Reference no: EM132572116
Health and Wealth Bhd (HWB) is a public listed company with a chain of 50 general department stores in Malaysia. The company is known for the high quality of its products, mainly food. The majority of its goods are sourced from trusted manufacturers and branded under the Company's own "Health and Wealth"
Currently, HWB faces a tough competitive environment with all the major players in its market trying to secure their positions. Poor economic conditions worldwide have significantly affected the country. Consumer spending is falling throughout the economy and there is no immediate likelihood of a resumption of growth. HWB's CEO has recently conducted a strategic review of the business in the context of the current economic recession.
He has identified the following strategy as critical for HWB's successes:
- focus on key customers those who are occasional shoppers but not currently loyal to the business
- Ensure offerings meet customer needs.
- Cut the cost which not related with customers priorities.
- amend current processes to meet this new focus
- build for the future with a programme of sustainable development.
The company needs to address the impact of this new strategy on its performance measurement systems. HWB uses a balanced scorecard to assess its strategic performance and the scorecard is used to link the business strategy with its more detailed performance measures. Currently, Armstrong uses Economic Value Added (EVA), earnings per share (EPS) growth and share price performance to monitor its financial performance.
Financial data for the previous two years are available as follows:
2018 2019
Profit for the year $353.8m* $271.7m
Average number of shares in issue 1,600m 1,600m
EVA $306m $110m
Average share price $2.45 $2.08
m* - millions
Problem 1: The CEO has asked to assess the financial performance of the company using the three shareholder performance indicators.
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