Your company must decide the order of priority for corporate goals and your target market, as well as define the company’s mission statement and strategic direction.
At the outset of your business, the single most important set of decisions you will make involves defining your organization goals and strategic direction. In essence, you must choose the path you are going to take for the next few quarters of your business.
The path will cause you to channel your energies, hopefully in a manner that will be productive for both you and the organization. However, the further you go down that path, the more difficult it will be to change direction. All of your investments, both intellectual and financial, will be pumped into an increasingly narrower and more focused set of decisions.
The first task is to analyze the market information from your market research. This market analysis will help you to determine the available market opportunities. With this information as a backdrop, you must make decisions in the following areas:
- Corporate Goals: Your company should determine what is most important: profitability of company as a whole (as measured by retained earnings), return on investment to the Executive Team, or sales volume.
- Target Markets: Your company should decide which market segments to target with your products and which marketing efforts will most effectively reach those market segments.
- Mission Statement: Your company should define the mission/purpose of your company, keeping in mind that the mission statement may be read by customers, investors, and even your competition.
- Strategic Direction: Your company should decide where it is headed in the future. What are your future goals for: market size; geographic markets; competitive posture; and distinctive competency?
Through quarter 3, consider your goals and strategic direction to be tentative. As you gain experience through test marketing, feel free to modify these initial decisions. However, by quarter 4, your strategic direction should be firmly established. If not, you will probably not have an opportunity to catch up with the leading firms in your industry.
Players can sell to all segments in each quarter of sales, and, in most quarters, they will. Even though they are not targeting a segment, a number of customers of the non-targeted segments may like the products offered and buy them. Money made from sales to any segment will help revenues and, in turn, will positively affect certain areas of the Balanced Scorecard, such as financial performance.
The reason players have to designate which segments are their primary and secondary target segment is to enable the Balanced Scorecard to evaluate their marketing performance. If the majority of a team’s sales are in their primary target market and the second largest amount of sales is in their secondary target segment, then they will have a good score for marketing. In other words, they are meeting their marketing goals with brand and ad designs that are a good fit for those segments. If they have a large number of sales in segments that are not their primary or secondary choices, then their marketing scores will be lower as they are not appealing to the segments they have targeted.
The balanced scorecard measures several factors of a firm’s performance to get a rounded view of the company’s overall success rather than just financial success. The players can see the full calculation for how the balanced scorecard is determined in that section of their team software.