A local salon has reached the end of its second quarter of the current year and is evaluating the financial perspective of its balanced scorecard. The salon has decided to make some changes this year to become more competitive in their local market. One of their objectives is to increase their margins. What is an initiative and respective measure that management can put in place to try and achieve this?
A) Serve more customers, drive revenue up, and measure the average customer satisfaction rating.
B) Serve more customers, drive revenue up, and measure the percentage of new customers.
C) Study competitors' prices to observe trends, and measure change in their operating profit margin.
D) Study competitors' prices to observe trends, and measure change in the percentage of new customers served.

Question

Quizplus · Accepted Answer

This question requires familiarity with balanced scorecards, different perspectives, and the elements that comprise each. Choice C is correct because the initiative of studying competitors' prices to observe trends and then measuring the change in operating profit margin would be the most effective way to try and achieve their objective. The remaining choices might help meet other objectives the company is interested in but not the one specified in the problem.

A Local Salon Has Reached the End of Its Second