report
In the hospitality industry, a various range of tools have been used to execute a strategy. According to Philips and Louvieris (2005), Balanced Scorecard (BSc) model has been successfully applied since 1994 by Hilton Hotels. Other popular approaches have also been considered, for example, Six Sigma, contingency approach, system approach, stochastic frontier approach and Data Envelopment Analysis (DEA).
Recently, as a common trend, finance managers have taken the centre position in any corporate structure. Balanced Scorecard appeared as a fairly accurate measurement because it re-dimensioned the relative significance of Finance dimension. As an origin form of Balanced Scorecard, there are four dimensions which are Finance, Customer, Employee and Internal Process. All of these four dimensions are thought to be equally important, or “balanced”.
Under these four dimensions, there are objectives and key results areas (KRAs). They are also considered to be equally crucial and “balanced”. The choices of “objectives” and KRAs to include them into the Balanced Scorecard are the key steps.
First of all is the customer dimension. In this dimension, increase market share is the prior objective. After being appointed as the CEO, Richard Solomons extensively expanded IHG’s markets to 4 other regions: Asia, Middle East, Africa and China in order to maximize its scale. Richard indicated that the increase in market share target will be implemented by utilizing powerful revenue systems, innovations and capitalizing on benefits of scale and efficiency in margin growth. In 2011, revenue of IHG increased by 9% to 1.8 billion, earning per share jumped 32% to $1.34. IHG tends to invest the free cash flow to equity into business to speed up the growth. The second objective is the increase in repeat business. On average, customers often come back to IHG hotels 3 times and they want to pay premium to use the best service of IHG. 60% of guests have spent more than 7 nights in IHG’s
Recently, as a common trend, finance managers have taken the centre position in any corporate structure. Balanced Scorecard appeared as a fairly accurate measurement because it re-dimensioned the relative significance of Finance dimension. As an origin form of Balanced Scorecard, there are four dimensions which are Finance, Customer, Employee and Internal Process. All of these four dimensions are thought to be equally important, or “balanced”.
Under these four dimensions, there are objectives and key results areas (KRAs). They are also considered to be equally crucial and “balanced”. The choices of “objectives” and KRAs to include them into the Balanced Scorecard are the key steps.
First of all is the customer dimension. In this dimension, increase market share is the prior objective. After being appointed as the CEO, Richard Solomons extensively expanded IHG’s markets to 4 other regions: Asia, Middle East, Africa and China in order to maximize its scale. Richard indicated that the increase in market share target will be implemented by utilizing powerful revenue systems, innovations and capitalizing on benefits of scale and efficiency in margin growth. In 2011, revenue of IHG increased by 9% to 1.8 billion, earning per share jumped 32% to $1.34. IHG tends to invest the free cash flow to equity into business to speed up the growth. The second objective is the increase in repeat business. On average, customers often come back to IHG hotels 3 times and they want to pay premium to use the best service of IHG. 60% of guests have spent more than 7 nights in IHG’s