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Class 14: TWA PartsV.G. Narayanan,.

Transworld Auto Parts had to implement its new strategy flawlessly to survive
the auto industry upheaval. The new CEO asked her leadership team to craft
strategy maps and balanced scorecards to help each division implement its
strategies.
The preparation questions for the case are:
1. Describe the business strategy of each division and what actions are
needed
a. Luxury
i. Innovative, quality parts
1. Get good people engineers, designers,
2. Reverse engineering
3. Invest in software - CAD/CAM
4. Prototyping
5. Partner with customers
6. Upgrade processes
7. Upgrade machinery
b. Economy
I .HQ product, Low cost/price, Asia
1. JIT processes
2. Coordination with customers
3. Redesign products to reduce costs
4. Reduce raw material costs
5. Train employees in processes
6. Gov reg
7. Capacity utilization
8. Communicate value prop
9. Find right customer.
10. Partner with suppliers

The company
Transworld Auto Parts (TAP), a subsidiary of an American company for
producing
iversifie, is a manufacturer auto equipment originating mobile (OEM) who
knows great financial difficulties caused by a slowdown in automotive
industry. L TAP's CEO, Ellen Bright, embarks changes radicals in the company
especially in terms of restructuring and redefinition of the strategy will be
crucial for the survival of TAP. After several discussions it was decided that
TAP, which produces two types of product lines, electronic and interior, will
now focus more on two of these divisions are the economics division and
luxury division. In addition, TAP focuses now on the Asian market in
particular for the division and the economy European market for luxury
division. These two divisions must review their respective strategies, their
value proposition in relation to their customers and their positioning in the
automotive industry.
By answering the five questions following we will try to better understand the
work in its two divisions moyen analysis strategic map and balanced
scorecard to establish recommendations in performance management
Organizational TAP.
1. Identify and describe business strategies of the divisions "economy" and
"luxury" of TAP. You must describe how each division adds value ASES
customers and differentiates from its competitors.
What is the motivation of TAP to implement a plan and a strategy Balanced
Scorecard? How dashboard quilibrserait beneficial for socitet its
divisions?
The literature on organizational performance measures often touted the
benefits of CS and TBE. McMann and Orlando (1998) established a list of
reasons leading creating a new system performance measures. Applied to
the case of TAP, it appears that these circumstances are the adoption of new
strategies for the divisions "luxury" and "economy" the adoption of a new
structure (reduction of 4 divisions 2 divisions) and finally that the company is
facing a strong slowdown of years the automotive industry. TAP motivation
for the implementation of a strategic plan and a TBE is explained by the
words of Ellen Bright (CEO of TAP). The latter says these tools would help to
describe the objectives to be achieved for the company to realize its
strategy. A visual map showing the strategy and links cause and effect would
be of great help clarify the goals of the company. TBE , Meanwhile, is
interesting the fact that it is "balanced". Indeed, this term indicates that the
TBE includes both financial measures but also non-financial measures which

would prevent the company from focusing too much on short-term vision or
long term.
The use of indicators and performance drivers for Ellen Bright is also a
beneficial source for the company and its divisions, for understanding that
performance indicators can not be improved after the strategy has been
implemented for some time, the presidents of the two divisions can focus
Development of Performance Drivers that they have immediate effects. In
fact, it's reaching the "inducer targets" that leaders can achieve the
"indicative targets".
On the other hand, the use of TBE also known in term benefits transparency
of strategy in all levels of the enterprise which enables people at the bottom
of the hierarchy understand what the strategy of the company and therefore
to work at their level to it (and Application implementation of the Balanced
Scorecard p. 20).
Finally, TBE can see the evolution of the strategy over time and lets you see
the discrepancies between expected performance and the performance
achieved (Application and implementation of the Balanced Scorecard p. 20 ).
2. Which of the two leaders dveloppune better and better strategy map
balanced scorecard? What changes would you propose Ala strategy and
balanced scorecard of the two divisions?
Question 3 and Question 5 are closely related. By resuming brought about in
Question 3, it would seem that both divisions have performed well but at
different levels. The luxury division has managed to surpass the financial
targets imposed in a very short period of time (six months), while the
economics division performed better in lower hierarchy dimensions such as
process and learning objectives which are in the longer term. It is therefore
difficult
to decide to either division. For this, analyze
CSs and TBES made by both divisions. The "economy" division adopted the
method "
one thing at a time "and made
selecting a smaller number of indicators and performance drivers. It would
be
tempting to say that this method is good in the sight of the financial
performance achieved. However, putting in parralle TBE and CS with the
proposal of dominant value chosen by the division "economy", we can see
that this value proposition is not clearly transcribed in

CS in either the TBE. It is therefore difficult to understand by what link of


cause and effect that division was able to achieve such significant financial
results. Similarly, key success factors proposed by TAP leaders for this
division are very present in the TBE at
except the innovation factor.
The "luxury" division at
Conversely, adopted the method of "better too much than not enough."
Indeed, the CS of this division recognizes a multitude of cause and effect
links that are crucial levers for the implementation of its strategy. Although
the financial results is not convincing, the proposed chosen dominant value
seems to be more in line with the CS and TBE on which it is easy to recognize
the key success factors mentioned above for this division. These are clearly
legible on both tools, we understand better why financial results are not at
the rendezvous. Indeed, 8
Investments by the "economy" division in the process dimensions
and growth and learning so
nt important and take longer to be felt in the financial results. To summarize,
the division "economy" has made better use of the tools of organizational
performance measures and better recognizing the causal links effects and
performance drivers needed to conduct its strategy. It is important to
remember that these results are preliminary and
that achieving the financial objectives must be done by 2011. The two
divisions
So three years to reach the 8% ROCE. The division "economy" which still
slightly improved its ROCE (-15% to -12%), so still has the time to let the
performance drivers do their job to improve their financial results. However,
for the division "luxury
"That does not really
yet aware of all the links of cause and effect, it is essential to rework the CS
and TBE to make the necessary changes and align its goals with its proposal
dominant value.