North Country Auto
Contents
1 The Case 2
1.1 Content 2
1.1.1 Background 2
1.1.2 Problems 3
1.2 Lessons 4
1.3 Case Analysis 4
1.3.1 Profitability of a transaction 4
1.3.2 Trade-in loss 5
1.3.3 UCS loses 5
1.3.4 What advice do you have for the owners regarding the new NCA structure? 6
2 Other Frameworks 6
2.1 Control 6
2.1.1 Input 6
2.1.2 Process 6
2.1.3 Output 6
2.2 Profit Plan 7
2.2.1 Profit wheel 7
2.2.2 Cash wheel 7
2.2.3 ROE wheel 7
2.3 Measuring divisional performance 7
2.4 Balanced Scorecard 8
2.5 Transfer Prices 8
2.6 Incentive system 9
2.7 Control levers to manage risk 9
2.7.1 Operations risk 9
2.7.2 Asset impairment risk 9
2.7.3 Competitive risk 9
2.7.4 Franchise risk 9
2.8 Final framework 10
3 Exhibits 10

Overview:
The link between control systems and strategy
The link between control systems and organizational structure (spans, cost/profit centers)
The choice of what to control
The profit plan
Strategic profitability analysis (SPA)
Designing asset allocation systems
Measuring divisional performance
The Balanced Scorecard (BSC)
Transfer prices (TP) – calculation of prices, which method was used?
Incentive systems
Control levers to manage risk
PM&CS as control levers
The Case
Content
Background
Company information
Centralized company
Franchised dealer and authorized service center for Ford, Saab and Volkswagen
The dealership was situated in an upstate New York town with a population of about 20.000
The company maintains its competitiveness by providing full services to its customers.
Owned as a corporation by George Liddy and Andrew Jones. Mr. Liddy focused on new and used car sales, while Mr. Jones concentrated on managing the parts, service, and body shop departments.
Industry information
Information Aggressive discounting
High inventories
More educated customer
Proliferation of new entrants