BA 453 – Case Briefing: Transworld Auto Parts
November 11, 2012
Company Overview: Transworld Auto Parts (TAP) is a Tier 1 manufacturer of original and after-market parts for automobile producers both in the United States and abroad. TAP focuses on manufacturing in two core product lines: electronics and interiors. Apart from that, it also separates its customer-centered divisions into four divisions: luxury, economy, mid-priced, and truck. TAP also serves in three main geographic markets including North America, Europe, and Asia. Problem Definition: Which of the two balanced scorecard approaches better illustrates how Transworld Auto Parts can improve their ROCE by 8% given the current economic downturn? Situational Analysis: Transworld Auto Parts belongs in the automobile manufacturing industry. This industry is very susceptible to industry trends and changes because much of the industry’s sales depends on the external environment which affects both consumer and supplier behavior. During 2008 when the economy experienced a global recession, many auto makers such as Chrysler and General Motors were on the brink of insolvency due to the decline in car sales. Utilizing the PESTEL framework to better understand the macro-environment, the recession reflects economic factors in the external environment which can influence the industry. The recession affected consumers in the sense that they possessed less disposable income, causing them to be less inclined to purchase new cars during this time. However, other aspects of the external environment can benefit firms within this industry. For example, with the rising automobile production in Asia, many suppliers can consider global expansion and developing sales in international markets. Many car manufacturers in Asia possess low labor costs and a great demand in local markets, so suppliers within the industry have this opportunity to expand. Not only is it important to consider the industry and...
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