finding books in the store.

  25. Internal Operations Objective: Increase Barnes & Noble.com sales Measure: Increase percentage of total sales from Barnes & Noble.com yearly sales Target: Increase Barnes & Noble.com sales by 3% Initiatives: Create incentives for customers to shop online instead of in-store

  26. Linking the Balanced Scorecard to Barnes & Noble Strategy • Show Causal linkages…..Links b/w perspectives (flow chart) • Pg 430 in book for reference.

  27. The Future of Barnes and Noble

  28. References • http://news.cnet.com/Borders,-Barnes--Noble-take-separate-paths-to-profits/2100-1017_3-245231.html • http://img213.imageshack.us/i/bm071230couponaq4.jpg/

  29. Deleted Slides

  30. Financial Perspective In March of 2009, B&N acquired Fictionwise, a leader in the e-book marketplace. They paid $15,700 cash.

  31. Financial Perspective Objective: Increase profitability of Fiction wise Measure: ROI - Return on Investment Target: 15% Initiative: Release of the nook, pricing discounts, advertising on website, in-store advertising

  32. Real Estate Strategy Exit small mall stores Sign shorter leases then competitors • Outcome: Sales per square foot lead the industry

  33. Financial Perspective Objective: Increase Sales by B&N club members Measure: Year over year sales by card holders Target: Increase sales by 5% Initiative: Increase membership focus on website; Increase member-only promotions

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