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After several discussions it was decided that TAP, which produces two types of
product lines, electronics and interior, will now focus more on two of these divisions ;
economic division and luxury division.
Furthermore, TAP is now focused on the Asia market especially for the economy
division and in the European market for the luxury division. These two divisions must
review their respective strategy, their value proposition in relation to their customers
and their positioning in the automotive industry.
By answering the following five questions, we will try to better understand the work
in its two divisions through the analysis of strategy map and balanced scorecard to
make recommendations in the management of organizational performance of TAP .
1. Identify and describe business strategies division "economy" and "luxury" of TAP.
You must describe how each division adds value to its customers and differentiates
itself from its competitors.
Having previously established that the most profitable division of TAP are the
economic division and luxury division, it is interesting to know the new business
strategy of these two divisions and see how each proposes to add value to its
customers and differentiates from its competitors.
The challenge for the new positioning of the division "economy" is to affirm this
repositioning for automobile manufacturers to acquire a certain reputation and a
reliable supplier of image that will propel TAP as one of the best manufacturer in
Asia .
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2. What factors in each division must excel lequels (key success factors) to properly
execute its strategy.
When a parent imposes requirements at one of its subsidiaries, the targets are mostly
financial. Indeed, here in the case of TAP, a target of 8% return on capital employed
(ROCE) and cash flow (cash flow) positive are imperatives to be achieved by 2011.
To do this, some key factors financial should be prioritized. First, the cost of goods
sold should be reduced gradually over a period of 3 years. Then, better use of assets
(capital assets) must be made. The ideal would be to use 90% of the asset base that
would have been reduced and improved. Finally, a reduction in the cost of the total
structure appears to be crucial to compete with competitors.
Also, to meet these requirements of the financial division, the two divisions of TAP
must be competitive in the underlying dimensions of it. It seems that efforts must be
made to: enhance product innovation, acquire new customers in markets in Asia and
Europe, and finally to improve internal processes and employee skill. Key factors that
relate to operating performance would be better coordination and management of
supplier relations-manufacturers-distributors to be "on time and we spec"
considerable investment in terms of information technology, process improvement
and equipment, which also pass through efforts in the training of employees and close
collaboration with customers (suppliers).
With respect to the economic division only, special attention is paid to
simplification and reduction of the whole division process (lean division) and the
perfect mastery of just in time that would allow the division "economy" to have a
leading position in the Asian market as a reliable provider that works with its most
important customers.
Concerning the luxury division, it must insist on innovation, creation and
development of new designs for the European market which tends to be very volatile
and unpredictable. For this, a reduction in product development time is critical. The
"luxury" division should therefore focus its investments on technology: more modern
software, prototypes and equipment acquisition and training of engineers or
technicians.
3. What a leader does a better job of executing the strategy of their division?
In view of the preliminary results obtained six months after the introduction of
strategic map (CS) and Balanced Scorecard (TBE), it seems that the "luxury" division
has done a better job of executing its strategy. Indeed, it appears that it has excelled in
the financial dimension with a cash flow and profits protruding initial expectations of
the company. But while innovation still has an important place in the division, the
quality criteria appear to have significantly reduced.
The "economy" division for its part, appears to be lagging behind and far from
achieving the financial targets set by the Ellen Bright and the parent company.
However, substantial work has been accomplished since the division recorded very
encouraging results in the process and learning dimensions.
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At first glance, so it seems fair to say that the division "luxury" filled with
brilliance the short-term objectives of the company while the "economy" division has
sought to address the long-term goals, more deep and qualitative, which would
explain its poor financial results. The "luxury" Division therefore chose to implement
its strategy from above while the "economy" division has fostered an implementation
from the bottom, longer and more expensive.
If one refers to what was said earlier about the business strategies of the two
divisions and the key factors needed to deploy these strategies, it seems that the
luxury division was more effective in a shorter time lapse , which gives it a certain
legitimacy to convince and reassure the leaders of a promising future. The "economy"
division for its part in addressing the lower dimensions of the company (and learning
process), gives the impression of wanting to lay the essential foundation for the future
and thus have crucial advantages for the -ci but not convincing in the short term from
the perspective of financial sustainability.
If we refer to Table 6 below, the report M.Hermitage Howard and Cameron
Scholey on the use of CS to increase the performance, we can say that the "economy"
division has chosen a proposal dominant value halfway between the product in terms
of leadership and operational excellence which would explain why the most affected
dimensions are the internal dimension (process) and size formation and growth. As
for the "luxury" division, we can say that the proposal was chosen dominant value
both operational excellence, the close ties with customers and leadership in products
which would explain why the size most affected is that of financial results.
4. What is the motivation of TAP to implement a strategy map and balanced scorecard?
How a balanced scorecard would be beneficial for the company and its divisions?
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strategy. A visual map showing the strategy and the causal links would be of great
help to clarify the objectives of the company. TBE, meanwhile, is interesting because
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, because understanding that
performance indicators can not be improved only after the strategy was executed
during some time, the presidents of the two divisions will focus on the development
of performance drivers who themselves have immediate effects. In fact, it is reaching
the "inducer targets" that leaders can achieve the "indicative targets".
Furthermore, as the use of TBE know the benefits in terms of transparency of the
strategy in all levels of the company which allows people at the bottom of the
hierarchy to understand what the strategy of the company and therefore to work at
their level to it (Application and implementation balanced Scorecard p. 20).
Finally, TBE can see the evolution of the strategy over time and can see the
differences between expected performance and the performance achieved
(Application and Implementation Balanced Scorecard p. 20).
5. Which of the two leaders developed better strategic map and a better balanced
scorecard? What changes would you propose the strategy and balanced scorecard of
the two divisions?
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important to remember that these results are preliminary and that the achievement of
financial targets must be done by 2011. The two divisions therefore have 3 years to
achieve ROCE of 8%. 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 even aware of all the links of cause and effect,
bibliographical sources:
CMA Canada, Marc Epstein, Jesse H. Jones, Bill Birchard, "Application and
implementation of the Balanced Scorecard" (2000), p. 20.