Strategy: Balanced Scorecard WaveCrest Boats, Inc., located in Kinston, North Carolina, is a large manufacturer of sailboats. The company was founded by brothers Tom and Bill Green, who started it to combine their work and hobby, sailing. The Greens's boats are intended primarily for the first-time boat buyer and accordingly include a number of design features for ease of use. Some of WaveCrest's innovative designs have received the attention of other manufacturers in the industry and of sailing magazine editors. The intended market for the boats is the recreational boating enthu- siast and sailing camps and clubs that are looking for a durable and easy-to-use boat.

The sailboat industry can be described as a very cyclical business and depends a great deal on overall economic conditions. Because most customers view sailing as a rather expensive recrea- tional hobby, sales increase when the economy is at its best. The adoption of a boat for racing in a given area and the requirement that competitors use that particular boat to compete have dramati- cally affected sales.

WaveCrest's plant occupies a single large building plus three smaller buildings for supplies, administration, and other manufacturing uses. The plant has two key manufacturing departments, each with a supervisor. The molding department develops the molds for the boats and produces the fiberglass hull for each boat. The assembly department installs the fittings, rub-rail and other hard- ware, and packs the mast, sails, lines, and other items for shipment.

WaveCrest is currently manufacturing two boat designs, a 14-foot cat-rigged boat and a 16-foot sloop-rigged boat. The wholesale price of these boats is $4,500 and $8,950, respectively. The plant manufactures an average of 100 of the 14-foot boats and 50 of the 16-foot boats per month. The plant is staffed by six highly skilled workers in the molding department, and five additional employ- ees in the assembly department. Tom and Bill work on marketing and customer relations in addition to boat design and testing. Tom is principally responsible for design and production and has been able to create two promising new designs that the firm is market testing and considering for produc- tion, as well as some new ideas for streamlining the production process. Bill is primarily responsible for marketing and customer relations and is on the road much of the time attending boat shows and visiting sailing camps and clubs.

Required

1. Develop what you think is or should be WaveCrest's competitive strategy.

2. The Green brothers are interested in evaluating their performance other than using the financial report. In particular, they want to be able to evaluate their progress toward specific goals in each business area. Because they do not see much of each other as a result of Bill's travel, they also want a way to be more aware of what the other is doing and accomplishing. Someone has suggested the use of a balanced scorecard for this purpose. Based on the firm's strategy, develop three to five perspectives of a potential balanced scorecard and four to six measures for each perspective. Do you think the balanced scorecard will provide the information the brothers are seeking?