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Copy of volkswagen do Brazil
Transcript of Copy of volkswagen do Brazil
Carolina Mariño FACULTAD DE CIENCIAS ECONÓMICAS Y ADMINISTRATIVAS CLASS: Strategy in action. TEACHER: Sandra Jenina Sanchez. CASE: VOLKSWAGEN DO BRASIL Driving Strategy with the Balanced Scorecard 370.000 Employees Worldwide 61 Production facilities across 21 countries 151 Countries 10 Brands 6.3 million vehicles sold The Automotive Landscape in Brazil (cc) image by nuonsolarteam on Flickr It had the 5th largest land area and population It had the world's 9th largest economy Recently is the largest and most diversified economy in Latin America The automotive sector produced 19% of their GDP. +1.5 million of employes in +200,000 companies Brazil had a TIP capacity of 4 million vehicles per year Total revenue of $74 billion per year 6th largest producer of passenger vehicles 5th largest consumer market GLOBALLY Market share of 10.3% Revenues of €113 billion from sales Automotive Industry Volkswagen do Brazil VWB was the 3rd largest in the VWAG system behind China and Germany. It operated four plants. VWB produced revenues of €7.04 billion It employed about 22,000 people It's focused on small and medium sized vehicles VWB had the most complete portfolio within the brazilian market It offered 22 different models It has a modern product design prototype center located in Sao Paulo. 1953 Timeline Volkswagen do Brazil 1956 1st plant outside Germany Ipiringa VWB started with 12 employees 1969 50% produced in Brazil VWB had earned a 61% share of Brazil's car production 1970's Launched medium sized cars for export created the first ethanol-fueled vehicle 1990's 1986 20% of domestic automotive market Overcapacity and macroeconomic situation Brazilian production output
(# of vehicles) 1.1 million
(1993) 1.1 million
(1999) 1.6 million
(1997) several regional & global crisis (2003) VWB SALES 580.000
30% mkt. share (2003)
21% share Emphasis in exports 45.000 164.000 But... Why export strategy was defeated? appreciation of the brazilian currency Increases in the local labor costs increases in raw materials costs Intense competition in global markets export margins failed to cover the excess capacity costs Since 1999 until 2007, VWB faced market share decline and financial losses. Schmall and his management team started introducing balanced scorecard to monitor and analyzed the root cause of those problems. Vision Build a high performance team that would drive VWB to become the South American industry's leader in quality, innovation, sales, and profitability on a sustainable basis. Goal: Re-brand VWB into one with enthusiastic and highly-motivated employees to achieve high performance Objectives To change VWB's bureaucratic and slow moving culture change the mindset of the company accelerate the adoption of a new strategy and culture develop and sustain improved performance Enlarge markets , improve processes and innovate in new products Enable the company to regain its #1 market position in Brazil BSC & Strategy map The BSC was based on a strategic map which had the power to decode high-level objectives into operational terms that mobilize their employees teams. The industry was highly volatile Feedback and learning Communicating and linking Business Planning Balanced Scorecard Translating the vision Continuing with the strategic map and scorecard communication.
Make activities and games to reassure the strategy for the employees, board games and role play games.
The Strategic map has also been introduced in the production line.
Run workshops at which employees could discuss what the new strategy and new culture represents to them. Increase market share growth at least to 25%
Be viewed as the top employer, and earn the industry´s top rating for customer satisfaction and process quality.
Continue with the highly-motivated employees to improve the % of annual sales.
New culture for employees to solve problems, eliminate defects, and reduce health and safety incidents.
Reeducate VWB management team to spend money wisely.
Improve relationships with the key stakeholders, employees, suppliers and dealers, to reduce transaction costs.
The executives developed action plans, detailing a department for a specific achievement. Annual contest, which recognized the best project submitted.
BSC report system monitored and reported monthly on the status of each measure and initiative.
VWB developed a matrix that related each objective with actions to be implemented by each area. Personal objectives linked to area and company strategic priorities in the way.
Each division determines why the strategy is or is not working at each organizational level. Maintain the current strategy of product development to achieve the market share growth and achieve sustainable and positive financial results.
Strengthen the current BSC, adding goals that match the current state of decline in sales. Key problem... Should cut back production levels and funding for strategy initiatives until sales recover, or should it continue to invest for the future?
Strategic map... Internal processes challenges Customer challenges Financial Challenges Potential and Growth challenges Thanks for your attention!!!