Strategy Mapping Is an Extension Of Balance Score Card Systems, it was Kaplan and Norton of the Famous BCS propounded this particular theory. In Other words it is a destination statement and the proper implementation of Business Strategy.
It is very much a process driven system in order to achieve the goal of the organization by the management who has drawn the strategy.
“Strategy Mapping” is the process of determining objectives and means of getting there. The balanced scorecard (Kaplan and Norton) is one framework that can be used for strategy mapping. The balanced scorecard has four common perspectives: financial, customer, internal business, and innovation and learning.
Each perspective commonly has from four to seven goals and corresponding measures. The scorecard is balanced in that it contains elements that are short-term and long-term, financial and non-financial, and leading factors and the lagging factors . An impotrance characteristic of a balance scorecard is that it should represent a translation and perfect implimentation of strategy.
In the Balance Score Card model we have seen that the ultimate goal is the profitability .But the profitability can come only by a systematic process which the business has to identify. Kaplan and Norton identified the components of strategy mapping which includes
(1) financial strategies,
(2) strategic themes,
(3) value propositions, and last but not the least
(4) critical internal processes.
For financial strategies, an example of an overriding strategy may be to maximize
shareholder wealth, then the market capitalization of the firm in the stock exchange
increases which may be attained by other financial strategies, such as maximizing
revenues, productivity and asset utilization. In setting strategic themes, the overall
strategy must be decomposed from an internal viewpoint. The focus is on
determining what prudent business must be done to achieve desired strategic
Three generic strategic themes are to increase customer value, achieve operational
excellence, and exhibit good corporate citizenship. In setting value propositions,
it is important to recognize that it is impossible to do it all.
Instead, it is essential to focus on excelling in a few select areas.
Three possible value propositions are product leadership, customer intimacy
and operational excellence.
Critical analyses of internal processes are those crucial functional operations
that must be executed properly to achieve the value proposition and the value
addition chosen. They must be identified so that the organization can assess
the short comings of the current situation and rectify and develop any new skills
sets and technological or process enhancement. The process of determining
critical internal processes assists in prioritizing spending in hiring and training
of human capital in order to increase productivity along with profitability.