Executive Summary The aim of this report is to research the balanced scorecard evolutions, the Porter five-force analysis that AGL Energy Limited applied, strategy map and balanced scorecard that AGL Energy Limited adopted for strengthening their business profitability and sustainability competitive advantages, and also strategies recommendations. In the literature reviews, it showed and explained the balanced scorecard evolutions and the real companies that adopted the concept of the BSC systems follow by the advantages, benefits, challenges and limitations of applying the BSC in the real companies. The next part of this report is a company analysis of AGL Energy Limited, which is chosen to research its industry analysis and generic strategic that applied by it. Furthermore, the development of BSC and strategy map that based on the company vision, missions, objectives and strategies are included in this report. Recommendations for the company to improve their business strategy, profitability and sustainability competitive advantages will be included in the end of the report. 1
Introduction Each organization has its own objectives and goals to be achieved. Hence, the organization has to come out different appropriate business management strategy technique such as balanced scorecard (BSC), benchmarking and other business strategies. In order to improve its profitability and sustainability competitive advantages in the business industries, the organization has to apply a well-played and wise strategic management system to support its daily operations business. Even though there are different kind of strategic management systems and techniques that can brings benefits and advantages to the organization, choosing an appropriate strategic management system for the organization is a priority one. If the organizations choosing an appropriate strategic management system, the performance of the organizations will be greatly influences in a well manage systems. Thus, it can solve the daily operational business problem and give a good sight for the senior management decision- making and analysis on the environment. As the business environment is always keep changing, the organization also need to keep its performance measurement system up to date. If an organization always updates its performance measurement system, it can help them to strengthen their business profitability and sustainability competitive advantages. 2
1.0 Literature Review 1.1 The Definition of Balanced Scorecard According to the Balanced Scorecard Institute, Strategy Management Group Company (1998), It state that the balanced scorecard is a well-known strategic planning and management system developed by Professor Kaplan and Mr. Norton (1992) which contain with four fundamental perspectives: Finance, Customers, Internal Business Process, Learning and Growth that can manage the organization strategically to achieve the organization goals by converting the organizations vision and strategy into the daily operational objectives. 1.2 The Evolutions of Balanced Scorecard In the evolutions of the balanced scorecard, there are about three generations of the balanced scorecard that slowly evolve from the year it developed until it becomes a well-known strategic planning and management systems to all public and private companies today. 1.2.1 Balanced Scorecard 1st Generation In the article of "Conceptual Foundations of the Balanced Scorecard", Kaplan and Norton (1992)