Dont Read

In: Business and Management

Submitted By Johns2132
Words 6187
Pages 25
9-111-049
REV: DECEMBER 20, 2010

ROBERT S. KAPLAN
RICARDO REISEN DE PINHO

Volkswagen do Brasil: Driving Strategy with the
Balanced Scorecard
Thomas Schmall, CEO of Volkswagen do Brasil (VWB), studied the color-coded charts and
indicators on his wall. The data showed financial, customer, process, and employee performance
through end-of-year 2008. Schmall a nd his management team had introduced the Balanced Scorecard
in 2007 as part of a program to reverse eight consecutive years of market share declines and financial
losses. So far, the turnaround had been successful. The new enthusiasm among the workforce,
consumers, suppliers, and dealers had led to strong sales increases and a return to profitability.
But Schmall, in January 2009, could now see the impact of the global financial crisis. Sales had
th
plummeted in the 4 quarter and newly-produced vehicles were parked around VWB’s plants
waiting for consumers to begin spending again (see Exhibit 1 for VWB’s monthly sales). Many of the
previously green marks on sales and profitability on Schmall’s scorecard had turned yellow and red.
During the previous two months VWB had responded quickly to the slowdown in consumer
purchasing by cutting back production and reducing spending.
Schmall was cautious about whether it was time to restore funding or wait until sales recovered
before gearing up production schedules and resuming the spending on discretionary programs.
Further cutbacks in production schedules and investment would jeopardize plans for market share
expansion and new product development. VWB, located far from the company headquarters in
Wolfsburg, Germany, had considerable discretion for local, short-term decisions. The general rule
from corporate headquarters came from a German expression, whose English translation was, “Drive
as fast as you can see.” Schmall wondered whether the VWB…...

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