Volkswagen do Brasil
Presented To : Dr . Khaled Hegazy
Presented By: Mona Abdallah
Student ID : 131239
• Company background
• Volkswagen do Brasil
• Challenges Thomas Schmall faceed upon becoming CEO
of Volkswagen do Brasil (VWB)
• VWB’s new strategy
• Role of strategy map and Balanced Scorecard in the new
• Strengths and weaknesses of the scorecard
• Using the scorecard to deal with the challenges faced by the company in January 2009
370 000 Employees world wide
61 Production facility
Across 21 countries
6.3 M Vehicles
across 10 brands
10.3% Market Share
113 Billion Revenue
Fifth largest land area and population
World ninth largest economy
Recently is the largest and most diversified
economy in Latin America
Volkswagen do Brasil
• VWB was the third largest in the VWAG system behind China and Germany • Operated four plants
• Employed about 22000 employees
• Produced revenues of 7.04 billion
• Focused on small and medium sized vehicles and offered 22 different models
• Had the most complete portfolio within Brazilian market.
Challenges Thomas Schmall faced upon becoming CEO of
Volkswagen do Brasil (VWB):
Vast decrease in domestic market
Suppliers and dealers efficiency
Failure to stick to export –led strategy as a
result of the appreciation of the Brazilian
currency relative to the dollar and euro ,
plus the increase in the local labor and raw
Culture and strategic change, Changing the
mindset of employees
VWB couldn’t increase prices on shipped
products due to tough competition in the
automotive world-wide because of this
company’s excess capacity costs wouldn’t
be covered by insufficient export margins.
Inefficient processes on the shop-floor and
i.e employees commitment and
i.e reliance on cost reduction, employees
layoff and capacity downsizing.
VWB’s new strategy
The main aim of VWB new strategy is to regain position as market leader in Brazil and strived for number1 producer of the South American automotive market through achieving the following objectives :
Build high performance team that would drive VWB to become industry’s leader in quality, innovation, sales and profitability on sustainable basis.
Re-Branding VWB into one with enthusiastic and highly-motivated employees.
Develop new culture for employees to solve problems as they arose, eliminate defects and reduce health and safety incidents .
Build new relationships with key stakeholders: employees , suppliers and dealers.
Role of strategy map and Balanced Scorecard in
the new strategy:
• The 2 tools helped translating the strategy into objectives, monitor progress and display the correlation between cause and effect. For example strategy map helped filtering out four dimensions :
Internal Processes Challenge
Positional and Growth Challenge
Also it displays how intangible assets such as employees get converted into tangible financial results. It translated high level objectives into clear tasks that can be realized and supervised efficiently • The BSC was the perfect tool to measure, define and monitor outcome: For example :
- All challenges inherited an objective, scope and the right metrics to review the current status. This was extended within the entire company for all objectives and shop floor employees could immediately display the actual status of their work.
- When problems occurred they could identified in a quickly manner and the responsible project team could work on a solution with shop floor workers and the responsible coordinator.
This open door policy of management reduced production shutdowns significantly and reduced resulting costs.
Strengths and weaknesses of the scorecard
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