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Illustrative case study 407
importance of the range (or ‘swing’) between the worst and best performances
on the different objectives. Comparing these ‘0 to 100 ′ swings
in scores for the objectives of the national mail company leads to the
following ranks:
Swing Rank
(1 = most important swing)
Worst long-term profit to best 1
Least market share to highest 2
Least flexibility to most 3
Least growth to highest 4
Worst short-term profit to best 5
(b) Attach a weight of 100 to the most important swing and compare it with
theimportanceoftheotherswingsona0to100scale
The weights assessed for the mail company are given below. For ease of
calculation it is conventional to normalize the weights so that they sum
to 100. This is achieved by simply dividing each weight by the sum of
the weights and multiplying by 100.
Swing Weight Normalized weights
Worst long-term profit to best 100 50
Least market share to highest 40 20
Least flexibility to most 30 15
Least growth to highest 20 10
Worst short-term profit to best 10 5
Sum 200 100
Stage 8 Obtain an aggregate score for each strategy-scenario
combination
For each scenario, an aggregate score can now be obtained to measure the
performance of a given strategy over all the objectives. This is calculated
by multiplying the score for each objective by the normalized weight for
that objective, summing the resulting products and dividing by 100. For
example, the performance of the STATUS QUO strategy in the MAIL
MOUNTAIN scenario is calculated as follows: