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To overcome the auto industry upheaval, Transworld Auto Parts had to put into action its new strategy without flaws. Its CEO instructed her management team to come up with strategy maps and balanced scorecards which is foreseen to be beneficial in the implementation of each division's strategies.
V.G. Narayanan; Lisa Brem
Harvard Business Review (110027-PDF-ENG)
September 30, 2009
Case questions answered:
- Which Transworld Auto Parts' division manager performed better?
- What must each division do well to execute its strategy?
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Case answers for Transworld Auto Parts (A)
1. Which Transworld Auto Parts’ division manager performed better?
For Transworld Auto Parts’ BSC, a framework denoting the strategic theme for the company to follow is portrayed and split into four main categories of financial and non-financial perspectives and their influence on each other.
If we analyze the divisions’ performance in terms of the presented framework, then the manager from the luxury division, Mr. Eckard, performed better. The luxury division outperformed its objectives in regards to the financial perspective by surpassing its cash flow and profit objectives targets.
Therefore, applying this to the framework above, the luxury division of Transworld would have had to also implement positive initiatives across all other perspectives in order to achieve such high performance. This is also demonstrated through the fact that although Eckard’s division had had a slight drop in their quality indicators, their other non-financial measures regarding customer initiatives were almost on target.
Furthermore, financial and customer goals are lagging indicators that only improve after a strategy has been correctly implemented, thus reinforcing that Eckard has performed better in terms of…
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