Vwm Case Analysis

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Introduction and Strategy

VWM is implementing a new strategy with the objective of restoring profitability and achieve the #1 market share in Brazil by 2009. This will be done by having their highly-motivated employees work collaboratively with key suppliers, to produce high performance, competitively priced reliable vehicles that are sold and serviced through the best deal networks in Brazil. This will appeal to middle and upper-class consumers.

Analysis

The strategy map in Exhibit 4 and Balance Scorecard in Exhibit 5 help with the implementation of the new strategy. This is further discussed below in the strengths and weaknesses:

Strengths:

If one looks at the Brazilian flag, the national colors are yellow and green which are the colors used for the Customer and Financial perspectives on the strategy map. The strategy signals to employees that the company is looking to grow and prosper, much like Brazil has over the past decade as shown by them truly cementing their country in the public spotlight by hosting the World Cup in 2014 and Olympics in 2016. The competing and winning motive is reinforced by the motto that appears at the top right-hand corner of the strategy map, “Ação para Vencer” or “Act to Win,” along with another symbol, an oblong steering wheel, presented in the same four colors used for the strategy map and scorecard. The steering wheel obviously references the company’s products and suggests that the strategy map will be used to steer the company to a successful future; hence the case’s subtitle, “Driving Strategy with the Balanced Scorecard.” The strategy map is relatively simple (also, a weakness as discussed below) with 15 strategic objectives, 7 of them in the Process perspective. If any perspective is to have a disproportionate quantity (say 40 to 50%) of the map’s strategic objectives, it should be the Process perspective as it is in the VWB map. While the Financial and Customer perspectives contain the outcomes desired from the strategy, the Process objectives describe how the strategy should be implemented. The Process objectives relate more to outcomes influenced by employees’ day-to-day activities so it is desirable to have more specificity here about these drivers of success for
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The Customer metrics include “things that went wrong,” “repairs per 1000 cars sold,” and the brand’s “image quality index.” These do emphasize the importance of designing and producing vehicles with superior quality and building a strong, differentiated brand. The Process metrics include many measures on developing superior suppliers and dealers, introducing new products, and improving quality and capacity utilization. At the end of the day, however, the key to success will be much more linked to the successful implementation of the strategy rather than staking out a unique position among all existing and potential competitors that they cannot be replicated by others.

Another weakness is a large number of measures per strategic objective. General BSC guidelines suggest 1½ measures per objective, which would have 25 as a more plausible upper limit for a number of scorecard measures. With Exhibit 5 showing 44 measures VWB probably has too many. On a future iteration, the leadership team should determine which indicators are the most important for driving the strategy forward and eliminate measures on the BSC that may be best monitored within a function or area rather than at the leadership team

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