Sun Networks is a large company that operating solely as a Television broadcaster. However, four years ago, it started offering broadband and telephone services to its Television customers. Customers taking up the offer were then recognized in the business as ‘Combo customers’ and they had to take up both the broadband and telephone services together with the Television service. Other customers were still able to subscribe to Television alone but not to broadband and telephone services without the Television service. All contracts to customers of Sun Networks are for a minimum two-month period. The Television box is sold to the customer at the beginning of the contract. However, the broadband and telephone equipment is only rented to them. In the first few years after product bundling was introduced, the company saw a steady increase in profits. Then, Sun Networks saw its revenues and operating profits fall. Consequently, staff bonuses were not paid, and staff became dissatisfied. Several reasons were identified for the deterioration of results: i. In the economy, discretionary spending had been cruelly hit by rising unemployment and inflation. In a bid to save cash, many Television customers were cancelling their contracts after the minimum two-month period as they were then able to keep the Television box. The box comes with several free channels, which the customer can continue to receive free of charge, even after the termination of their contract. ii. The company’s customer service call center, which is situated in another country, had been the cause of lots of complaints from customers about inadequate service, and the number of calls it sometimes took to resolve an issue. iii. Some bundle customers noticed that the broadband service that they had subscribed to did not work. As a result, they were immediately cancelling their contracts for all services within the 15-day termination period permitted under the contracts. In a response to the above problems and to increase revenues and profits, Sun Networks made the following changes to the business: i. It made a strategic decision to withdraw the Television–broadband–telephone package from the market and, instead, offer each service as a individual product. ii. It guaranteed not to increase prices for a 12-month period for each of its two services. iii. It moved its call center back to its home country and improved the level of staff training given for call center workers. iv. It examined and resolved the problem with customers’ broadband service. It is now one year since the changes were made and the finance director wants to use a balanced scorecard to assess the extent to which the changes have been successful in improving the performance of the business. REQUIRED: a) For each viewpoint of the balanced scorecard, Explain the goals together with a corresponding performance measure for each goal which could be used by the company to assess whether the changes have been successful. Note: Use following format to give answers: Goals / Performance Measures / Reason b) Explain how the company could reduce the problem of customers terminating their Television service after only two months.
Sun Networks is a large company that operating solely as a Television broadcaster.
However, four years ago, it started offering broadband and telephone services to its
Television customers. Customers taking up the offer were then recognized in the
business as ‘Combo customers’ and they had to take up both the broadband and
telephone services together with the Television service. Other customers were still
able to subscribe to Television alone but not to broadband and telephone services
without the Television service.
All contracts to customers of Sun Networks are for a minimum two-month period. The
Television box is sold to the customer at the beginning of the contract. However, the
broadband and telephone equipment is only rented to them. In the first few years after
product bundling was introduced, the company saw a steady increase in profits. Then,
Sun Networks saw its revenues and operating profits fall. Consequently, staff bonuses
were not paid, and staff became dissatisfied. Several reasons were identified for the
deterioration of results:
i. In the economy, discretionary spending had been cruelly hit by rising
were cancelling their contracts after the minimum two-month period as they
were then able to keep the Television box. The box comes with several free
channels, which the customer can continue to receive free of charge, even after
the termination of their contract.
ii. The company’s customer service call center, which is situated in another
country, had been the cause of lots of complaints from customers about
inadequate service, and the number of calls it sometimes took to resolve an
issue.
iii. Some bundle customers noticed that the broadband service that they had
subscribed to did not work. As a result, they were immediately cancelling their
contracts for all services within the 15-day termination period permitted under
the contracts.
In a response to the above problems and to increase revenues and profits, Sun
Networks made the following changes to the business:
i. It made a strategic decision to withdraw the Television–broadband–telephone
package from the market and, instead, offer each service as a individual
product.
ii. It guaranteed not to increase prices for a 12-month period for each of its two
services.
iii. It moved its call center back to its home country and improved the level of staff
training given for call center workers.
iv. It examined and resolved the problem with customers’ broadband service.
It is now one year since the changes were made and the finance director wants to use
a balanced scorecard to assess the extent to which the changes have been successful
in improving the performance of the business.
REQUIRED:
a) For each viewpoint of the balanced scorecard, Explain the goals together with
a corresponding performance measure for each goal which could be used by
the company to assess whether the changes have been successful.
Note: Use following format to give answers:
Goals / Performance Measures / Reason
b) Explain how the company could reduce the problem of customers terminating
their Television service after only two months.
Step by step
Solved in 2 steps
