Reference no: EM133018308

Question - Hobart Ltd makes a high-end kitchen range-hood KE8. Hobart Ltd's data for 2019 and 2020 follows:

	2019	2020
Units of KE8 produced and sold (units)	40,000	42,000
Selling price	$100	$110
Direct materials (square metres, m2)	120,000	123,000
Direct materials cost per square metre	$10	$11
Manufacturing capacity for KE8 (units)	50,000	50,000
Conversion cost	$1,000,000	$1,100,000
Conversion costs per unit of capacity	$20	$22
Selling and customer-service capacity	28 customers	27 customers
Selling and customer-service costs	$720,000	$725,000
Cost per customer of selling and customer service capacity	$24,000	$25,000

Hobart Ltd produced no defective units and reduced direct material usage per unit of KE8 in 2020. Conversions costs in each year are tied to manufacturing capacity. Selling and customer-service costs are related to the number of customers that the selling and service functions are designed to support. Hobart Ltd had 23 customers in 2019 and 25 customers in 2020.

Required -

a. Evaluate Hobart's strategy. Is it one of product differentiation or cost leadership? Explain briefly.

b. Provide an analysis of the success of this strategy. Are there any potential limitations on the future growth of the organisation?

c. What are the four key perspectives used in a balanced scorecard? Provide a brief explanation for each perspective.

d. Describe two elements for each perspective that you would include in a balanced scorecard for Hobart.

e. What are three important pitfalls to avoid when implementing a balanced scorecard?