Question

1.Vic Corporation refines petrol and sells it through its own petrol gas stations. On the basis of market research, Vic Corporation determines that 60% of the overall petrol market consists of “service-oriented customers,” medium- to high-income individuals who are willing to pay a higher price for gas if the gas stations can provide excellent customer service, such as a clean facility, a convenience store, friendly employees, a quick turnaround, the ability to pay by credit card, and high-octane premium petrol. The remaining 40% of the overall market are “price shoppers” who look to buy the cheapest petrol available. Vic Corporation’s strategy is to focus on the 60% of service-oriented customers. Vic Corporation’s balanced scorecard for 2018 follows. For brevity, the initiatives taken under each objective are omitted.

Objectives	Measures	Target Performance	Actual Performance
Financial Perspective
Increase shareholder value	Operating-income changes from price recovery	$80,000,000	$85,000,000
	Operating-income changes from growth	$60,000,000	$62,000,000
Customer Perspective
Increase market share	Market share of overall gasoline market	4%	3.8%
Internal-Business-Process Perspective
Improve gasoline quality	Quality index	92 points	93 points
Improve refinery performance	Refinery-reliability index (%)	91%	91%
Ensure gasoline availability	Product-availability index (%)	99%	99.5%
Learning-and-Growth Perspective
Increase refinery process capability	Percentage of refinery processes with advanced controls	94%	95%

Required:

1. Was Vic Corporation successful in implementing its strategy in 2018? Explain your answer. (3 marks)
2. Would you have included some measure of employee satisfaction and employee training in the learning-and growth perspective? Are these objectives critical to Vic Corporation for implementing its strategy? Why or why not? Explain briefly. (4 marks)
3. Explain how Vic Corporation did not achieve its target market share in the total gasoline market but still exceeded its financial targets. Is “market share of overall gasoline market” the correct measure of market share? Explain briefly. (4 marks)
4. Do you agree with Vic Corporation’s decision not to include measures of changes in operating income from productivity improvements under the financial perspective of the balanced scorecard? Explain briefly. (4 marks)