Industry Analysis and the Balance Scorecard Flashcards
What is the Balanced Scorecard (BSC) Framework?
A performance measuring system that helps companies identify and improve their internal operations to help with external outcomes, it also measures past performance data and provides organizations with feedback on how to make better decisions in the future
What are the 4 different perspectives measured in the Balanced Scorecard Framework?
a) Financial metrics –> used to understand financial performance such as sales, expenditures, and income
b) Customer perspectives –> collected to gauge customer satisfaction with quality, price, and availability of products or services. Customers provide feedback about their satisfaction with current products
c) Internal/Business Processes –> investigate how well products are manufactured. Operational management is analyzed to track any gaps, delays, bottlenecks, shortages, or wastes.
d) Learning and Growth –> analyzed through investigation of training and knowledge resources. Handles how well information is captured and how effectively employees use that information to convert it to a competitive advantage within the business
What is an STR Report?
A benchmarking tool that compares your hotel performance with competitor hotel performance based on a monthly or yearly basis to understand how well a business is doing against other properties
What are the 3 metrics used in the STR Report?
a) Occupancy –> Expressed as percentage, calculated as Rooms Occupied/Total number of rooms
b) Average daily rate (ADR) –> ADR is the average room rate sold for a given time period. Calculated as Total revenue/number of rooms sold
c) Revenue per available room (RevPAR) –> Calculated as Total revenue/Total number of rooms or ADR x Occupancy. The higher the RevPAR, the better
How to calculate the hotel’s performance as an index in an STR Report?
Divide hotel’s data in each of the three metrics (Occupancy, ADR and RevPAR) with averaged competitor set’s data and multiply by 100. If your hotel scores higher than 100%, then your hotel is outperforming other hotels, and vice versa
What is the purpose of a Market Share Analysis?
Analyze how well a firm is doing in the marketplace compared to its competitors. Market share is a company’s total sales measured as a percentage of an industry’s total revenue. Why? To see the position of the business in the market in comparison to competitor businesses
Define a Profit and Loss Statement (P&L) and its purpose
A record of revenue and expenses incurred by a business in a given period of time to assess the profitability of the company
