156 Case Studies in Strategic Management
METRICS
Based on the business objectives discussed in the section ‘BUSINESS OBJECTIVES OF
PANTALOONS’ , operational strategies are derived using balance scorecard techniques under four
perspectives, as discussed in the section ‘DERIVATION OF OBJECTIVES USING BALANCED
SCORECARD FOR PANTALOONS’ . The various perspectives of balance scorecard are measured
using different metrics, which are shown in Table 9.2.
Table 9.2 Measurements for strategic objectives
Serial Number Strategic Objectives Formulae
Financial perspective
F.1 Return on investment Net income/Capital employed
F.2 Return on marketing
investment
Increase in sales Marketing costs
F.3 Cost of sales Factory cost + Administrative overheads +
Selling and distribution overheads
F.4 Sales per employee Net sales/Total number of employees
F.5 Claims percentage (Total loss and damage claims/Total
transportation costs) × 100
F.6 Sales by demand Category-wise net sales/Stores total sales
Customer perspective
C.1 Number of new customers Customers in the current period
Customers during the last period
C.2
Customer loyalty Tendency of customers to choose
Pantaloons product/Total products in
the market
C.3 Dissatisfaction management Number of complaints after execution/
Previous number of complaints
C.4 Conversion rate Visitors who take desired actions
(purchase)/Total number of customers
Internal process/operational
perspective
O.1 Inventory turnover rate Cost of materials consumed during the
period/Average stock held during the period
O.2 Effectiveness of distribution
channels
Defects in distribution channels
(checkpoints)/Total number of checkpoints
O.3 Stock position Inventory in the beginning + Purchases
during the year Sales during the year
O.4 Transit time Number of days (hours) from the time a
shipment leaves the organization to the
time it arrives at the desired location versus
transit time quoted by the carrier
O.5 Resource utilization Budget spent/Total budget allocated
(Continued)
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