SWOT analysis on Balanced Scorecard (Term Paper Sample)

SWOT analysis on Balanced Scorecard
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A balance scorecard provides both a financial and non-financial perspective of the business. A balanced scorecard takes into consideration various players in the business. These range from financial institutions, suppliers, customers, market, human resource and so forth. The balanced score card developed by Kaplan and Norton takes into consideration four perspectives. These include internal, customer, financial and innovation and learning perspective.
A SWOT analysis can be used in assessing what strategies to measure in a balance scorecard. A SWOT analysis can be utilized to develop key performance indicators to measure the four perspectives. A SWOT analysis is important in identifying the strategy and vision of an organization before employing the balanced scorecard.
When an organization combines the SWOT analysis with its balanced scorecard, it is able to measure its strengths against its competitors’ weaknesses. In this way, an organization is able to maximize its opportunities in the market.
A SWOT analysis would be employed to determine the weaknesses, strengths, opportunities and threats to the four perspectives in the balanced scorecard. The analysis would develop metrics to measure the efficiency of these perspectives.
When conducting a SWOT analysis on a balanced scorecard, various questions are likely to be asked. The questions emanate from the evaluation of the strengths, weaknesses, opportunities and threats of the four perspectives of a balanced scorecard.
Strengths
Why would a customer choose the organization over competitors? To determine the strength of an organization, a SWOT analysis would be able to determine the level of customer satisfaction. In any organization, customers are an asset. A SWOT analysis is able to determine how an organization is strategically placed to retain and attract customers. Since we live in a competitive world, organizations have to be dynamic and flexible in satisfying customer needs. A successful organization should show high customer satisfaction levels and several repeat business rates. This increases the market share of an organization.
Are internal strengths that strong? What are the internal strengths? A SWOT analysis would be able to determine the strength of the internal factors. Internal factors such as quality levels, internal costs and productivity need to be measured. Such internal factors are crucial in determining the success of an organization. They are drivers of performance in an organization. A SWOT analysis is effective in measuring the efficiency of these internal factors.
How well are the finances managed? A SWOT analysis will determine the strengths of an organization in managing its finances. The analysis shows how an organization efficiently manages it finances. The efficiency of an organization’s finances can be measured by comparing sales as a percentage to the expenses. A SWOT analyses will also measure the strength of the financial ratios.
A SWOT analysis is able to determine what assets that are managed efficiently. It also determines what financial strengths an organization lacks that competitors enjoy. The analysis also determines what capital sources that would dry up in the foreseeable future.
Weaknesses
Why do competitors do better than us? A SWOT analysis is able to compare the strength of an organization in comparison to its competitors. The analysis compares the performance of an organization against competitors. The analysis also compares the performance of the organization over the years. After pointing out the weaknesses, an organization should develop strategies to eliminate / minimize these weaknesses that place them in a competitive disadvantage against competitors.
Other questions to be asked on weaknesses are as follows: are there processes and procedures to be improved? Why are customers’ complaints on the increase? Why are critical financial ratios weak? A SWOT analysis exposes weak areas in an organization. The metrics adopted point out areas of weaknesses. The metrics are developed from competitors’ performances as well as historical trends.
Opportunities
What ...