Strategic Management Case Over the Last 20 Essay

Excerpt from Essay :

Strategic Management Case

Over the last 20 years, the Balance Scorecard has been used as an approach by corporations to improve their competitiveness and ability to adapt to changes inside the industry. This is based on several fundamental principles to include: financial, the internal business process, learning / growth and the customer. Financial is when the firm is looking at tactics that will measure the monetary impact of the strategy on the organization. The basic idea is to be able to understand shareholders views of management and the company. The internal business process is when executives are examining various strategies inside the firm that will help them to become better in delivering products to customers and achieving the goals of shareholders. Learning & growth is when there is a focus on improving and creating value for different stakeholders. The customer is when management is concentrating on consumer perceptions and how they are impacting the organization. These elements are important, because the combination of them is providing a basic foundation for helping to identify problems and quickly adapt to transformations. ("Balance Scorecard Basics," 2011)

In the case of Porsche, they used this strategy to allow the company to redefine itself and the way it reaches out to customers. To fully understand what is happening requires examining the current strategy of the firm and possible alternatives for dealing with any issues. This is when we can offer specific insights about how the Balanced Scorecard approach can help a business to address the various challenges they are facing. (Carpenter, 2009, pp. 761 -- 767)

The Current Situation at Porsche

Porsche had tremendous success during the 1980's. This is from their unique designs and the experience for most customers using their products. The problem was that the company started to see a loss of influence among their core demographic of consumers (the affluent). This is from other companies introducing SUV's, sedans and sport cars. The fear at Porsche was that the company needed to adapt to these changes to remain competitive. Otherwise, the brand name and image would suffer. To prevent this from happening, executives decided to use the Balance Scorecard approach. (Carpenter, 2009, pp. 761 -- 767)

The way that this was accomplished is to utilize the knowledge at many dealerships around the world to improve the overall quality of products and services. The problem was that this idea needed to be tested. To achieve this objective, the company decided to use this approach in dealerships located in France, Italy and England. This was close enough to the firm's headquarters in Germany that management could make adjustments to the strategy. (Carpenter, 2009, pp. 761 -- 767)

Once the plan was implemented, is when there would be challenges from existing employees who did not embrace these changes. Instead, they wanted to keep the status quo in place and wanted to ensure that the working environment remained the same. While at other times, select dealers began to embrace the strategy and transformations. At the heart of this system, was a critical tool implemented into the system called Key Performance Indicators. The basic idea behind this approach was to understand all of the data from each dealership using one standard formula. This offered Porsche a number of advantages including: the dealership could evaluate performance beyond financial figures, it improved communication between dealerships / headquarters and the profit margins for the entire sales network would improve. These elements are important, because they are showing how this tool would increase the collaboration and effectiveness of the entire firm. This is when the company can adapt to changes in the markets and quickly respond to customer issues. (Carpenter, 2009, pp. 761 -- 767)

When the plan was being rolled out, many dealerships had to make a tremendous amount of adjustments. This is because there were certain procedures that had been established (which were designed to improve communication at the dealership). While at the same time, many training manuals and key information was missing on new models that were being introduced. To address these issues, the company had a consultant that would spend time inside each dealership. Their responsibility was to help implement the new policies and procedures inside every location. To do this, consultants worked closely with managers inside the dealership. This helped them to see…

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