Performance measurement is an essential aspect that defines whether an enterprise is successful or no. Through an analysis of the Kohl’s Corporation 10-K, various performance measurement approaches are used. Like in conventional business practice, the performance measures are used to inform the direction that a firm should take (Kellen & Wolf, 2003). As pointed out in the text, there are many perspectives in approaching performance measures. The measures used by Kohl’s Corporation can be categorized into four groups.
Financial measures
Performance measures that take the financial perspective have the goal of looking into whether a company is profitable, and whether the risk taken by shareholders in investing in the company is justified (Franco-Santos, Kennerley, & Micheli, 2007).
Measures used in financial analysis are intended to present a clear picture of the company’s position regarding cash flow and growth in profitability (Kellen & Wolf, 2003). Kohl’s Corporation does well in covering these aspects by offering the company’s current standing and projected increase in revenue.
Customer measures
Other forms of performance measures that a company employs look into how the strategies employed by an enterprise benefit the customers. The goal here is to establish whether the needs of the customers are being satisfied through the services and products offered by businesses (Kellen & Wolf, 2003). These performance measures, often referred to as customer measures indicate whether a company is in touch with the views and needs of its target market. Though the information realized through these measurements, a company can establish areas it can work on to get more revenue.
Kohl’s Corporation management in conducting its customer measurement recognizes the importance of offering personalized service to the customers. Besides, the company agrees that it is through offering of opportunities for customers to make savings when conducting purchases that value for money is realized. To this end, the company talks of the establishment of the Yes2You loyalty program (Securities and Exchange Commission, 2016). This is a strategy that looks into ways through which customers gain value for the money spent at Kohl’s Corporation. This is a strategy that has worked, with the company noting that 65% of the total sales realized in 2015 could be attributed to this program.
The implication, here, is that improvement of customer loyalty should be the priority of Kohl’s Corporation. As shown through the success of the Yes2You loyalty program, the company needs to invest in similar programs in a bid to improve its revenue and general market share. These customer measures, therefore, gauge the extent to which a company is in touch with its target customers. The report from the 2015 financial year indicates that the efforts made by the enterprise to improve customer loyalty have been successful. This is because members who subscribe to the company’s Yes2You program spend more money at Kohl’s.
Internal business measures
Other standard measures used to gauge business performance take the perspective of internal business processes. To this end, companies seek to examine whether the business processes and tactics employed efficient, in regards to profitability and customer satisfaction (Franco-Santos, Kennerley, & Micheli, 2007). Businesses engaged in internal business measurement seek to come up with ways through which businesses efficiently serve the interests of both customers and shareholders. An important aspect of internal business measurement involves looking into ways through which resources are allocated optimally (Kellen & Wolf, 2003). To this end, a measurement of the internal processes indicates the areas where resources should be directed, to ensure that a company operates optimally.
In the measurement of its internal processes, Kohl’s Corporation looks into ways through which more customers can be reached; thus increasing the revenues, while also indicating how the shopping experience of the customers can be improved. The management suggests that the investment in “BOPUS”; a mobile platform that allows customers to make virtual purchases is a key aspect in making the company’s internal processes more strategic. This approach to purchasing has made it more efficient for customers to make their orders, which has, in turn, resulted in a 25% increase in the purchases made through the mobile platform (Securities and Exchange Commission, 2016).
Another aspect in the measurement of Kohl’s Corporation internal processes involves an analysis of the company’s production strategies. The company, in 2015, has invested in localization, where each store tries to come up with products that are tailor-made according to preferences of customers in different locations (Securities and Exchange Commission, 2016). According to the 10-k report, this is a strategy which has improved sales, informing the desire of the company to make 90% of the stores dealing in customized items.
Learning and growth measures
Another perspective in conceptualizing performance measures touches on learning and growth. Any successful company needs to evolve, with the evolution process allowing the company to make positive changes in it6s operations (Kellen & Wolf, 2003). The goal of these measures is to guide a company towards change, innovation, and growth. In conventional methodologies of learning and growth measurement, companies primarily look into aspects such as introduction of new products and training of its staff to ensure that they gain the necessary skills to push the company in its growth agenda (Franco-Santos, Kennerley, & Micheli, 2007).
Kohl’s Corporation, in measuring its learning and growth, emphasized on changing its store formats and ensuring the hiring of quality staff. According to the company’s management, the store format that the company adopted in the past proved to be problematic. To this end, the company came up with a proposal to change the store formats, especially in regards to size and resources channeled to the stores (Securities and Exchange Commission, 2016). The proposed Omni-channel strategy is anticipated to improve the company’s business operations.
The company’s learning and growth measurement has also emphasized on the kind of staff that the company uses. The management indicated that through its “Greatness Agenda”, the company has invested in recruiting employees and teams that possess the required skills to push the company forward. The employees realized through this agenda are expected to implement the company's goals and objectives further.
Kohl’s Corporation management discusses some performance measurement practices the company employs. These can be summarized into four groups, which are: customer measures, internal processes measures, learning and growth measures and financial measures.
References
Franco-Santos, M., Kennerley, M., & Micheli, P. (2007). "Towards a definition of a business performance measurement system.". International Journal of Operations & Production Management 27(8), 784-801.
Kellen, V., & Wolf, B. (2003). "Business performance measurement.". Information Visualization 1(312), 1-36.
Securities and Exchange Commission. (2016). Kohl's 10-K For the fiscal year ended January 30, 2016. Retrieved May 23, 2016, from sec.gov: http://www.sec.gov/Archives/edgar/data/885639/000088563916000033/kohls_10kx2015.htm#sB511A3606A3F44C6FCAF3F8777B336AE
