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Case Study

Case Study. Northlake Bookstore: Benchmarking for Performance Evaluation. Content. Ⅰ.Case overview Ⅱ.Strategic objectives of Northlake Bookstore Ⅲ.Benchmarking analysis from four perspectives of BSC Ⅳ.Summary of strengths & weaknesses Ⅴ.Three steps for improvement. Ⅰ.Case overview.

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Case Study

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  1. Case Study Northlake Bookstore: Benchmarking for Performance Evaluation

  2. Content • Ⅰ.Case overview • Ⅱ.Strategic objectives of Northlake Bookstore • Ⅲ.Benchmarking analysis from four perspectives of BSC • Ⅳ.Summary of strengths & weaknesses • Ⅴ.Three steps for improvement

  3. Ⅰ.Case overview Where Problem Who Textbook sales for this fall had decreased from the prior fall sales In Northlake Bookstore When Wendy-Manager Chuck-Boss In September 2004 • What to do • Employbenchmarking analysisto figure out the reasons behind the poor performance • Then identify how tosustainthe excellence and improve the inferior performance • Further more, determinea long-term action plan for improvement

  4. ExcellentService To provide service excellence for the students, faculty, staff, alumni and guests of the University A profit center To contribute to the overall profitabilityof the University as well as being efficient and controlling costs. Ⅱ.Strategic Objectivesof Northlake Bookstore Strategic Objectives To achieve high customer satisfaction To attain high profitability

  5. From strategy to action --on the basis of BSC

  6. The Analytical Hierarchical Process (AHP) 1=equal importance to both elements in the matrix 3=moderate importance of one element compared with another 5=strong importance of one element compared with another *Normalized averages are calculated by dividing the row totals by the aggregate.

  7. Thus, in a short term, we decide to pay more attention on improving the profitability of Northlake, i.e. to emphasize its role as a profit center. • Qualitative analysis: • Northlake Bookstore faces threat from online textbook vendors • Donations and gifts to the University were down Quantitative analysis: The result of hierarchical analysis shows Financialis the most important measure to realize the strategy.

  8. III. Benchmarking AnalysisFinancial perspective

  9. III. Benchmarking AnalysisFinancial perspective Advantages

  10. Financial perspective • Sales per sq. ft. of space should be increased • Make best use of its space • Increase Sales per employee • Reduce labor expenses per employee

  11. Product Line Profitability < > < > < > < < > < High-margin Product: Try to increase % of sales for used course books and Supplies&sundries Sustain the advantage in the margin of such products Low-margin Product

  12. Pay attention to used text sales As a high-margin product line, used textbooks should be sold more.

  13. Price gap between Northlake and Online Vendors

  14. Where do the sales come from? As a solid shop inside the university, Northlake Bookstore doesn’t need to perform as well as Amazon on web sales. Northlake can increase its online sale to the average level.

  15. Notice: Inventory Turnovers of Software&accessories and Supplies&sundriesare lower than average levels. Internal process perspective Inventory Turnovers Analysis——External Comparison

  16. Internal process perspective Internal Comparison • Days textbooks in receiving area is increasing • Northlake’s open hours are less than average level • Textbook Sell-Through is increasing year by year

  17. CustomerPerspective • Faculty satisfaction is increasing • Customer Queing time is decreasing • Products available ratio is high and increasing year by year

  18. Key Advantages CustomerPerspective One-stop back-to-school shopping: Provide various products, Get freshmen ready for the first day Real experience： As a solid shop in the campus, it provides real experience for customers Close relationship with customers: Hire students as part-time employees, who are familiar with the customers (i.e. students)

  19. Learning & Growth Perspective Improvement of the working efficiency is required

  20. Learning & Growth Perspective Set Up New Measures

  21. Ⅳ.SWOT • Strength • Steady source of customers • Real experience for customers • Close relationship with customers • Good performance in profitability in the past 3 years • Weakness • Online sales • Staff marketing abilities • Space utilization • Late or inaccurate orders • Opportunity • New business lines • Potential online customers • Threat • Online textbook vendors and publishers • Increasing costs of textbook

  22. Ⅴ. Three Steps for Improvement • Provide Service Excellence • Sustain Good Profitability Three-year Objectives • Realize a net-income-increase of 15% than prior fiscal year One-year Objectives • Attain the same level of Net Income as prior winter Three-month Objectives

  23. Three-month Plans

  24. Three-month Plans * We decide the target according to benchmark

  25. Three-month Plans * We decide the target according to the BMK or Northlake’s good performance in past years

  26. Three-month Plans * We decide the target according to BMK

  27. Three-month Plans

  28. Realize a net-income-increase of 15% than prior fiscal year Continue the three-month actions New Ways to Realize Profits • Make better use of its space - Create a “Reading Bar” inside the bookstore • Develop New Business Lines - Provide services like coffee and internet • Make better use of its space • - Rent some space to proper • tenant for business use (e.g. photocopying & printing) One-year Plans OR

  29. Three-yearplans Satisfaction • Gather information on Feedback & Demand of customers by web survey • Efficiently solve problems identified in surveys • Focus on details, e.g. cut down customer queuing time at registers Service • Update the latest academic lecture information on poster board for faculty and students 4S • Serve as an official textbooks supplier for Northlake University Supplier Sponsor • Assist to organize activities e.g. sports meeting, academic case competition

  30. Thank you !

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