Question

Compton Associates is an architectural firm that has been in practice only a few years. Because it is a relatively new firm, the market for the firm's services is very competitive. To compete successfully, Compton must deliver quality services at a low cost. Compton presents the following data for 2016 and 2017.Compton Associates is an architectural firm that has been inArchitect labor-hour costs are variable costs. Architect support costs for each year depend on the Architect support capacity that Compton chooses to maintain each year (that is, the number of jobs it can do each year). Architect support costs do not vary with the actual number of jobs done that year.Required1. Is Compton Associate's strategy one of product differentiation or cost leadership? Explain briefly.2. Describe key measures you would include in Compton's balanced scorecard and your reasons for doing so.

Answer 1

Compton Associates employs a cost leadership strategy by aiming to deliver quality services at a low cost. For their balanced scorecard, measures would include financial efficiency, customer satisfaction, operational efficiency, and employee development.

Step-by-step explanation:

Compton Associate's Business Strategy

The strategy of Compton Associates is primarily focused on cost leadership. The firm aims to provide quality services at a low cost in a competitive market. This involves minimizing costs to offer competitive pricing, which is characteristic of a cost leadership strategy rather than a strategy of product differentiation that would focus on unique services or features to justify higher prices.

Measures for Compton's Balanced Scorecard

To align with Compton's cost leadership strategy, key measures on the balanced scorecard would emphasize cost control, efficiency, and market competitiveness. Examples include:

Learning and Growth: Employee training hours and employee turnover rates to ensure a skilled and stable workforce.

These measures provide a comprehensive view of the firm's performance and areas for improvement in relation to its cost leadership strategy.