What happens if you reach Tanzania when you had planned for Italy instead?

After a long and arduous wait, you’re finally en route to your dream destination (in my case, Italy). You’ve spent endless hours planning the travel logistics, researching all the tourist spots etc., and you just can’t wait to touch and embrace the scenic beauty you have envisioned for so long. The aircraft has finally landed. You open your eyes and BOOM! You are in an entirely different location (say, Tanzania), not Italy.

Expect the unexpected to say the least, right?

Take a moment to imagine the excitement, emotions, and the amount of planning that a couple goes through when expecting a newborn (especially if it’s their first baby). What do you think happens to all these feelings when their baby is born with Special Needs instead? All dreams come crashing down in an instant, and the mind goes numb.

Of course, Tanzania does not offer the architecture of Rome or the beauty of Venice, but it has its own charm in the form of Mt. Kilimanjaro and the Safaris. One does need to learn and acquire special skills though, such as climbing, in order to be able to explore and fully enjoy these landmarks. That’s exactly what parents of Special Needs children do—learn several new skills to raise their kids. One of the most common challenges that they come across is to find playmates for their kids. Life Enrichment Options and Camp Prime Time are two such organizations that actively provide the kind of support and playing activities that these special kids need.

As the parent of a Special Needs child myself, I can vouch for how happy and adventurous the journey of raising my son has been so far. My son loves racing cars at LEO events, which have been designed especially for kids with special needs. In addition, he enjoys the great outdoors of the Pacific Northwest which offer fishing, boating, and the wilderness with free lodging and food at Camp Prime Time.

Find more inspirational stories by clicking the links provided above.

I am sure all of you are already making a difference to the community by donating to your favorite charities, churches, temples, etc. Please consider donating some amount to these wonderful organizations as well to make an impact on the life of Special Needs kids and adults. If you are Microsoftian, you work for an amazing employer as it matches your donation amount. I am sure other employers are as good as Microsoft is:), consider your employer based program to donate if it matches your contribution. Your individual generosity is always much appreicated. thanks for making impact on the life of special eed kids and adults.

Reference

WELCOME TO HOLLAND, by Emily Perl Kingsley; http://www.our-kids.org/Archives/Holland.html

New York: The Empire State

New York City!…in a word “Amazing”. I cannot describe this city in words. You need to go, visit and breathe this city. I studied in Bombay (Now Mumbai) and couldn’t stop comparing Mumbai with New York. Both cities, never sleeps. Even at 1 AM, you can catch local in Mumbai and subway in NYC. Atlantic and Arabian ocean respectively both cities. Skyrocket buildings in both cities. Wall street & NY stock Exchange in NYC and Dalal street and Indian stock exchange in Mumbai. Mumbai expands its portfolio with Bollywood but New York says that you need to go to LA to get Hollywood. Similar super fast life in both cities. Similar traffic, similar diversity. I know it is not apple to apple comparison but folks who have visited both cities will not disagree with me. When I was in Mumbai, I couldn’t imagine living in any other city in India. When I left Mumbai and went Delhi, I missed the pace of life. Now after living in Seattle, do I want o live in New York; probably not unless I am getting a condo with a view in Manhattan :). But your world trip or your travel dreams cannot be completed until you visit this city. It is a must visit city.

With a skyline that’s recognizable worldwide , New York City is a one-of-a-kind destination with diverse population. From world-class dining to shopping to nightlife to culture, New York City’s streets pulsate with an unmistakable rhythm that attracts more than 45 million visitors annually.

Iconic, hip, trendsetting and ever-changing, New York City lives up to its superlatives. Underneath the Big Apple’s jagged skyscraper skyline, museums dazzle with the latest collections, celebrity chefs unveil their newest creations, and Broadway continues to stage elaborate, glittering shows.

Best thing we did in NYC that we took 3 days hop on hop off double decker bus tour. Most convenient way to visit NYC.

Tour bus and guides helped us to visit The Empire State Building, Central Park, the Top of the Rockefeller Observation Deck and the South Street Seaport—to name just a few— while strolling around Wall Street, Chinatown, Little Italy, Greenwich Village and the Lower East Side, mid town and uptown.

It’s home to myriad familiar sights and neighborhoods, Manhattan is actually the smallest of New York’s five boroughs. The majority of the City’s land mass and population are found in Brooklyn, Queens, the Bronx and Staten Island. We headed to the Bronx to catch a baseball game at the Yankee Stadium.

How can we miss historic Brooklyn Bridge which is a great way to start exploring the City’s most populous borough, home to Coney Island, the Brooklyn Museum, Prospect Park and picturesque brownstone-lined streets. Without the Brooklyn bridge walking tour it looks like Karan Johar’s movie without NYC or Kajol.

New York City is also a shopper’s paradise. Tea shops in Chinatown to chic designer flagships on Fifth and Madison Avenues. SoHo’s artistic legacy inspires the many boutiques that now line its streets, while hip vintage and thrift stores abound in the East Village and Williamsburg, in Brooklyn.

With some 20,000 restaurants, New York offers a culinary experience like no other city. Discover ethnic foods from around the world in Queens or nosh on a pastrami sandwich and a knish at Katz’s, one of the City’s oldest, and most beloved, delis.

Most famous attraction in my mind since I was a small kid- Times Square. Every year, we use to see new year celebrations at Times Square where you see bright lights shine on elaborate stage productions in Broadway ‘s theaters.

We had downtown trip including Empire State Building, Rockefeller center, Brooklyn bridge on day 1 &2 , mid town and uptown on day 3 and Status of Liberty, Ellis Island trip on day 4. Day 5 was dedicated for relaxing mid week at central park and times square in night. What a super city it is. Go, visit NYC.

Reference

http://www.frommers.com/destinations/newyorkcity/0021010001.html
http://iloveny.com/Cities-And-Towns/new-york-city.aspx

New Jersey: Liberty & Prosperity in Garden State

From Philadelphia, we traveled to state of New Jersey. It was Atlantic City, a seaside resort and gaming capital of the east coast. It is a thriving destination featuring world-renowned casinos and hotels, brand-name restaurants, unique attractions, headliner entertainment, championship golf, relaxing spas, upscale shopping and much more. We stayed in Trump hotel. Trump Taj Mahal is designed as a replica of Taj Mahal. Although it is not the replica but tried to represent that white marble beauty in front of Atlantic Ocean compare to River Yamuna in Agra. It is across the world-famous Boardwalk of Atlantic City. Lined with shops, restaurants and food stands, casinos and more, it’s a people-watcher’s delight. The Boardwalkstill stands as a historic American symbol of good times and rich culture. In addition to the casino hotels. The Atlantic City Art Center on Garden Pier provides visitors an unparalleled opportunity to view the work of noted national and regional artists with the beautiful Atlantic Ocean as a backdrop.

New Jersey’s tallest lighthousewas walking distance from Casino. I think it is one of the oldest lighthouses in the country and we got to see the breathtaking views of the Atlantic City skyline .

Lost some money in casino the other day and then traveled to Newark where we stayed. Had great food at Jersey cityand vicinity. Lot and I mean literally lot of Indians, Gujju bhai…funny part was at Atlantic city hotels, Newark hotel, Jersey city restaurants, NJ transit, gas station…everywhere found Gujju’s. That’s a little India. Keep on traveling with me to our next destination New York.

Reference

http://www.tripadvisor.com/Attractions-g29750-Activities Atlantic_City_New_Jersey.html
http://visitnj.org/new-exciting-attractions-atlantic-city%E2%80%99s-move

I Love Washington D.C.

I was super excited about traveling to my favorite city in US. I call that as World capital. For many Americans it is almost a pilgrimage. If you want past and future in One Place, travel to this city where and its institutions are not only the seat of our federal government, but also a symbol of our past as a nation and the promise of our future as a people. One moment you are looking at the Declaration of Independence at the National Archives, and soon you are standing shoulder to shoulder with reporters in the “Senate Swamp,” a spot on the lawn of the U.S. Capitol where senators often hold outdoor press conferences. You know I am talking about Washington, District of Columbia.

From Baltimore, we reached our hotel in Capitol hill. What a beautiful location, a mile from capitol building. I couldn’t resist going to Pennsylvania Avenue:). Once you travel on that road, you fell that you are at a special place where all states meet together…Standing as the central point of interest in the Capitol Complex, The United States Capitol is considered to be one of the most architecturally impressive buildings in the world. It’s the home of the United States Capitol and Grounds, Senate, House of Representatives, Supreme Court, Library of Congress and Botanic Garden.

Once we finished capitol tour, saw that Washington monumentis pretty close…but actually it is not (not as close as it looks). It is Qutub Minar of US. It is the symbol of the city of Washington DC, 555-foot marble obelisk on the National Mall honors the nation’s first president. About one-third of the way up the obelisk is a visible change in the marble, evidence of the onset of the Civil War.

My FIL (father in law) was getting super excited about the next destination…president house. Although it is 1/3 or lesser size from Indian president house but many times bigger in rapport. White Housewas our next destination. The second president, John Adams, was the first to live in the White House in 1801. Originally called the “Executive Mansion,” it earned the nickname “White House” after its marble exterior was whitewashed to cover burn marks from damage by the War of 1812.

Enough of day 1, next day morning our destination was the memorial of the one of the most respected person in the world- Lincoln. The Lincoln Memorialis a tribute to President Abraham Lincoln and the nation he fought to preserve during the Civil War. The Lincoln Memorial resembles a Greek temple, and its 36 Doric columns represent the 36 states that existed when Lincoln died. The Gettysburg Address is inscribed on the south wall of the memorial, Lincoln’s second inaugural speech on the north, and a painted mural shows the angel of truth freeing a slave. But the real attraction of the Lincoln Memorial is Lincoln himself, and the gigantic seated statue that seems to embody his spirit. In the hearts of the people for whom Lincoln saved the Union, the memory of Abraham Lincoln is enshrined forever. Beneath these words, the 16th President of the United States—the Great Emancipator and preserver of the nation during the Civil War—sits immortalized in marble. As an enduring symbol of freedom, the Lincoln Memorial attracts anyone who seeks inspiration and hope.

DC has no shortage of memorials, rest of the day we spent visiting other museums and memorials.

Adjacent to the Lincoln Memorial Reflecting Pool, the Korean War Memorialfeatures a large mural wall with sculpted soldiers and inscribed with the words “Freedom is not Free.”

Vietnam War memorialis intended to remember the American military who sacrificed their lives during the Vietnam War.

The National World War II Memorialhonors the 16 million Americans who served in WWII and the more than 400,000 that died.

Third day, our destination was to visit the person who was the principal author of the Declaration of Independence and the third president of United States. Jefferson Memorialhas19-foot bronze statue of Jefferson surrounded by his most famous writings stands as the centerpiece of the memorial.

Then to Supreme CourtBuilding which is majestic in size and rich in ornamentation, serves as both home to the Court and the manifest symbol of its importance as a coequal, independent branch of government.

Finally our destination was Gandhi memorial. What an honor…I felt proud that I come from the same country where Gandhi is known as father of our nation. To honor the life and achievements of Mahatma Gandhi, DC has Gandhi memorial center, one of the popular tourist destination showing spiritual and cultural heritage of India.

That’s why I love DC. Keep on traveling with me.

Reference:

http://seniorliving.about.com/od/travelsmart/a/washingtondc.htm
http://www.aoc.gov/cc/visit/index.cfmhttp://www.washingtondc.worldweb.com/WashingtonDC/Washington/SightsAttractions/HistoricSitesInterpretiveCentres/index.html
http://www.nps.gov/linc/index.htm>

Understanding Market Needs Through Customer Visits

When conducted effectively, the information gleaned from real-world customer environments can be an important part of your product definition and marketing efforts. By Gopal Shenoy.
http://www.pragmaticmarketing.com/publications/magazine/4/5/0610gs/?searchterm=Understanding%20Market%20Needs%20Through%20Customer%20Visits

Most successful marketing strategies for creating product demand require the use of customer feedback to assess just how well a product actually impacts market needs. While the success of some products rely more heavily on factors that are sometimes difficult to define—such as impulse buying, stylistic preferences, and market trends—the essence of most product marketing is finding ways to satisfy actual, functional customer needs. Successful product marketing is as much about developing products that provide solutions to real customer problems, address necessary tasks, or fulfill documented needs, as it is about communicating product benefits. Market adoption of many types of products often depends on how well a particular product satisfies its customer’s requirements.
While companies employ a variety of tools for soliciting customer feedback and assessing market needs—including enhancement requests, customer surveys, customer-service reports, sales feedback, and focus groups—there really is no substitute for actually standing in the shoes of a customer. Understanding market needs requires the ability to see the world from your customers’ points of view, and acquiring those perspectives demands an ongoing program of visits to customer sites.
As with any research endeavor, the effectiveness of customer visits and the value of the information gathered for improving and marketing your products are directly related to how well you plan, conduct, document, and utilize customer visits. When conducted effectively, the information gleaned from real-world customer environments can be an important part of your product definition and marketing efforts. The information in this article is the result of more than 200 visits conducted over the past decade to companies in more than 10 countries that use a mechanical design software product.
Become an explorer
Before visiting a customer, you need to clearly define the purpose of the visit. Ask yourself why you need to visit customers. What are your motivations and what are your goals? How can visiting customers result in a better, more marketable product? By carefully considering these questions, you will be able to define the objectives of your customer visit program, determine how many visits to make, select the specific customers to visit, and choose the geographies you should cover.
Customer visits may not be the appropriate market research vehicle if your intent is to forecast potential sales in a new market or determine a customer’s preference for one product over another. The single, overarching purpose of product management customer visits should be to explore the customer’s environment, problems, and needs, so you can understand how to
improve the functional performance and marketing of your product. To do this effectively, you have to assume the role of an explorer.
By assuming such a role, you will discover how your customers actually use your product and determine what is working well or not so well. Does your customer have a need that your product does not satisfy? How does your product fit within your customer’s ecosystem and what are the opportunities for improving your product’s usefulness to the customer?
Such visits contrast markedly with sales or support calls, during which the sole objective is to either develop workaround solutions to overcome the customer’s objections or troubleshoot a critical customer problem. You are not there to tout product features or an upcoming product introduction, as you probably would at a conference or a trade show. You should commit yourself to listening and absorbing information, like a sponge.
The reason a customer visit is different from other market research vehicles is that it truly gets you out of the “feature” world, where you are thinking in terms of features, technology, and assumed priorities, and realigns you with your customer’s “product” world. Your customer is more concerned with completing tasks (independent of specific features or technology used), meeting product deadlines, and beating the competition. As an explorer, you can take off your blinders and get a sense of the real priorities your customer faces. From a product marketing standpoint, your visit should be a learning exercise with most of the information moving in one direction: from the customer.
While many product marketers believe they know their customers inside out, there is much to be learned from visits to customer sites and more than a few surprises. Customers have a tendency to reveal more in an open, frank discussion on their own turf than they would over the telephone, on a survey, or in a focus group.
Some important discoveries are even unspoken. For example, during one of my customer visits, I noticed drawings marked up in red ink on a customer’s desk. I asked myself, why so many markups? Should we provide additional markup tools? Or why does the customerhave to do so much rework? Is it because we need additional design validation tools? Or do new designs always start as reworked old designs? Is there an opportunity for design reuse tools? These examples illustrate how unspoken discoveries can be made during customer visits that will enable you to improve your products and enhance their marketability. Such discoveries are not possible through telephone calls, customer surveys, technical support logs, or other research methods. You need to be on-site to observe what I call “unadvertised customer exhibits” and see the problems the customer may be facing. Sometimes, customers do not realize their pain points themselves, until you, as a product marketer, ask probing questions based on observations made during these visits.
Who to visit?
Once you have decided that a formal program of visiting customers would be beneficial to aid your product definition and marketing, you need to determine which customers to visit. In compiling a profile of the types of customers you want to visit, establish some general objectives.
Are you more interested in learning about customer needs in emerging or established markets, among new or experienced users, among existing customers or prospects, among users or actual buyers, at the user or management level? The ideal customer profile will depend on the nature of your product and how customers purchase and deploy it.
You should also assess how your customers break down geographically. If your product is used globally, you should design your customer visit program based on the geographic distribution of your customer base, such as 40% of visits in North America, 28% in Europe, 19% in Asia, 8% in Australia, and 5% in South America.
Another consideration is developing a list of customers who are open to a visit. Sources for names include sales staff, support personnel, and customer surveys. It’s easier to generate names if your company values, acknowledges, and promotes your customer visit program. We visit more than 250 customers a year and promote the program at all customer interactions, including trade shows, conferences, and user group meetings. We tell our customers that we would like to visit them for two hours at their location so that we can better understand their products, processes, and needs. By participating, the customers help us shape the future of our products so that they can better meet customer needs. We make it explicitly clear that such visits are not sales calls or product demos. In fact, I make it a point not to carry my laptop with me so there is no way I could get drawn into a demo of existing functionality. You have to keep reminding yourself that this is not about your product: it is all about the customer.
After you have established a list of prospective customers to visit, you will need to qualify each customer by convincing them that they need to participate. In order to make the visit as productive as possible, you want to visit customers who are cooperative and enthusiastic about the visit. This doesn’t mean you should only visit happy customers who will say “nice” things about your product but customers who are willing to provide insights into their design processes and give you an honest scorecard on how your product stacks up. You also need to clear the visit with your field/sales professionals so you know as much about the customer in advance as possible. You need to know if there are landmines to avoid or skeletons locked away to be left unearthed before scheduling a visit. Set expectations regarding the purpose and duration of the visit, as well as determine the availability of the appropriate personnel. Then, schedule the visit.
Who should visit?
Ideally, a customer visit should be made by a cross-functional team of people, representing key product management and development functions. For example, in the software realm, the team should include the product manager, the development manager, and the lead quality assurance professional. Individuals with similar roles should be involved in customer visits for manufactured products. The reason why this diversity is necessary is to include different perspectives in identifying and resolving customer issues. Because each member of the team has a distinct role, each will view customer problems and possible solutions from their own unique point of view. The combination of these viewpoints results in more pragmatic, suitable responses, in terms of product definition and marketing, to address newly discovered customer needs.
By a similar line of reasoning, the same team of professionals should participate in multiple visits to gain a wider perspective encompassing as many customers as possible. One cannot generalize the findings of a single visit across the entire customer base. Word of caution: software developers tend to go through the motions of doing a single customer visit so that they can claim they know what all customers want. It’s rarely that simple. Customer needs and desires vary as widely as the businesses they are involved in, and assessing what customers really need and want requires multiple visits to many different customer sites.
Another reason to establish a cross-functional customer visit team is to facilitate greater interaction and collaboration across functions through the natural bonding and familiarity that occurs through business travel. When individuals share airplanes, cabs, rental cars, hotels, and restaurants during a customer visit, they get to know one another on a personal level, which can result in closer professional relationships and greater cohesion in applying information gathered during customer visits to product definition and marketing activities. I joke that it is difficult for people who have suffered through traffic jams, missed flights, and rushed meals to argue over product features.
Preparing for the visit
Scheduling the visit is merely the first step in preparing for a successful customer visit. Be sure to research the company extensively to have a thorough understanding of the customer’s products and services.
Visit the company’s Web site, review all prior communications with the customer—such as bug reports and enhancement requests in the software industry—and go over whatever notes or communications came out of previous visits.
After you have completed your research, develop your interview questionnaire that includes a list of specific questions to ask customer representatives about the company’s operations and use of your product. Send the questionnaire to the customer for them to review and prepare ahead of time so you can maximize the time allotted for the visit. Reconfirm your visit a week before and a day prior to the scheduled date. And don’t forget to take along “goodies” for the customer, such as company hats, shirts, bags, and other promotional items. Don’t underestimate the value of these “goodies.”
Special preparation is required for international visits because of language barriers and cultural differences. When visiting a customer overseas, have your local office or representative arrange every aspect of the visit, from the dress code required to the expected forms of greeting. Including a local representative who not only speaks the language but also is steeped in the particular culture, ensures you respect cultural differences and avoid causing offense out of ignorance of local customs and norms.
The day of the visit
When the day of the customer visit eventually dawns and you have completed the necessary preparations for a successful, productive day, remind yourself to leave your personal opinions
and biases behind so you can become an objective listener. As Ries and Trout said in their book Bottom-Up Marketing,“Too many marketing people go through the motions of visiting customers, looking for facts that will confirm their previously formed opinions of what should be done.” You are there as an explorer, a listener, and must try to refrain from making the visit about you instead of the customer. Take the advice of the Greek philosopher Epictetus, who said, “Nature has given to me one tongue, but two ears, that we may hear from others twice as much as we speak.”
Your visit should last no longer than two hours. Following greetings, a sample agenda would include an introduction, a plant/facility tour, a review of the customer’s products/services, a discussion of the customer’s operations, and lastly, a discussion of the customer’s “pet” requests for your product.
Use the introduction period to set expectations and be sure to ask about both the good and the bad news relative to your product. This is your chance to set your customer at ease to get them talking and keep them talking. You are there to collect information, not defend positions, and must convince the customer that you need them to be as honest and forthcoming as possible in order to help you to help them. Start with simple questions and remember to remain polite and genuinely interested. Do not put customers on the defensive, challenge them, or question their professionalism by asking them, for instance, about why they choose to use one method over another. Usually, if I am visiting a customer who has manufacturing facilities on-site, I request a plant tour. This enables me to familiarize myself with their products, their way of doing things, and the terminology they use, keeping an eye out for the “unadvertised customer exhibits.”
Visit dos and don’ts
Our experience in conducting numerous customer visits has led to a list of dos and don’ts for conducting effective customer visits.
Do:
 Employ the principle of the five whys to get to the root of the problem. Customers tend to propose solutions rather than describe problems, so ask them why they need a solution in at least five different ways to truly understand an issue.
 Observe the human dynamics within the room, taking note of the customers’ expressions and emotions to determine who is being most candid about a problem or issue.
 Facilitate discussions by asking follow-up questions.
 Take notes, more notes, and even more notes. In other words, take as many notes as possible. It helps to designate certain roles within the team, such as a moderator, an observer, and a note taker.
 Write down customer quotes verbatim. Actual customer quotes are valuable for reporting back to management and promoting the potential resolution of an issue.
Don’t:
 Begin the discussion by asking for their “pet” product requests. If you do, it will dominate the discussion throughout the visit.
 Ask convoluted, overly complex questions. If “X=Y” and “Y=A” and “Z=D,” will it satisfy your need? Keep it simple.
 Ask leading questions, such as: “Don’t you think this solution is better than the other?” Be as objective as possible.
 Ask biased questions, such as: “We are thinking about this great idea. What do you think about it?” Even if they didn’t think the idea was great, they might agree with you rather than offend you. Don’t color your questions.
 Get defensive if a customer snubs the project you slaved away on.
 Take control of the computer mouse to show a customer how to use the software. Instead make a note and wait until the end of the meeting to educate the customer about any existing functionality that will satisfy his or her need.
 Tell the customer that his or her need is satisfied by an existing feature. Even if this is true, the customer may feel either insulted or stupid for not being aware of it. Continue listening to ensure that the feature will address the need and inform the customer of the fact during the closing stages of the visit.
What to do when things go wrong
Like anything else, Murphy’s Law applies to customer visits, where things can and do go very wrong. Here are a few examples: A customer can fixate on a particular “pet” product enhancement and monopolize the entire visit. The discussion can go off on a tangent completely unrelated to the customer’s needs relative to your product. The customer can criticize and insult your product, your company, and every person or partner related to it. The customer can contradict himself. The customer can speak primarily about another competing product.
When and if these things happen, do whatever you must to keep your cool. The worst thing you can do is to become angry with the customer. Never cut off the customer but don’t agree with him or her if he or she is wrong. Acknowledge what the customer is saying but don’t ratify it.
At the conclusion of the visit, prioritize the customer’s product enhancement requests as must have, should have, and nice to have. Remember to thank the customer for his or her time, hospitality, and candor, and send another thank-you note when you return to your office.
After the visit
As soon as you leave the customer site, conduct a debriefing session with your team to capture the salient points you learned during the visit. Note any problems that you may not have heard before. Compare the visit with other customer visits and determine whether there are any mid-course corrections to make.
When you return from the visit, write a report of your findings. It’s a good idea to write individual trip reports for each customer site. You can combine these individual reports into summary “group” or “segment” reports later. Your report should contain only “qualitative,” not
“quantitative,” information. Include customer quotes and outline the possible next steps in terms of product definition and marketing as a result of your findings.
Your customer visit reports should be sent to anyone in your company who is a decision maker regarding the definition of your product and how it is marketed. Sales and support personnel should be kept informed as well. By conducting an ongoing, effective program of customer visits, you can keep your finger on the pulse of your market’s requirements, improve your product to satisfy customer needs, and continue to differentiate yourself from your competition.
If you are interested in learning more about customer visits, I would strongly recommend reading Edward McQuarrie’s book titled Customer Visits: Building a Better Market Focus. To me, this book is the definitive text on how to do customer visits right and has aided my efforts to establish a productive customer visit program.
Finding a budget
I presented this topic at a few conferences and was asked how I was able to get a budget for customer visits. Like anything else, I suggest you start small, make it work on a smaller scale, promote the benefits of the program and then ask for more money. Asking for money to get on a plane and visit customers in Asia or Australia is not going to be easy without a proven track record of successes. If you have local customers, visit them first—it is not only cheaper to do that but also allows you to beta test your interview questionnaire and your program before spending a lot of money. Invite some of the managers whose support you will need later to justify the program to visit with you. Once you are able to justify how some of these visits have had a positive impact on your product/service and hence to your bottom line, money will come. Good luck!!

Gopal Shenoy is Strategic Marketing Manager at SolidWorks Corporation (www.solidworks.com), a leading producer of 3D computer-aided mechanical design software that has more than 525,000 users worldwide. Shenoy manages a group responsible for understanding the future requirements of the customer base and ensuring that the functionality delivered in the software meets customer needs. For more than ten years, Shenoy has visited customers ranging from Fortune 100 companies to mom-and-pop shops worldwide. In the past, he has also served as the Director of Educational Programs for the Boston Product Management Association and has spoken at the Software Marketing Perspectives conference. Contact Gopal at gshenoy@solidworks.com

Marketing- Environmental Analysis

The marketing environment surrounds and impacts upon the organization. There are three key perspectives on the marketing environment –

• Macro-environment
• Micro-environment
• Internal environment

The micro-environment

Micro environment includes suppliers that deal directly or indirectly, customers and other local stakeholders. It describes the relationship between firms and the driving forces that control this relationship. It is a more local relationship and the firm may exercise a degree of influence.

The macro-environment

This includes all factors that can influence and organization, but that are out of their direct control. A company does not generally influence any laws. It is continuously changing, and the company needs to be flexible to adapt. There may be aggressive competition and rivalry in a market. Globalization means that there is always the threat of substitute products and new entrants. The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology.

The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces-

Political Factors

• Monopolies legislation
• Environmental protection laws
• Taxation policy
• Employment laws
• Government policy
• Legislation

Political support is an influencing factor in developing business overseas as this is not only important at host country but the originating country as well. Political factors affect our overall strategy in terms of business set up such as lower taxation and governing/ administrative support, government support to tourism industry, other globalization factors etc. We also need to have our supporting mechanism such as insurance to cover the lawsuit and other legal implications.

Economic Factors

• Monopolies legislation
• Environmental protection laws
• Taxation policy
• Employment laws
• Government policy
• Legislation

Economy is another important consideration in any business plan. Poor economic conditions may mean that our target consumer has cut back on spending, and won’t be willing to pay as much for our services.

Socio Cultural Factors

• Demographics
• Distribution of income
• Social mobility
• Lifestyle changes
• Consumerism
• Levels of education

In global environment, we deal with multi-cultural people. Consumer opinions, trends and buying patterns varies by country or ethnic group and we are taking that into consideration to provide the better customer service to our global client’s. Due to ethnic, population density, language, food and religious diversity, our services needs very closed attention to serve our customers better.

Technological Factors

• New discoveries and innovations
• Speed of technology transfer
• Rates of obsolescence
• Internet
• Information technology

We always need to prepare for dynamism in technology area. Communication is another important factor to consider in global market with teams at various global locations world wide.

Reference

How to Prepare a Marketing Environmental Analysis , retrieved on 19- Aug from eHow.com, ehow.com/how_5001707_prepare-marketing-environmental-analysis.html#ixzz0x7GEUQd4

Marketing Environment retrieved on 19- Aug from Marketing Teacher, marketingteacher.com/lesson-store/lesson-marketing-environment.html

Evaluating Financial Information- White Paper

Table of Contents

Step 1: Objectives of the analysis

· Who are we?

· Who is Oxford Industries, Inc.?

· Why do they need the funds?

· What are the main goals for Oxford Industries, Inc.?

Step 2: The firm’s industry

· The Global Economy vs. The U.S. Economy

Step 3: Knowledge of firm and quality of management

· How well does the firm seem to be run?

· Are they taking advantage of opportunity?

· Are they innovative, forward thinking, etc.?

Step 4a: Evaluation of financial statements

Step 4b: Oxford Industry: View from Global Bank Inc

Step 5: Summary

References

Step 1: Objectives of the analysis

Who are we?

We are creditors for Global Bank, Inc., and we are responding to the request of Oxford Industries, Inc., for a very large investment loan. So, in order to make an informed decision as to whether or not it would be in our best interest to grant them the loan, we took the time to evaluate their company, and their financial standings, and we are here to report to you our findings.

Who is Oxford Industries, Inc.?

Oxford Industries, Inc. is an international apparel design, sourcing, and manufacturing company that was founded in 1942 and is based out of Atlanta, Georgia with over 4,800 employees worldwide. Their net sales for the fiscal year, 2007 was $1,128,907 and as an international apparel design company, they sale their apparel designs both domestically and internationally. As a sourcing and manufacturing company, Oxford Industries, Inc., uses third party buying agents that are located in Hong Kong to manage the production and sourcing of its leading product line, Tommy Bahama and, its global product line, Ben Sherman. They also have a third party buying agent in Europe, and other locations, but their concentration for manufacturing is located in Asia.

According to their website, Oxford Industries, Incorporated “…distribute(s) their products through several wholesale distribution channels including national chains, department stores, mass merchants, specialty stores, specialty catalog retailers and Internet retailers.” Their company is comprised of four distinct life style clothing brands: Tommy Bahama, Ben Sherman, Lanier Clothes, and Oxford Apparel. A few brief details about each are:

1. Tommy Bahama is a line of clothing that embraces an elegant tropical paradise feel and targets consumers, both men and women 35 years and older, who “…embrace a relaxed and casual approach to daily living” and have high amounts of income at their disposal and stable fashion preferences. The Tommy Bahama apparel consists of fabrics made of silk, linen, tencel, cotton, or blends which include a combination of one or more of these fiber types.

2. Ben Sherman is an “edgy” lifestyle brand that was acquired in 2004 and consists of apparel and footwear that targets youthful-thinking men and women between the ages of 19 to 35. Its operations are headquartered in London, England. The Ben Sherman apparel line is made from several fabric types including cotton, wool or other natural fibers, synthetics, or a combination of any one of these fabric types and with over 90 suppliers worldwide, the Ben Sherman products are produced on an order-by-order basis. Products are sold via Internet, certain department stores, a variety of independent specialty stores, and Ben Sherman retail stores.

3. Lanier Clothes consists of branded and private labeled apparel for men. The Lanier Clothes products are sold under trademarks that include: Nautica, Kenneth Cole, Dockers, Oscar de la Renta, O Oscar, and Geoffrey Beene, which are licensed to Oxford Industries, Inc., through third parties. The Lanier Clothes products are sold nationally throughout the United States by some of the largest retailers including: Macy’s, JCPenney’s, Sears, Men’s Wearhouse and Nordstrom. The product line is manufactured from a variety of fibers including wool, silk, bamboo, linen, cotton, and other natural fibers, along with synthetics, and a blend of these materials.

4. Oxford Apparel products are designed at the Oxford Apparel offices located in New York. They are designed for consumers of many tastes. The product line consists of branded and private labeled clothing ranging from dress shirts, suited separates, sport shirts, dress slacks, casual slacks to outerwear, sweaters, jeans, swimwear, westernwear, and golf apparel. Oxford Apparel is sold through some of the largest retailers in the United States including: Sears, Men’s Wearhouse, Costco, Walmart, and Macy’s. These five retailers represented 50% of the net sales of Oxford Apparel for the fiscal year, 2007. Oxford Apparel is manufactured from fibers including cotton, linen, wool, silk and other natural fibers, synthetics, and a blend of these materials.

Why do they need the funds?

Oxford Industries, Inc., is interested in borrowing funds from Global Bank, Inc., in order to create new lines for expansion that will appeal to customers on a global scale and increase their customer base both inside and outside of the U.S. Happy with the success from 2007 where they transformed themselves from being a “predominantly private label manufacturer into a lifestyle brand marketer,” Oxford believes that their best growth opportunities are yet to come. So, this is why they are interested in borrowing funds, through an investment loan, from Global Bank, Inc., in order to expand.

With the money, they are anticipating, for the fiscal year, 2008, to open an additional five to ten Tommy Bahama retail stores. They are estimating that each store will cost approximately $1.1 – $5.9 million to build. They also plan to launch the ecommerce of their Tommy Bahama products on their tommybahama.com website so products can be sold directly from the Internet. Just as well, during fiscal year, 2008, Oxford Industries, Inc., is expecting to open five additional stores for the Ben Sherman brand. And, they are estimating that each retail store will cost $0.7 million to build.

What are the main goals for Oxford Industries, Inc.?

The main goals for Oxford Industries, Inc. are:

– To develop a strong, loyal customer base. They believe that if their products can create an emotional connection with their target customers, it will draw them to purchase their life style brands therefore, resulting in higher profits.

–“Create new value for [their] customers and shareholders alike” by continuing to refocus their efforts in those areas that meet their criteria for generating profits and long-term growth.

– Streamline their focuses in order to improve their fiscal performance for 2008so they can have strong returns on their invested capital.

Step 2: Study the firm’s industry

The primary industry which Oxford operates in is the fashion apparel industry where it is very fragmented and competitive, both domestically and internationally. Currently, there is no one single apparel firm dominating the industry, either domestically or internationally. However, at this time, consumers seem to be favoring foreign-based retailers a little more than American retailers, not just because of the failing U.S. economy which has caused U.S. sales to decline but, because consumers are desiring trendy and fresh apparel that is affordable and made with quality as opposed to boring and predictable apparel. Right now, foreign-based apparel retailers have what consumer’s tastes and preferences are demanding versus what American retailers are offering. Therefore, “as a result, most of the fashion apparel store growth in 2008 will come from international firms, especially chains that focus on affordable prices and rapidly changing inventories” (www.printthis.clickability.com).

· The Global Economy vs. The U.S. Economy:

“Prior to globalization, the United States dominated the global economy” however, due to the rise of industrialization and technology, the U.S. share of the global economy has now shrunk to approximately 25% (www.en.wikipedia.org). So, of course, what happens with the U.S. economy affects the global economy but not as much as times past.

Now, thanks to the Internet, apparel retailing through ecommerce is on the rise and, at the same time, countries such as China, Turkey, and the European Union are also enjoying gains in the apparel and textile industry.

Still, most consumers spending are strongly influenced by the “overall economic conditions that affect [both the United States and the rest of the world. So, domestically and internationally, the global economy, as well as, the U.S. economy both have an impact on]…employment levels, energy costs, interest rates, tax rates, personal debt levels and stock market volatility” however, in regards to U.S. manufacturers, their products continue to suffer a long period of decline versus the gains that are being made with foreign-based manufactures (www.oxfordinc.com).

With that said, a number of economists fear that the U.S. economy has been on the verge of its first recession since 2001 [due to]…the housing market’s collapse, a credit crisis, and galloping energy prices [that] are crimping spending and investing (www.iht.com). Also, according to Joseph Stiglitz, a noble-winning economist, he says that “the Iraq war has [also] contributed to the U.S. economic slowdown and is impeding an economic recovery” (Trotta, D.).

To acknowledge the economies downturn, in a recent press release dated February 6, 2008, J. Hicks Lanier, the Chairman and CEO of Oxford Industries, Inc., said,

“We expect that the current economic issues, both in the United States and the rest of the world, will continue to impact our business at wholesale and retail [and, even though] over the years we have seen our share of economic downturns [,] we are confident that our team is well prepared to weather this environment through conservative planning and careful, prudent inventory management.”

Step 3: Develop knowledge of firm and quality of management

· How well does the firm seem to be run?

· Are they taking advantage of opportunity?

· Are they innovative, forward thinking, etc.?

The senior management and Board of Directors at Oxford Inc. are filled with experienced business men in the clothing and retailing industries. Led by J. Hicks Lanier, Chairman of the Board and CEO, the Oxford team has diversified their holdings to fill high end niche markets taking advantage of current trends and strategic acquisitions.

CEO since 1981, Mr. Lanier was also President of the company since 1977 and serves on the board of several other companies. Under his guidance, Oxford Inc acquired Viewpoint International Inc, owner of the Tommy Bahamas clothing line, in 2003 which has become core to the operations and profitability of the company. Showing great foresight into that high end market, Oxford has seen a year over year increase in revenue and of 13.7%.

The company has also created a solid set of operating principles which hinge on, according to their website (http://www.oxfordinc.com/AU_SO.asp), “compelling, high value added products” and “customer driven service”. I believe that they have a core transformation strategy which will inevitably move their company away from being a private label manufacturer to becoming a lifestyle brand marketer. This is mostly customer driven as their lifestyle brands have been their greatest source of growth over the last several years. Their lifestyle brands, both Tommy Bahama and Ben Sherman, have grown with increased distribution through third party high end retailers like Macy’s and Nordstrom in the United States. Meanwhile, their private label brands like Oxford shirts and Lanier clothing has helped to stabilize profits during this transition and continue to perform steadily in the face of increased pressure from ongoing consolidation in the retail industry.

Growth had also been seen in the wholesale distribution category by creating compelling sub brands to fill gaps in their target market. Including, see chart below, footwear, furnishings, tailored clothes, and sportswear. Oxford and its leaders have also created a diversified business model allowing multiple revenue streams and multiple distribution channels. This will help build in revenue assurance in the long run as a diversified portfolio can lead to greater growth and stability over time as the company can take advantage of certain strategic alliances and develop quicker in identified growth segments.

One strategy that seems to work well for them is the diversification of operations based on brand and product its customer segments. They not only manage and manufacture their own products, but they also manufacture goods under other brands that they do not directly manage. This helps cut back office operations cost and still keep profits rolling in; especially with the high end brands they sell. Their strategic acquisition or 3 smaller companies (Tommy Bahama 2003, Ben Sherman 2004, Womenswear group 2006) has led to growth in retail and margin on products. One specific strategic shift they took advantage of was closure of manufacturing plants in Latin America leaning more heavily on 3rd parties manufacturing lessening the impact of breakage and other cost associated with manufacturing of goods. This has led them to decrease their COGS from 61.1% in 2006 to 60.3% in 2007 in turn helping their gross profits.

Step 4a: Evaluation of financial statements:

 

Oxford Industries Inc. Ratio Analysis Fiscal Years ended June 01 2007, June 02 2006, & June 03 2005
			6/1/2007	6/2/2006	6/3/2005
			—————–	—————–	—————–
Overall Performance Measures:
	Price/earnings ratio		15.59	10.36	14.06
	Return on assets		7.36%	9.83%	7.62%
	Return on invested capital		8.73%	12.34%	9.96%
	Return on shareholders’ equity		11.56%	17.68%	16.42%
Profitability Measures:
	Gross Margin percentage		39.66%	38.92%	33.36%
	Profit margin		4.62%	6.35%	3.79%
	Earnings per share (net) (basic)		$2.95	$4.03	$2.97
	Cash realization		1.69	1.44	1.04
Investment Utilization:
	Asset turnover		1.24	1.25	1.45
	Invested capital turnover		1.47	1.57	1.89
	Equity turnover		2.50	2.78	4.33
	Capital intensity		12.93	15.06	20.19
	Days’ cash		12.73	3.78	1.91
	Days’ receivables		44.63	46.83	54.76
	Days’ inventory		73.59	66.59	70.59
	Inventory turnover		4.96	5.48	5.17
	Working capital turnover		5.89	6.26	7.26
	Current ratio		2.35	1.98	1.85
	Quick ratio		1.23	0.85	0.96
Financial Condition:
	Financial leverage		2.02	2.22	2.98
	Debt/equity		101.52%	122.12%	198.48%
	Debt/capitalization		41.15%	43.47%	56.23%
	Times interest earned		4.54	4.09	3.59
	Cash flow/debt		44.12%	50.68%	17.86%
Dividend Policy:
	Dividend yield		1.44%	1.36%	1.22%
	Dividend payout		22.52%	14.05%	17.09%

Oxford Industries Inc. Ratio Analysis Fiscal Years ended June 01 2007, June 02 2006, & June 03 2005
			6/1/2007	6/2/2006	6/3/2005
			—————–	—————–	—————–
Actual numbers used for ratio calculation:
(in thousands, except per share amounts)
	Market price per share		$45.98	$41.77	$41.75
	Dividends per common share		$0.66	$0.57	$0.51
	Net earnings		$52,137	$70,471	$49,827
	Interest expense, net		$22,214	$23,971	$29,147
	Tax rate		33.46%	30.94%	34.07%
	Total assets		$908,738	$885,595	$905,877
	Net income + Int (1 – Tax rate)		$66,918	$87,025	$69,044
	Long-term liabilities		$315,349	$306,575	$389,927
	Total shareholders’ equity		$450,945	$398,701	$303,501
	Total current liabilities		$142,444	$180,319	$212,449
	Total invested capital		$766,294	$705,276	$693,428
	Net sales		$1,128,907	$1,109,116	$1,313,609
	Cost of goods sold		$681,147	$677,429	$875,355
	Gross profit		$447,760	$431,687	$438,254
	Cash from operations (incl. discontinued)		$87,922	$101,372	$51,637
	Property, plant, and equipment (net)		$87,323	$73,663	$65,051
	Total expenses		$1,076,770	$1,038,645	$1,263,782
	Total non-cash expenses		$19,517	$26,553	$22,242
	Total cash expenses		$1,057,253	$1,012,092	$1,241,540
	Cash and cash equivalents		$36,882	$10,479	$6,499
	Accounts receivable		$138,035	$142,297	$197,094
	Inventory		$137,333	$123,594	$169,296
	Total current assets		$334,241	$357,581	$393,395
	Working capital		$191,797	$177,262	$180,946
	Monetary current assets		$174,917	$152,776	$203,593
	Operating income		$100,847	$98,116	$104,727
	Long-term debt		$199,294	$200,023	$289,123
	Dividends		$11,741	$9,899	$8,515

(http://w3.lexisnexis.com.proxy.cityu.edu/dossier/companyreporting/contentfs.do? prod=CD&host=Rosetta_US_Academic&cdcomp=6_T95038097&reportKey=financial_report)

(http://quicktake.morningstar.com/StockNet/StockReturns.aspx?Country=USA&Symbol=OXM)

Oxford Industries Inc. Common-size Balance Sheet Fiscal Years ended June 01 2007, June 02 2006, & June 03 2005
			6/1/2007	6/2/2006	6/3/2005
Assets:		—————–	—————–	—————–
	Cash and Equivalents		4.06%	1.18%	0.72%
	Marketable Securities		0.00%	0.00%	0.00%
	Inventories		15.11%	13.96%	18.69%
	Other Current Assets		2.42%	9.17%	2.26%
	Total Current Assets		36.78%	40.38%	43.43%
	PP&E		19.71%	17.96%	16.69%
	Accumulated Depreciation & Depletion		10.10%	9.65%	9.50%
	Net PP&E		9.61%	8.32%	7.18%
	Intangibles		25.76%	26.47%	46.74%
	Other Non-Current Assets		3.37%	2.33%	2.65%
	Total Non-Current Assets		63.22%	59.62%	56.57%
	Total Assets		100.00%	100.00%	100.00%
	Inventory Valuation Method		LIFO	LIFO	LIFO
Liabilities:		—————–	—————–	—————–
	Accounts Payable		9.29%	11.86%	11.70%
	Short Term Debt		0.04%	0.01%	0.38%
	Other Current Liabilities		3.46%	5.46%	4.54%
	Total Current Liabilities		15.67%	20.36%	23.45%
	Long Term Debt		21.93%	22.59%	31.92%
	Deferred Income Taxes		8.27%	8.65%	8.53%
	Other Non-Current Liabilities		4.51%	3.39%	2.60%
	Minority Interest		0.00%	0.00%	0.00%
	Total Non-Current Liabilities		34.70%	34.62%	43.04%
	Total Liabilities		50.38%	54.98%	66.50%
Equity:		—————–	—————–	—————–
	Preferred Stock Equity		0.00%	0.00%	0.00%
	Common Stock Equity		49.62%	45.02%	33.50%
	Common Par		1.96%	1.99%	1.86%
	Additional Paid in Capital		8.98%	8.45%	5.07%
	Retained Earnings		37.57%	33.99%	26.54%
	Treasury Stock		0.00%	0.00%	0.00%
	Other Equity Adjustments		1.11%	0.60%	0.03%
	Total Capitalization		71.55%	67.61%	65.42%
	Total Equity		49.62%	45.02%	33.50%
	Total Liabilities & Stock Equity		100.00%	100.00%	100.00%
	Cash Flow		8.55%	10.80%	8.47%
	Working Capital		21.11%	20.02%	19.97%
	Free Cash Flow		3.19%	6.25%	-12.76%
	Invested Capital		71.55%	67.61%	65.42%

Oxford Industries Inc. Common-size Income Statement Fiscal Years ended June 01 2007, June 02 2006, & June 03 2005
			6/1/2007	6/2/2006	6/3/2005
Income Statement:		—————–	—————–	—————–
	Operating Revenue (Revenue/Sales)		100.00%	100.00%	100.00%
	Cost of Sales		60.34%	61.08%	66.64%
	Gross Operating Profit		41.36%	40.50%	34.73%
	Research & Development		0.00%	0.00%	0.00%
	Selling, Gen. & Administrative Expense		31.62%	30.57%	25.62%
	Operating Income b/f Depreciation (EBITDA)		8.90%	8.85%	7.97%
	Interest Income		0.00%	0.00%	0.00%
	Other Income, Net		1.46%	1.19%	0.92%
	Special Income/Charges		0.00%	0.00%	0.00%
	Total Income Avail for Interest Expense (EBIT)		8.93%	8.85%	7.97%
	Interest Expense		1.97%	2.16%	2.22%
	Pre-tax Income (EBT)		6.97%	6.69%	5.75%
	Income Taxes		2.33%	2.07%	1.96%
	Minority Interest		0.00%	0.00%	0.00%
	Net Income from Continuing Operations		4.63%	4.62%	3.79%
	Net Income from Discontinued Ops.		-0.02%	1.74%	0.00%
	Net Income from Total Operations		4.62%	6.35%	3.79%
	Extraordinary Income/Losses		0.00%	0.00%	0.00%
	Income from Cum. Effect of Acct Chg.		0.00%	0.00%	0.00%
	Income from Tax Loss		0.00%	0.00%	0.00%
	Other Gains (Losses)		0.00%	0.00%	0.00%
	Total Net Income		4.62%	6.35%	3.79%
	Normalized Income		4.63%	4.62%	3.79%
	Preferred Dividends		$0.00	$0.00	$0.00
	Basic EPS from Continuing Ops.		$2.96	$2.93	$2.97
	Basic EPS from Discontinued Ops.		($0.01)	$1.10	$0.00
	Basic EPS from Total Operations		$2.95	$4.03	$2.97
	Basic EPS, Total		$2.95	$4.03	$2.97
	Basic Normalized Net Income/Share		$2.96	$2.93	$2.97
	Diluted EPS fr Continuing Ops.		$2.93	$2.88	$2.87
	Diluted EPS fr Discontinued Ops.		($0.01)	$1.08	$0.00
	Diluted EPS fr Total Ops.		$2.92	$3.96	$2.87
	Diluted EPS, Total		$2.92	$3.96	$2.87
	Diluted Normalized Net Inc/Shr		$2.93	$2.88	$2.87
	Dividends Paid per Share		$0.63	$0.56	$0.38

(http://w3.lexisnexis.com.proxy.cityu.edu/dossier/companyreporting/contentfs.do?prod=CD&host=Rosetta_US_Academic&cdcomp=6_T95038097&reportKey=financial_report)

Step 4b: Oxford Industry: View from Global Bank Inc

 

Apparel (Textile) Industry Analysis & Trends

Most trends affecting the apparel and footwear manufacturers today are driven by consumer demand and relate to the size of the various demographic groups and their particular wants, shopping patterns and spending power. Private equity firms are buying up apparel companies along with that there is consolidation among manufacturers entering new markets and product lines. Demand for apparel remains relatively constant compared with prior years. Because of slow down in US economy, lowering the demand for apparel. According to “Standard & Poor’s” Apparel industry survey dated May 24, 2007; sales of both apparel and footwear in the US are rising; retail sales of apparel rose 5% in 2006 compared to 4% increase in past 3 years. Oxford’s (OXM) Analysis For fiscal year 2008 which ends on January 31, 2009, the Company is projecting net sales of $1.01 billion to $1.06 billion. We expect that the current economic issues, both in the United States and the rest of the world, will continue to impact the business at wholesale and retail. The Company is expecting a decline in first quarter net sales due to number of reasons including economic slowdown, decline in Ben Sherman whole sale, increased marketing spends, additional investments in retails and web sites. Strengths– Oxford provides retailers and consumers with a wide variety of apparel products and services to suit their individual needs. Oxford’s wholesale customers are found in every major channel of distribution, including national chains, specialty catalogs, mass merchants, department stores, specialty stores and Internet retailers. The Company also operates retail, restaurants and Internet websites for some of its brands. Weaknesses– Oxford needs to show a high presence in web market. Oxford needs to continue to improve their sourcing and efficiencies, broaden product offerings, and target unfilled niches through a mix of acquisitions, licensing, and brand extensions to give the healthy competition in the market. Threats- Because the customers are more value conscious and demanding with respect to fashion, apparel firms that sell proprietary labels to growing national chains such as J.C.Penney’s and Kohl’s would be in better position. Mass and national chain channels (J.C. Penney) exhibited the strongest growth at 7.9% and 7.6%, respectively. The luxury apparel sector remains unaffected by economic conditions and firms such as Polo Ralph Lauren will likely benefit from this trend. Oxford industry is mature but has to face high competition in the market. Sales are influenced by customer sentiments and disposable income. Opportunities – Diversifying: The Oxford industry must come up with new designs and product line extensions in order to survive and cope with market competition. Buying into New Markets: Acquiring another company is a way to eliminate current or potential customers, however, in the global economy, Oxford needs to enter into new potential markets. Offshore sourcing: In the ongoing push to cut expenses, Oxford can move their production facilities to low cost markets.

Liquidity- Oxford’s current ratio has increased in the last 3 years, which shows a good sign in terms of liquidity assessment. Oxford’s primary source of revenue and cash flow is its operating activities in the United States. Liquidity requirements arise from the funding of working capital needs, which include inventory, other operating expenses and accounts receivables, funding of capital expenditures, payment of quarterly dividends, repayment of indebtedness and acquisitions. As of June, 2007, the accounts receivables were 17.45% compared to the accounts payable at 9.29% and, cash and cash equivalents increased to $36,882 in 2007 compared to $10.479 in 2006. Profitability– Return of Assets decreased to 7.36% in 2007 from 9.46% in 2006. Similarly Returns of equity went down at 11.56% from 17.68% in 2006. The profit margin declined to 4.62% from 6.35% in 2006 and EPS was reduced from $4.03 in 2006 to $2.95 in 2007. The net profit margin was slightly lower than the industry while revenue growth was at an average that is better than some of Oxford’s top competitors.

Industry (Textile- Apparel) Statistics (03/03/08)

Apparel Industry Oxford Market Capitalization: 38B 340 M Price / Earnings: 21.9 8.14 Price / Book: 5.6 0.81 Net Profit Margin : 4.80% 4.62% Price To Free Cash Flow : 90.4 30.5 Return on Equity: 11.00% 11.10% Total Debt / Equity: 0.9 0.675 Dividend Yield: 1.50% 3.4% Oxford & Apparel Industry leaders comparison   Statistic Industry Leader OXM Market Capitalization VFC 8.34B 339.28M P/E Ratio LULU 106.32 8.14 PEG Ratio OXM 1.68 – Revenue Growth (Qtrly YoY) LULU 83.90% 1.20% EPS Growth (Qtrly YoY) LULU 330.80% 4.90% Long-Term Growth Rate (5 yr) LULU 42.29% 12.50% Return on Equity HBI 70.43% 11.10% Long-Term Debt/Equity HBI 8.089 0.675 Dividend Yield (annual) SGC 5.50% 3.40% LULU- Lululemon Athletica HBI- HanesBrands Inc SGC – Superior Uniform Grp Direct Competitor Comparison
		Oxford (OXM)	HartMarx (HMX)	Van Heusen (PVH)	Polo (RL)	Industry
	Market Cap	339.28M	88.39M	2.06B	6.33B	38B
	# Employees	4,800	3,800	5,600	14,000	160K
	Q Rev Growth (YoY)	1.20%	-7.30%	22.50%	11.00%	14.70%
	Revenue	1.09B	564.87M	2.40B	4.67B	489.03B
	Gross Margin	40.53%	32.00%	49.14%	54.00%	40.11%
	EBITDA (	111.58M	13.15M	348.76M	821.00M	46.00B
	Oper Margins	8.13%	0.62%	12.70%	13.55%	8.13%
	Net Income	46.40M	-4.18M	179.74M	389.50M	10.14B
	EPS	2.597	-0.116	3.118	3.671	0.35
	P/E Ratio	8.14	N/A	11.71	16.94	13.38
	PEG (5 yr exp)	1.68	0.7	0.75	1.18	1.03
	P/S	0.32	0.16	0.9	1.43	0.59

Summary:

In closing, we here at Global Bank, Inc. believe that Oxford Industries, Inc., would be a good investment of our capital. What we have seen in the past is their ability to grow and acquire smaller brands which help stabilize cash flow and allow focus on growth and long term strategy. Oxford has said that the additional money will be used to shore up one of their main weaknesses, lack of a retail presence which will improve distribution. A point of note, as we enter what looks to be a recession, consumers become more price sensitive. This will lead to overall less spending. We do think, however, that Oxford will not lose as much revenue because they do a very good job of showing their product value to a customer. There are also no comparable substitute brands to compete with Tommy Bahama and Ben Sherman. Oxfords debt to equity ratio is almost at 1 and with high liquidity; we see no issue in their repayment of the full loan amount.

References

Bush, central bank chief see US weathering economic storm; recession not on the

horizon. Retrieved March 2, 2008, from

http://www.iht.com/bin/printfriendly.php?id=10564091.

http://www.hoovers.com/oxford-industries/–ID__11133–/free-co-factsheet.xhtml
Retrieved March 4, 2008 – Oxford’s financials.

http://www.lexisnexis.com.proxy.cityu.edu/us/lnacademic/search/companyDossiersubmit

Form.doRetrieved March 3, 2008 – Company Competitors and Market position.

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Ops Management- MPS process for execution- 2

Master Production Schedule Process

The process of Master Scheduling defines what the com­pany plans to produce in specific configurations, models, and items. It specifies the items and quantities that will be manufactured and their schedule dates. These Master Production Schedules drive the material plans that provide answers to the questions of what, how much and when components, subassemblies, and raw materials should be made available. Material Requirements Planning drives the Capacity Requirements Planning function which com­pares work center loads to the availability of equipment and personnel.

The master production scheduling process translates a business plan into a dynamic and comprehensive product manufacturing schedule. It helps balance and integrates the needs of marketing, manufacturing and finance with customers.

By using several variables as inputs the MPS generates a set of outputs used for decision making. Inputs may include forecast demand, production costs, inventory costs, customer orders, inventory levels, supply, lot size, production lead time, and capacity. Inputs may be automatically generated by an ERP system that links a sales department with a production department. Outputs may include amounts to be produced, staffing levels, quantity available to promise, and projected available balance. Outputs may also be used to create a Material Requirements Planning (MRP) schedule.

An effective MPS ultimately will:

· Give production, planning, purchasing, and top management the information needed to plan and control the manufacturing operation

· Demonstrate overall business planning and forecasting to detail operations

· Enable marketing to make legitimate delivery commitments to warehouses and customers

Attributes of Effective Master Scheduling

· Simplify execution of the strat­egies of the enterprise

· Consider all the demands from internal and external customers

· Stabilize the detail plans through managing schedule changes

· Be a feasible schedule by directly addressing business con­straints and manufacturing bottlenecks. These attributes relate to the strategic, inclusiveness, stability and feasibil­ity of the Master Schedule.

MPS Tools
Master scheduling requires ongoing analysis, measurement and adjustment to achieve revenue goals and to allocate material and resources profitably. MPS gives a set of powerful tools for resource planning and scheduling, analysis and performance measurement.

· Multiple scheduling cycles

· Concurrent MPS planning views

· Cycle options and policies consistent with MRP controls

· Choice of current or simulated data for what-if analysis

· Multi-level pegging

· Master schedule items at any level

· Independent and dependent demand items

· Spares item scheduling

· Time fence control at item level

· Computer planned orders

· Selectable Computer-Planned Order (CPO) conversions

· Generation of purchase requisitions and purchase orders

· Integrated with Projects

· Honors multi-level material planning

· Creation of manufacturing orders

· Activity planned down to time of day

Master Scheduler Job Functions/ Responsibilities

Master Scheduler is the link between marketing, distribution, engineering, manufacturing, and planning. The tasks of the master scheduler include the following:

· Develop and maintain the master finished goods production schedule for all manufacturing operations to match customer demand (orders and forecast) with available resources while achieving inventory and cost objectives.

· Conduct monthly rough-cut capacity planning to ensure that the forecast can be fulfilled within the available time.

· Measure, track and drive continuous improvement related to schedule adherence, inventory and manufacturing cycle time.

· Balance production and inventory levels with demand to support target

· Provide the Sales & Operations Planning process with a master schedule that meets our customer requirements.  Highlight specific risks and opportunities within the supply chain, which could impact the cost or service levels expected by the plan.

· Propose changes, maintain and communicate the Master Scheduling policy as required.  Highlight any required deviations driven by the S&OP process.

· Identify and resolve imbalances between demand and supply.

· Provide delivery promise dates for incoming orders; match actual requirements with the master schedule as they materialize

· Evaluate the impact of top-down inputs, such as a request for the introduction of a new product in much less than the normal delivery time

· Evaluate the impact of bottom-up inputs, such as anticipated delay reports from the shop or purchasing indicating that particular components will not be available as scheduled or that planned production rates are not being attained

· Revise the master schedule when necessary because of lack of material or lack of capacity

Master Scheduler’s Principle Relationships

Inside the Company –

· Manufacturing and Warehouse/Shipping Managers;

· Plant management and staff;

· Marketing, Sales Managers,

· Purchasing Managers and Buyers,

· Finance

· IT

International Affiliates (Depending on the organization)–

· Supply Chain Managers

· Production Planners and Buyers

· Production Managers

· Distribution Managers

Outside the Company –

· Production Coordinators at packaging subcontractors

· Sales Representatives

· Communication with customers (minor)

· Supervision – Production Schedulers (where applicable)

Appendix (A)MPS Attributes, Purpose & Relationship Strategic: Master Scheduling is the key function that should convert the strategies of the Master Plan into the detail working plans to produce products, ship customer orders, and make money for the corporation. The strategic implications of the Master Production Schedule involve converting aggregate plans and general policies into spe­cific rules and guidelines. The mission, strategies, and objectives of the business plan are converted to action items through the Master Production Scheduling process. Demand Planning includes market, customer, and com­petitive strategies that translate into processing customer orders and detail forecasting of new business at the product level. In many Make-To-Stock companies, a multiple warehouse distribution system may be generating the detail demands that drive the Master Production Schedule. The Production Plan reflects the planned inventory levels and the anticipated rate of sales and production by product lines. The strategies behind these plans need to be carried out as schedules for specific items. An example is the application of Safety Stock. A Master Plan may call for a 98% customer service level but it’s up to the master scheduler to figure out how much finished goods on a specific item will be needed to meet the objective. The Demand Planning and Production Planning processes come together as a Sales/Operations Plan that will be addressed in more detail later.
Planner’s Workbench -Provides the means for consolidating all planning and scheduling functions onto one easy-to-use screen. Performance Measurement- MPS can give you an on-line “snapshot” estimation of the profit or loss that your build plan will yield. Forecast Demand · Automatic generation of repeating forecast based on quantities, intervals, and dates · Item forecasts generated from planning bills by locations · Forecasts optionally consumed by bookings · Forecast maintenance Rough-Cut Capacity Planning · Current or simulated analysis of critical resources and capacities · Based on representative routings Sample Inquiries and Reports · MPS planning by item · Available-to-promise · Critical path lead time Issues in MPS · Width of the time bucket · Planning horizon · Rolling Plan · Time fencing/ Schedule freezing. Designing, Creating, & Managing the Master Schedule Master scheduling activities take place in three stages: · Designing the MS · Creating the MS · Controlling the MS Designing the MS · Select the items; that is, select the levels in the BOM structure to be represented by the items scheduled (both components and final assemblies may be included). · Organize the MS by product groups. · Determine the planning horizon, the time fences, and the related operational guides. · Select the method for calculating and presenting the available-to-promise (ATP) information. Creating the MS includes the following steps · Obtain the necessary informational inputs, including the forecast, the backlog (customer commitments), and the inventory on hand. · Prepare the initial draft of the master production schedule (MPS). · Develop the rough cut capacity requirements plan (RCCR’). · If required, increase capacity or revise the initial draft of the MPS to obtain a feasible schedule. Controlling the MS includes the following activities · Track actual production and compare it to planned production to deter­mine if the planned MPS quantities and delivery promises are being met. · Calculate the available-to-promise to determine if an incoming order can be promised in a specific period. · Calculate the projected on hand to determine if planned production is sufficient to fill expected future orders. · Use the results of the preceding activities to determine if the MPS or capacity should be revised. Appendix (B)

Career Overview and Job Description Master scheduler organize the resources and services necessary to producing goods each year. Managerial duties vary by plant, but many major responsibilities are nearly the same for all industrial production managers, including production scheduling, staffing, procuring and maintaining equipment, overseeing quality and inventory control, and coordinating production activities among departments. Master Scheduler (Sometimes referred as Master Planner or more generically production manager) have numerous responsibilities, but their primary function is to lay out the production schedule so that production quotas are met but financial and time constraints are respected. These managers use mathematical formulas, ERP software and other means to analyze and coordinate the plant’s personnel and capital resources. They decide which machines to use, what new machines, if any, need to be purchased, whether overtime or extra shifts will be required, and what the sequence of production will be. Once the production run commences, they monitor it to ensure that it stays on schedule and to fix any complications that may arise. Because many departments work on the same projects, master schedulers regularly consult with other departments to prepare and execute company goals, guidelines, and operations. For example, the production manager and the procurement department collaborate to maintain optimal levels of plant inventories. This type of cooperation is essential to a company’s efficient operation; maintaining adequate production supplies taxes a company’s financial resources, but an inadequate inventory will impair production. Communication problems between the production manager and the purchasing department can further slow down production, which in turn throws off production schedules. Just-in-time production techniques, which have proved to be very efficient because they reduce inventory levels, make regular interdepartmental communication even more important. Computers, with their ability to provide constant updates on inventory, the status of work in progress, and quality standards, are central to such coordination. Master Scheduler Job requirement and Employment Opportunities Through 2012, the employment rate for industrial production managers is forecasted to grow more slowly than the average for all occupations. The need to replace workers who change occupations or leave the labor force will create a number of job openings. Job prospects will be brightest for candidates with a college degree in management, industrial engineering, or business administration, and especially for applicants with an undergraduate degree in engineering and a master’s degree in business administration or industrial management. Employers will be most interested in qualified candidates who have outstanding communication skills, who work well in teams, and who want to enhance their knowledge and abilities through continuing training. Despite projections of increased manufacturing output, employment growth for industrial production Managers will be limited by improvements in production efficiency among industrial production managers and their workers. Productivity advancements among managers will result from the expanding use of computers by these managers and their companies. Productivity advancements among workers will translate into fewer workers and less need for supervision. Moreover, the growing importance of producing quality products has shifted some of the production manager’s oversight duties to supervisors and workers on the production line. Production managers are essential to the efficient operation of a plant. The practical implications of this condition are twofold: while production managers have avoided heavy casualties from recent efforts to flatten management structures, they have had to expand their responsibilities. As a result, fewer job opportunities are created.

Master Schedulers Detailed Duties & Responsibilities· Update the 18-month master production schedule for the Americas finished goods weekly. · Coordinate supply of finished goods, assembled components and parts to intercompany and distribution centers.  Schedule requirements using SAP Production Planning Module.  Correspond with manufacturing plants, and international affiliates concerning requirements. · Achieve target customer service levels and inventory turn levels based on forecast error and bias trends, manufacturing capacity/flexibility and customer service and inventory turn goals.  Review monthly. · Review monthly sales forecasts provided by the Demand Manager.  Monitory monthly feed of sales forecasts. · Use Capacity Planning tools to determine if production will be constrained in future periods; load level production plan, and identify potential corrective actions such as: working overtime, adding equipment, outsourcing or expediting. · Exercise project leadership for new computer based systems, in both selection and implementation processes.  Using software vendor and other users as sources, learn operation of such system(s).  Coordinate pilot testing.  Conduct training programs for other users in department. · Review New Product introductions, and Promotion Calendar to ensure that Supply Chain can support all program requirements. · Monitors the Distribution Requirement Plan (STO), and assign priorities based on customer needs and production availability. · Provide Purchasing with requisitions and vendor schedules. · Issues monthly update of quarter-end inventory investment and turn projections for finished goods.  Provide unit and dollar value figures along with analysis of significant changes. · Issues actual versus scheduled production metrics weekly and ensure that 95% compliance to schedule is achievable. (Schedule Compliance Metric) · Present summary of key information at weekly Management Production meeting. · Work closely with Marketing and Demand Manager to plan and execute special and regional promotions. · Participate in meetings, and keep up to date on issues related to Sales Forecast, Manufacturing, Planning, New Product introductions, Line Fill Rates, Metrics, and other related Supply Chain issues. · Resolve issues by presenting various alternatives for decision at monthly S&OP meetings. · Advise Distribution Planner regarding production schedule adjustments and special distribution requirements. · Identify materials with no further use, recommend disposition. · Coordinate production of assigned subcontractor(s) and movements of materials/product to/from this subcontractor(s). Appendix (C) Master Production Schedule, retrieved September 10, 2009, from master-production-schedule.com/ Inventory Solutions, retrieved September 11, 2009, from inventorysolutions.org/def_mps.htm ERP Resource, retrieved September 12, 2009, from eresourceerp.com/Master-Production-Schedule.html ERP Software benefits retrieved September 10, 2009, from vai.net/software-products/manufacturing-software/master-production-schedule-software.html Master Production Scheduling , retrieved September 9, 2009 from glovia.com/solutions/master_production_scheduling.aspx Career in Supply Chain, retrieved September 11, 2009, from careersinsupplychain.org/job-roles-profiles/Descrpt/MstProd.asp Wikipedia, retrieved September 11, 2009, from wikipedia.org/wiki/Master_Production_Schedule Master Scheduling, retrieved September 12, 2009 from, mcts.com/Master-Scheduling.html MPS Solutions, retrieved September 12, 2009 from http://www.gsinnovate.com/solution/oneSheets MPS White Papers, retrieved September 12, 2009 from coba.utpa.edu MPS benefits, retrieved September 12, 2009 from soulcast.com/post/show/236330/Benefits-of-using-Master-Production-Schedule-module

 

Operations Management: Master Production Scheduling -1

Scheduling is an important tool for manufacturing and engineering, where it can have a major impact on the productivity of a process. In manufacturing, the purpose of scheduling is to minimize the production time and costs, by telling a production facility what to make, when, with which resource, and on which equipment. Production scheduling aims to maximize the efficiency of the operation and reduce costs.

Production scheduling provides scheduler with powerful graphical interfaces which can be used to visually optimize real-time workloads in various stages of production, and pattern recognition allows the software to automatically create scheduling opportunities which might not be apparent without this view into the data.

For example, an airline might wish to minimize the number of airport gates required for its aircraft, in order to reduce costs, and scheduling software can allow the planners to see how this can be done, by analyzing time tables, aircraft usage, or the flow of passengers.

 

Master Production Schedule (MPS): An Overview

A Master Production Schedule (MPS) is a plan for production, staffing, inventory and resources. It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded. This plan quantifies significant processes, parts, and other resources in order to optimize production, to identify bottlenecks, and to anticipate needs and completed goods.

Master Production Scheduler’s schedules every possible aspect of production such as forecast demand, production costs, inventory costs, lead time, working hours, capacity, inventory levels, available storage, and parts supply. The MPS is a statement of what the company expects to produce and purchase (i.e. quantity to be produced, staffing levels, dates, available to promise and projected balance).

The MPS translates the business plan, including forecast demand, into a production plan using planned orders in a true multi-level optional component scheduling environment. Using MPS helps avoid shortages, costly expediting, last minute scheduling, and inefficient allocation of resources. Working with MPS allows businesses to consolidate planned parts, produce master schedules and forecasts for any level of the Bill of Material (BOM) for any type of part.

Scheduling Types

Companies use backward and forward scheduling to allocate plant and machinery resources, plan human resources, plan production processes and purchase materials.

Forward scheduling is planning the tasks from the date resources become available to determine the shipping date or the due date.

Backward scheduling is planning the tasks from the due date or required-by date to determine the start date and/or any changes in capacity required.

 

MPS Purpose & Relationship

The Master Schedule’s primary pur­pose is to translate the strategic initiatives of top manage­ment into workable day-to-day actions that result in mak­ing and shipping products to customers, providing service and earning their satisfaction. MPS relationships between three important pro­cesses: Master Planning, Detail Planning and Planning Execution. Supporting these three processes is the Infor­mation System represented by the Bills of Material, Inven­tory, Process/Routings and other important data bases. Holding all these processes together are the linkages and feedback loops that show how information flows between each functional area. The gauge for finding out the effec­tiveness of the total process is Performance Measurement.

· Master Production Schedule Planning (MPS)

· Material Resource Planning (MRP)

· Capacity Requirements Planning (CRP)

Master scheduling (MS) calculates the quantity required to meet demand requirements from all sources. Material requirements planning (MRP) is used to calculate the quantity required. The MS enables marketing to make legitimate delivery commitments to field warehouses and final customers. It enables production to evaluate capacity requirements in a more detailed manner. It also provides the necessary information for production and marketing to agree on a course of action when customer requests cannot be met by normal capacity. Finally, it provides to management the opportunity to ascertain whether the business plan and its strategic objectives will be achieved.

Benefits of MPS  · Production plan with resource, schedule and available inventory (It all starts with what do we want to make, when do we want to make, what does it take to make it, What we have got) · Increased visibility and operational control · Process change-over reduction · Translates a business plan with forecasted demand · Inventory reduction, leveling · Reduced production bottlenecks and idle equipment – Reduce manual and inconsistent scheduling efforts at each production level · Increase production efficiency- Increased resource utilization and lowered manufacturing costs · Labor load leveling · Accurate delivery date quotes – Improved on-time delivery performance · Real time information

   Contd in part 2 for MPS process and operations management 

Balanced Scorecard Contd. (3)- Implementing BSC

Contd from BSC (2)

Implementing Balanced Scorecard

Implementing Balanced Scorecards typically includes four processes:

1. Translating the vision into operational goals;
2. Communicating the vision and link it to individual performance;
3. Business planning; index Setting
4. Feedback and learning, and adjusting the strategy accordingly.

The Balanced Scorecard is a framework, or what can be best characterized as a “strategic management system” that claims to incorporate all quantitative and abstract measures of true importance to the enterprise. According to Kaplan and Norton, “The Balanced Scorecard provides managers with the instrumentation they need to navigate to future competitive success”.

Many books and articles referring to Balanced Scorecards confuse the design process elements and the Balanced Scorecard itself. In particular, it is common for people to refer to a “strategic linkage model” or “strategy map” as being a Balanced Scorecard.

Although it helps focus managers’ attention on strategic issues and the management of the implementation of strategy, it is important to remember that the Balanced Scorecard itself has no role in the formation of strategy. In fact, Balanced Scorecards can comfortably co-exist with strategic planning systems and other tools.

Step one of the scorecard building process starts with an assessment of the organization’s Mission and Vision, challenges (pains), enablers, and values. Step One also includes preparing a change management plan for the organization, and conducting a focused communications workshop to identify key messages, media outlets, timing, and messengers.

In Step Two, elements of the organization’s strategy, including Strategic Results, Strategic Themes, and Perspectives, are developed by workshop participants to focus attention on customer needs and the organization’s value proposition.

In Step Three, the strategic elements developed in Steps one and two are decomposed into Strategic Objectives, which are the basic building blocks of strategy and define the organization’s strategic intent. Objectives are first initiated and categorized on the Strategic Theme level, categorized by Perspective, linked in cause-effect linkages (Strategy Maps) for each Strategic Theme, and then later merged together to produce one set of Strategic Objectives for the entire organization.

In Step Four, the cause and effect linkages between the enterprise-wide Strategic Objectives are formalized in an enterprise-wide Strategy Map. The previously constructed theme Strategy Maps are merged into an overall enterprise-wide Strategy Map that shows how the organization creates value for its customers and stakeholders.

In Step Five, Performance Measures are developed for each of the enterprise-wide Strategic Objectives. Leading and lagging measures are identified, expected targets and thresholds are established, and baseline and benchmarking data is developed.

In Step Six, Strategic Initiatives are developed that support the Strategic Objectives. To build accountability throughout the organization, ownership of Performance Measures and Strategic Initiatives is assigned to the appropriate staff and documented in data definition tables.

In Step Seven, the implementation process begins by applying performance measurement software to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information. In short, automation helps people make better decisions because it offers quick access to actual performance data.

In Step Eight, the enterprise-level scorecard is ‘cascaded’ down into business and support unit scorecards, meaning the organizational level scorecard (the first Tier) is translated into business unit or support unit scorecards (the second Tier) and then later to team and individual scorecards (the third Tier). Cascading translates high-level strategy into lower-level objectives, measures, and operational details. Cascading is the key to organization alignment around strategy. Team and individual scorecards link day-to-day work with department goals and corporate vision. Cascading is the key to organization alignment around strategy. Performance measures are developed for all objectives at all organization levels. As the scorecard management system is cascaded down through the organization, objectives become more operational and tactical, as do the performance measures. Accountability follows the objectives and measures, as ownership is defined at each level. An emphasis on results and the strategies needed to produce results is communicated throughout the organization.

In Step Nine, an Evaluation of the completed scorecard is done. During this evaluation, the organization tries to answer questions such as, ‘Are our strategies working?’, ‘Are we measuring the right things?’, ‘Has our environment changed?’ and ‘Are we budgeting our money strategically?’

4. Methods of Managing Performance

» Visualize key performance data effectively in graph format » Convey performance results quickly with visuals » Use scorecards & dashboards as gateways to first-order analysis & advanced analysis » Monitor red zones & define threshold levels to set indicators & trigger alert deliveries » Link individual KPIs to corporate goals » Cascade scorecards & dashboards throughout the organization & across the value chain

» Deliver scorecards & dashboards via email, on a scheduled or alert basis » Reach all individuals — from executive managers to new associates » Incorporate all enterprise data — financial and operational — from every business process worldwide » Access personalized, secure scorecards & dashboards from any Web browser, Intranet/ Extranet or portal

Summary

A strategy describes how a management team thinks it will achieve its vision of success at some point in the future. A balanced scorecard bridges the gap between vision and strategy, and execution. The “Balanced Scorecard” concept has become widely recognized and implemented by many companies for “strategy management.” It is a systematic framework to translate vision, mission and strategy into a balanced and linked set of strategic objectives, operational initiatives and performance targets for the entire company. This concept is organized into four perspectives, based on the premise that financial performance depends on satisfying customers, which results from having effective business processes, which in turn requires necessary organizational competencies and technology infrastructure.

In addition to being a valuable framework, it is a vital management process that a company uses to foster consensus, alignment and commitment to the strategy by the management team and the people within the organization. It is a process designed to enable the implementation of a company’s strategy by translating it into concrete and operational terms that can be measured, communicated and used to drive decision-making and action at both the business unit and individual levels. Moreover, it is a powerful motivator of behavior and change, as such it can be used to appraise, incent and reward performance.

The Balance Scorecard explicitly identifies the critical few drivers of success, which cut across an organization and together drives the execution of strategic goals. It reflects the company’s strategy by understanding the financial and shareholder requirements, the customers’ needs, internal processes and enablers such as company culture, information and infrastructure. It enables focused discussions about the key drivers of the company’s success using these four perspectives linked together by cause and effect.

Furthermore, a company’s Balanced Scorecard identifies both financial and non-financial measures to assess strategic performance. It balances short-term with longer-term strategic goals using both driver and result measures. InfoTech enables a management team to manage performance proactively; the team learns continuously about its strategic performance and thus understands where it needs to adapt strategy. When used effectively, the Balanced Scorecard becomes the management team’s ongoing strategic agenda that is reviewed and discussed on a dynamic basis for key decision-making and managing operating results.

The Balanced Scorecard has become popular among business leaders. Both grounded in practical reality and conceptually rigorous, the approach has struck a chord in management circles, having been adopted by a significant number of global 100 companies.

The Balanced Scorecard has evolved from a strategic performance measurement system to a strategic performance management system with proven wide reaching and varied benefits to organizations that use it. Companies that have taken the time to reappraise and redesign their performance measures have made themselves nimbler, more responsive to market shifts and more focused on what’s important.

Clearly, companies that get their measures right can reap large rewards. If they can make their decisions better, faster with more relevant information at their fingertips, presented in a way that adds insight instead of overload, the ability to beat the competition grows. In fact, recent studies have shown that over the past three years, companies that manage by measures have reaped returns almost twice as high as companies that manage by “Common Sense.”

As companies get more experienced in using the Balanced Scorecard as an integral part of their strategic management system, the more pervasive and comprehensive are the derived benefits.

Reference

1) Cobbold, I and Lawrie, G. (2002) ‘The Development of the Balanced Scorecard as a Strategic Management Tool’, Performance Management Association. Retrived May 6, 2002 from

http://www.balancedscorecard.org/Home/tabid/36/Default.aspx

2) Kaplan, R. and Norton, D. (1992) ‘The Balanced Scorecard: Measures that drive performance’, Harvard Business Review, pp77–80.

3) Kaplan, R. and Norton, D. (1996) ‘Balanced Scorecard: Translating Strategy into Action’, Harvard School Press, retrieved march 24, 1996 from

http://www.isixsigma.com/offsite.asp?A=Fr&Url=http://www.skymark.com/resources/methods/balancedscorecard.htm

4) Kurtzman, J. (1997) ‘Is Your Company off course? Now you can find out why’, Fortune (Feb), pp128–130.

5) Niven, P. (2006) ‘Balanced Scorecard Step-by-Step: Maximising Performance and Maintaining Results’, John Wiley & Sons.

6) Olve, N., Roy, J. and Wetter, M. (1999) ‘Performance Drivers: A Practical Guide to Using the Balanced Scorecard’, John Wiley & Sons

7) Kaplan, R (2007, Jul 1). Using the Balanced Scorecard as a Strategic Management System (HBR Classic), from http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml;jsessionid=ROUKU2KLHXUGKAKRGWDR5VQBKE0YIISW?id=R0707M&_requestid=87074

8) Kaplan, R (2007, Jul 1). Balanced Scorecard, From http://www.valuebasedmanagement.net/methods_balancedscorecard.html