Strategy Mapping and the Growth and Learning Perspective
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Introduction
Today, about 70 percent of strategic failures occur because of poor execution, and not due to lack of vision. Though, formulating effective strategies is a crucial aspect of a successful business process; it is the execution (implementation) phase where major challenges hindering desired results are found (Kaplan and Norton, 2013). A recent method of improving strategy execution and implementation is known as strategy mapping. A strategy map creates a visual structure utilized to integrate the company objectives from the four perspectives of a Balanced Scorecard. Strategy mapping helps companies to communicate and describe their strategies. This paper describes strategy mapping processes which managers can utilize to implement step-by-step strategy map.
Analysis: The Background of Glacier Inn
Glacier Inn is studied for the purpose of understanding the strategy mapping process and its relationships to management performance and development of value propositions. Formed in northern Minnesota, Glacier Inn was built as an ice hotel based on the style of Quebec’s Ice Hotel (Armitage and Scholey, 2006). The owners of the Glacier Inn were convinced that such model would be unique to attract adventurous Canadians and Americans. The vision of the hotel is to become an ice hotel of international popular to offer unique and innovative services and products to guests. The hotel was made completely of ice materials. Since the hotel’s operating and financial results did not fulfill the desired expectations in its first year, the owners were aware that changes had to be created.
Step 1: Identifying an Overriding Objective
This is the first step that is important because it connects the strategy map with a company’s mission, vision, and core values. It is important to note that the organization’s mission and vision are not the overriding objective. An overriding objective is an overall focus on gaining a better long-term return on investment (Siebelink, 2015). The overriding objective is the first aspect of the strategy map. It needs to contain a time factor and a financial target. For example, an overriding objective can be: to improve return on capital by 7% within two years.
The owners of the Glacier Inn agree that the organization’s vision can only be achieved when an adequate economic return is created to satisfy investors’ needs and to maintain business operations (Armitage and Scholey, 2006). Glacier Inn’s overriding objective is to increase cash flow and profitability.
Step 2: Selecting the Value Proposition
To become market leaders; firms segment the market depending on the current customers’ needs to offer superior values to become better than competitors and to lead the market. The second phase of strategy mapping is to select the value proposition which will help the firm to win the market. According to Siebelink (2015), the value proposition has three aspects, which include operational excellence, product leadership, and customer intimacy. The company must stand out in at least one dominant area whic...