Balanced Scorecard and Strategic Management

Balanced Scorecard and Strategic Management

Raytheon Company is an international aerospace and defense company which was founded in 1922 by Charles Smith, Lawrence marshal and Vannevar Bush, with its headquarter in Cambridge, U.S.  The company is made up of four basic business units under its umbrella, namely; the integrated Defense systems, Missile systems, Space and Airborne systems as well as the intelligence, information and services. According to Raytheon (2013), the four units of business work harmoniously together in the process of providing important solutions for a wide variety of customers, both the government and commercial customers.

Raytheon’s mission statement according to Raytheon (2013) is very ambitious and more customer directive and oriented.  The company’s mission to use its people and products in providing the short term and the long term solutions across the LVC (Live, Virtual and constructive) and Command and control (C2) domains. This mission goes beyond to saving lives and saving money for war fighters across the globe.

The mission above is in perfect correlation with the company’s vision, with a statement of being the most admired defense and aerospace systems company through our world-class people, innovation and technology (Raytheon, 2013).

Aerospace and defense business offers a market which has very transformative, challenging, and unique market environment with various competitive firms in the globe. Due the nature of the market, Raytheon has adopted a five process strategic schemes in order to maintain it market position as the fourth largest international aerospace and defense in the globe. The five step strategic process involves focusing on technology, innovation, and mission assurance for the existing and evolving customer mission needs (Raytheon 2, 2013). The step involves sustaining and growing the company’s position in the company’s four core markets. Achieving sustainable growth in the company’s position in the market is done through; sensing, providing the best-value customer solutions across the breadth of our world class sensing expertise, effects, leading the integration of kinetic and non-kinetic effects to include EW, directed energy and cyber solutions (Raytheon, 2013). The step also involves C3I, which encompasses broadening the market presence in communications, C2, networking, information, and knowledge management, Mission Support, which also involve expanding product support, engineering services, logistics, and training.

The second step of the company’s strategy involves leveraging the company’s domain knowledge in air, land, sea, space, and cyber for all markets. The third step on the other hand encompasses expanding the company’s international business by building on our relationships and deep market expertise (Raytheon, 2013). The fourth stet of the five step strategic plan for the company involve building upon the company’s customer focused mindset, further strengthening the company based on performance, relationships and solutions. The last step of the strategic process encompasses delivering innovative supply chain solutions to accelerate growth, create competitive advantage and bring value to the company’s global customers (Raytheon, 2013).

Objectives for Improvements

The company intends to undergo through some internal organizational improvement for the business processes. Considering the changing competitive environment in the market and the changing customer preferences, the company has devised a strategic plan shown in the below table with performance expectations, measures, and new program development (action) (Olson, 2008).

Table1:  Objectives, performance measures and levels and program development

Objectives	Performance Measures (Metrics)	Expected Performance Level	New Action or Program Development
Increasing Foreign Military Sales	New sales, total sales, and percent of increase The company ensures 100% delivery/fielding on time as prescribed by contract; and that the goods delivered are 100% per customer specification.	The company set up 100% target of Patriot Missile system upgrade in Jordan. It set up an 80% Patriot Missile system sale in Oman	Increase the allocation of resources and people, to FMS products. Make contact with the government of Jordan and demonstrating to it the need for upgrading the Patriot Missile system.   Contact government of Oman and present a national defense plan.
Reducing the costs in the logistics division	Cost per item shipped using 3PL Cost per shipment 3PL1 v 3PL2 v 3PL3	Reduce costs of 3PL use for shipping by 10%. The company placed a target of 50% on the programs over $100m which authorized the exclusive use of the company LMS.	Explore the viability of using a 4PL’s expertise in transportation   Convince the customers to use the LMS; demonstrate its benefits. Adjust internal shipping processes to include cost savings benefits
Maximizing reset efforts for the Rapid Aerostat Intermediate Defense systems	Determination of repairable RAID systems returned from theater.	Raytheon Company has set up a target of 70% on repairable RAID systems Upgrade 30% target on systems using the green technology alternate energy, UPS	Construct Reset Team using qualified FSR’s returning from theater. Develop 2nd build process to include Alt Energy RAID’s

 

From the table above, Raytheon’s objectives and strategic plans for the market and its products evaluation is vivid and focused. With the level of expectation, the three objectives discussed in the table above support the Raytheon strategy as outlined in the company’s vision and mission statements. The table below also shows the relationship between these three objectives with the company’s mission, vision, and strategies.

Table 2: Table showing the relationship between the objectives, vision, mission, and objectives

Objectives	Mission	Vision	Strategy
Increasing Foreign Military Sales	Our people and products are currently providing solutions across the globe. The company has set an objective of ensuring maximum coverage around the globe for governments that want to ensure improved defense and internal security.	To be the most admired defense and aerospace systems through our world- class people innovation and technology. Raytheon Company is making the vision a reality by ensuring that its products reach all corners of the globe. This is done through numerous innovations that the staff comes up with daily.	Raytheon Company can benefit from the various strategies put in place thus increasing their foreign military sales.
Reducing the costs in the logistics division	Thus, they achieve, by following their mission statement of making better the lives of people globally. This is through affordable security artillery	Raytheon Company follows its vision of being the most admired aerospace companies by reducing the costs in the logistic department.	Costs are reduced by following the various strategic steps. This is beneficial to the clients because it translates to reduced costs trickling down to the customers in the form of the reduced amount of money used to purchase security artillery. This objective is achieved by providing the best value-customer solutions and delivering innovative supply chain solutions, which help in the acceleration of growth and the creation of a competitive advantage over competitors.
Maximizing reset efforts for the Rapid Aerostat Intermediate Defense systems	This objective is achieved by the encouragement of technological innovation from the staff of Raytheon Company.	Raytheon will be the most admired aerostat company because of its efforts to reset the RAID system and to promote the use of a single LMS	Strategies are developed so as to encourage the use of single LMS instead of the use of two or three costly LMS

 

According to the process objectives tabled above, there is a direct relationship between the three objectives and the financial objectives of the company. The strategic process outlined above support the Balanced Scorecard values approaches as explained earlier. The finance objectives also supported through reduction of the logistics costs and also through ventures into new businesses. In the same way, the customer service objectives are supported by product performance and faster delivery. The company has achieved much of its goals in line with the company’s missions and is in the verge of realizing visions stipulated in the company’s slogans. Strategically, the company’s customers’ loyalties and demand have massively increased over the last years signaling increased appreciations of the products, thereby enabling Raytheon Company become among the best military and commercial electronics in America.

 

 

 

 

 

 

 

 

 

References

Jones, P. (2011). Strategy Mapping for Learning Organizations: Building agility into Your Balanced Scorecard. Farnham, Surrey, England: Gower Pub.

Olson, E. (2008). Building Your Plan; Balanced Scorecard. Retrieved from http://mystrategicplan.com/resources/balanced-scorecard-2/

Raytheon (2013), Retrieved from http://www.raytheon.com/ourcompany/businesses/

 

 

 

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