balanced scorecard for company entering Turkish market

Balanced Scorecard
The balanced scorecard is a managerial approach based on the principle that four different elements of a business are interrelated. Thus, to optimize one, a strategy should seek to optimize all of them. The four elements in question are the financial, the business processes, the learning & growth and the customer. If one element is prioritized in the business, then the business will be unbalanced. The businesses that thrive in the long run are the businesses that are the most evenly balanced (QuickMBA, 2010).
According to the Balanced Scorecard Institute (2017), the balanced scorecard is used in a few different ways, including to communicate what management is trying to accomplish, to align the day-to-day work with strategy, to prioritize projects, and to monitor progress towards strategic targets.
Perhaps the easiest element of the scorecard is the one most managers are familiar with – the financial. Financial measures include things like sales targets, profit targets, market share and margins. For Quest's market entry partnership with Duzen, there are specific financial targets that have been set out for revenue and net income. The revenue target can also be expressed in market share, as there is an existing market in which Duzen already participates. By targeting a specific share of the market, the revenue target will fall in line. The profit target will not only reflect revenue but also the cost structure of the joint venture, aligning managers with smart, measured growth rather than unsustainably expensive growth at any cost.
In order to achieve revenue and market share targets, the joint venture will need to deliver a certain amount of customer satisfaction. For a new venture – Quest is using this as a market entry – it is harder to measure customer satisfaction because there are few customers, none of which have been with the company long. But for the first year, Quest can measure customer awareness and perception of the brand. Awareness can be measured by the number of leads in their system – how many contacts do they have for their salespeople to follow up with. For perception of the brand, surveys can be conducted by a third party, or even Duzen, just to gauge after the first year how many people in the market have even heard of Quest. The more, the better.
Internal businesses processes are what will drive both the customer-facing KPIs and the margins. A firm engaged in market entry is most likely going to focus on building its brand and its share of market, which means that most of the process measures are going to be marketing and sales related. A couple of key KPIs in that regard are the cost per lead and the cost per customer acquired. The latter, coupled with estimated lifetime value, can paint a picture of whether the company has efficient sales and marketing processes. There should also be KPIs relating to other cost centres, such as the cost of getting Quest equipment into Turkey. One of the advantages of the joint venture is that Duzen already has distribution infrastructure, so Quest should have a KPI to measure if it is getting value out of the joint venture, and that should be reflected by a percentage of revenue to actually get the equipment to market.
The fourth element of the balanced scorecard is the learning & growth category. Again, a new market entry should have slightly different KPIs from an established company, because the strategic priorities of the organization are a bit different. In this case, the major "people" focus is on building the organization by getting qualified people into the right positions, and on integrating the Quest and Duzen people who are brought in. The national culture of Turkey is quite different, and outside of Istanbul could even be challenging, for an expat, so bringing together the two company cultures in the joint venture may not be as easy as just showing up. So the KPIs will have to focus on the satisfaction levels of the employees in the new venture, and qualitative data about their perceptions on the joint venture, how much culture clash there is, and whether the people being brought into the company are genuinely qualified to perform the roles for which they have been hired.

References

Balanced Scorecard Institute (2017). Balanced scorecard basics. BSI. Retrieved August 1, 2017 from http://www.balancedscorecard.org/BSC-Basics/About-the-Balanced-Scorecard

Quick MBA (2010). The balanced scorecard. QuickMBA. Retrieved August 1, 2017 from http://www.quickmba.com/accounting/mgmt/balanced-scorecard/