CASE STUDY

LOPTEN
CASE HISTORY:
Lopten Industries is one of the largest, listed consumer durables manufacturers in the world,
making washing machines, tumble dryers and dishwashers. It has recently expanded into
Beeland which is a developing country where incomes have risen to the point where demand is
increasing for Lopten's goods among the growing middleclass population. Lopten believes in
the economies of scale of large manufacturing sites with dispersed selling branches in the
markets in which it operates. Therefore, it has entered the Beeland market by setting up a local
sales force and supporting them with a national marketing campaign.
ISSUES AT HAND:
The government has given incentives to an foreign manufacturer who established a Beeland
plant. However, since Lopten produces its washing machines at its regional hub in Kayland, it is
not eligible to receive a similar grant. The impact of government grants is difficult for KPIs to
measure directly, but the sales price of the KPIs can show whether the grants have made it
more affordable for the competition to sell the machines. Such a change could have adverse
consequences on the average price of the products of competitors, if the Government imposes
import tariffs.
FACTS AND FIGURES:

1|Page
ALTERNATIVES:
In general, financial performance measures tend to be backward rather than prospective in the
sense that the actual performance achieved is used to compare some sort of budget or goal. Of
example KPIs are likely to be more accurate of 'Contribution per function' and 'ROCE.' for
performance controlling.
However, Lopten should look at measuring actual performance against budgets or forecasts in
order to monitor its control indicators effectively. At present only real success seems to be
tracked without any connection to a schedule or to previous years. However, it will be helped
to identify those areas in which corrective action might be needed to improve performance in
order to measure actual performances.
RECOMMENDATIONS:
Present KPIs of Lopten rely mainly on individual success variables, rather than on internal and
external influences. Moreover, the connection between KPIs and CSFs in Lopten – especially the
need to have a The dominant presence on the market seems relatively weak.
At present, rather than planning the KPIs seem to be focused on control, while the board
should ideally focus more forward-looking. To deal with them, the Board should review the KPIs
used.

2|Page