12-26 Strategy, balanced scorecard, service company. Southland Corporation is a small informationsystemsconsulting firm that specializes in helping companies implement standard sales-managementsoftware. The market for Southland’s services is very competitive. To compete successfully, Southland mustdeliver quality service at a low cost. Southland presents the following data for 2012 and 2013.2012 20131. Number of jobs billed 40 552. Selling price per job $45,000 $42,0003. Software-implementation labor-hours 25,000 28,0004. Cost per software-implementation labor-hour $58 $605. Software-implementation support capacity (number of jobs it can do) 70 706. Total cost of software-implementation support $224,000 $252,0007. Software-implementation support-capacity cost per job (row 6 , row 5) $3,200 $3,600Software-implementation labor-hour costs are variable costs. Software-implementation support costs foreach year depend on the software-implementation support capacity Southland chooses to maintain eachyear (that is, the number of jobs it can do each year). Software-implementation support costs do not varywith the actual number of jobs done that year.1. Is Southland Corporation’s strategy one of product differentiation or cost leadership? Explain briefly.2. Describe key measures you would include in Southland’s balanced scorecard and your reasons for doing so.
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