Research Paper on Effectiveness Metrics of Starbucks, McDonald's and Johnson & Johnson

4 pages
921 words
George Washington University
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Research paper
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To measure the effectiveness of the company in meeting its four balanced scorecard perspective, the company uses the following metrics

On financial perspective: the total net revenue generated, cost reduction possibilities, how efficient the company assets are utilized, effective assets and resource utilization, penetration of global foreign markets,

On customer satisfaction: the level of loyalty of its company, rates of customer increase, how well their customers are satisfied with services and products, the effects the company has on the environment, how well the company diversifies both in products and in physical locations, measures to increase their quality of products and services, the levels of after purchase complains, creating a network of regular customers, increasing the level of market shares, promotion offered to new customers to attract more.

On internal perspective: focus on measuring the revenue produced by hour per every employee, and the extent to which the assets are effectively utilized strategizes on opening up of new stores to reach more customers, automation of its operations,

In measuring the levels of innovation/learning and growth the company the use of its mobile app that is the mobile money and pay, as well as the company Reward Loyalty Program, they look at the amounts of orders and payments made through the mobile apps and the impact the orders have on the overall net revenue. Also, level of employees satisfaction which in turn increases employees productivity and service to customers, focus on employees empowerment, offers training to employees

McDonald's Metrics

MacDonald is a company that is comparable to Starbucks as they are in the same industry. To measure its performances based on the four perspectives, the company uses:

On its financial perspectives: the company compares its sales growths in subsequent years. This ensures that it cuts on its operating costs by 5%, maintaining a positive attitude towards branding. It also increases its distribution channels, creates a wide sales network system, ensures there is a repeat purchase of at least once per month for its customers.

On customers perspectives metrics are: Monitors the in-store guests, measures the levels of customer satisfaction, global standards, franchise management, and store management.

On learning, innovation and growth perspective: it ensures learning and growth of employees knowledge, offers training and measures the code of conduct of its employees, conducts marketing mix for their products and services

For its internal perspectives, the company measures on they have good supplier relations, the overall organizational performance is good, the companies working hours (24hrs), they research, and design localized menus every four years.

Johnson & Johnson metrics

On financial perspective: measures carried out are, on the level of equity of shareholders, on the Return on Investment, the level of value addition, the market value as well as the amounts of profits made from sales of new products introduced to existing markets.

Customer perspectives: the company measures the percentage of its current market shares; its brand image is as well deemed important, levels of customer satisfactions, the rate of annual sales and the number of customers who visit their stores annually, the percentage of their customer index is as well recognized to be relevant.

Innovation/ Learning and growth: levels of new market development investments, the expenses incurred in marketing the companys products, training of the company staff, innovations in areas of developments to create new products which are unique, the levels and amount of created companys trademarks, also efforts to increase employees knowledge (Bontis, 2001).

Internal process perspective: looks at the rate of inventory turnover, the production increase rates, the amounts of expenses incurred in the administration and employees maintenance.

In comparing the metrics of the three companies, its evident that the metrics of Starbucks and McDonalds and Johnsons and Johnsons though different uses closely related. This is the case because the two companies operate in the same industry. They compete for the same clients, and each strives to increase its market share every day. However, its clear that McDonalds is positioned to satisfy their employees with their current products in the existing market segments, unlike Starbucks which is concerned with product and market diversification to tap more customers. The companies value their customers and are keen on satisfaction levels of customers. Also, they are concerned about their employees hence strive to increase their levels of satisfaction which in turn impacts positively on their service to the customers (Housel, 2000). They occasionally engage the customers in training and development programs to heighten their knowledge levels and serve the customers diligently while meeting the dynamic needs of customers balanced scorecards are an important element of measuring the growth and future of organizations (Kaplan, 2006).

The companies seem to lack a performance measure of determining the levels of employees motivation. In as much as employees are trained and provided with the required knowledge and working tools, motivation is an essential element of organizational success (Davis, 1996).

In conclusion, its evident that the balanced scorecards are almost similar to all organizations regardless of their industry and operations. However, its important for companies to implement their balance score cards effectively to meet their goals and this can be achieved by designing scorecards that are in line with the companys goals and strategic objectives.



Bontis, N. (2001). Assessing knowledge assets: a review of the models used to measure intellectual capital . International Journal of Management Reviews , 41-60.

Davis, T. (1996). Developing an employee based scorecard. Journal of Management Development , 14-18.

Housel, T. a. (2000). Measuring and Managing Knowledge. Toronto: Mcgraw- Hill.

Kaplan, R. S. (2006). Using Balanced Scorecard as a Strategic Management System. Harvard Business Review , 55.


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