Strategic Project Management

Strategic Project Management
School of Engineering University of Central Lancashire
BN4440
Background
Tyre & Wheel N S Pty Ltd Victoria is a subsidiary of the mammoth agro-industrial enterprise N
and S Ltd. With a workforce of 300 people the car tyre factory shares in £3bn capital. In the recent
past, the company poor performance returns a slump in overall competitive advantage. A primary
issue is that the strategic picture in mind is different between the senior management and middle
management.

Subsequent the fresh appointment of the General Manager is the study conclusion that about 95
percent of all workers fail to appreciate the organisation's strategy. Due the leadership change in
priority the adoption of the Balanced Scorecard or BSC tool such to raise company performance is
passed.
Introduction and Context
The landscape of the world automotive industry reveals extreme competition and low
profitability (STURGEON, T. and van Biesebroeck, J., 2009). The industry blatantly opposes
competitive equilibrium as it is highly regulated. Regulatory measures are primarily in terms of
trade and environment (KPMG INTERNATIONAL , 2010).
This trade protectionism curtails the threat of substitution by way of import quotas and tariffs,
administrative barriers and subsidies. Government subsidies have reached millions of dollars in
Australia 1966M, Germany 1303M and 2908M in America (RAMEY, V. and Vine, D., 2015).
All these dampen opportunities from emerging regional markets, while leading production
locations become burdened by overcapacity: Germany and Italy, France and Australia, USA and
Japan (KIM, W. C. and Mauborgne, R., 2014).
In the category of environment protection, the Energy and Conservation Act of 1975 costs
roughly USD 2000 on compliance per manufactured unit. These aside the high cost on advertising,
development research and worrying labour unrest (TECHNOASSOCIATES, INC., 2013).
Without doubt, the automobile industry is fragmented. The complete value chain stretches into
other industries such as tyres and gas-stations, services and accessories, aluminium and glass,
computer chips and, iron, plastic and rubber, steel and textiles (AUTOMOTIVE INDUSTRY CENTER
FOR EXCELLENCE, 2019). Products cater to niche markets and manufacturers are thinly spread all
the more since production entails specialty knowledge and expensive tools (GREENBER, K., 2003 ).
As it is, there is no single company controlling enough market shares to influence business
decisions of the industry for radical transitions that many small outfits close shop over prolonged
business slowdown.
Tire souk of Australia is prediction to stretch AUD 5.2 Bn by 2021. The reasoning derives from
replacement demand which is up, the broadened vehicle fleet size, expanding urbanisation and the
fast paced infrastructure developments (TYRE IMPLEMENTATION WORKING GROUP , 2012).
Government 2016 infrastructure plan centred on the removal of infrastructure gaps and as well as
the refinement of connectivity between road, rail and ports. This shall fuel the demand for through
2021.
Automobile revenues in Australia are up 3 percent between 2011and 2015, from 1.12 million
units to 1.26 million units respectively. Transport fleet size in Australia has broadened between
2011 and 2015 from 15.19 million units to 18.01 million units respectively (HYDER, V., 2012).
The passenger car tire segment dominates the Australia tire market and is trailed by the light
commercial vehicle tire segment. Logistics and built environment activity is up, and is thought to
drive the demand for medium to heavy commercial vehicles (CHOCOTEUA, V., Drake, D.,
Kleindorfer, P., Orsato, R., Roset, A., 2011)
Online portals include Bob Jane, Tyreright, St George Tyres and international companies such as
Bridgestone, Goodyear, Dunlop and Yokohoma (THE FREEDONIA GROUP, 2012).
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COMPETITIVE
RIVALRY
Weak industry leadership because it
is fragmented with no sole enterprise
in control of the market share,
depicting an Oligopolistic market
structure
THREAT OF ENTRY
Potential Entrants
Industry entry barrier is described as
liberal with high exit barrier due to
high capitalisation. Developed
regions own the market
concentration showing emerging
markets at the lower segments of the
pyramid to be neglected
CONSUMER
POWER
MERCHANT
POWER
THREAT OF
SUBSTITUTION
Numerous choices, few
buyers. High consumer
power in the industry with the
freedom to shift to competitor
options. Industry Oligopolistic
structure is in favour of the
consumer
Strong trade protectionism results an
overcapacity of dominant players. Lack
of international cooperation. Cheaper
alternatives have taken clout of new
emerging markets. Government
combined subsidy in 26 nations totals
US$430 bn
World Automobile and Tyre Industry
Analysis
Trade policy curtail choices and
coverage of merchants
Merchant cost on regulatory
compliance totals about
US$2000 per unit manufactured,
in addition to obscene
advertising cost. Many small
merchant close shop under
prolonged periods in slack
Balanced Scorecards
The rudimentary innovative feature of the Balanced Score Card is the strategic learning that
enables broader sense and vision of organisation performance. Performance measure is examined
across four perspectives: Financial, Consumer, Internal procedures, and Learning and growth. As
such, the Balanced Score Card renders as an ideal tool for change management because this
provides a structure for future organisation success (Kaplan & Norton 2007b). By way of the
Balanced Score Card, the ability of organisation to achieve a strategic goal is enhanced, as its
structure provides consistency and focus on specific issues that ought to be addressed, at the same
time a holistic vision turn out to be attainable.
The Balanced Score Card provides control and coherence of strategic dimensions; and facilitates
communication and feedback (NEELY, A., Kennerley, M. and Martinez, V., 2014). The adaptation of
the Balanced Score Card empowers the worker with sense of ownership of company goals; and
creates an opportunity for systematic learning by sheer definition of critical success factors
(NAGUMO, T. and Donlon, B. S., 2016). Using BSC encourages results oriented work and focus on
strategic priorities and transforms the mission and strategy into tangible activities and indicators.
The tool further enables synergy through the alignment of individual and department objectives
with the business strategy (LIPE, M. G. and Salterio, S. E., 2010). These result in continuous
improvement and confidence in the performance compensation scheme.
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Consumer Perspective
The way a customer perceives a business organisation or a product, is what gains market share
and company reputation. By turning the table around, one peeks into what matter to the customer
that brings satisfaction, because bad feedback can drastically impact on an organisation bottom line
and strategic success (BANCHIERI, L.C., Planas, F.C., and Rebull, M.V.S., 2011). For such reason
consumer satisfaction ranks second on the Balanced Scorecard. The most common metrics across
industries are consumer satisfaction and enterprise responsiveness (ALI, I., Alvi, A. K. and Ali, R.R.,
2012).
The idea is simple: A happy consumer readily buys products and services. Therefore there is a
need to understand the consumer in order to make one happy (BUSCO, C., and Quattrone, P., 2014).
Figure out what the consumer wants in a tire to raise the chance of repeat transaction and brand
identification. By using the tool, describe the organisation objectives from the perspective of the
consumer (ANTONSEN, Y., 2014). Validate the opinion through industry reviews on purchasing
behaviour or price sensitivity, look into industry trends or Government surveys.
Financial Perspective
Business strategies executed for financial management are particularly to raise financial vitality.
That is, the financial fitness of any business is critical to long-term existence. Distinctive methods
used by organisations comprise return on equity, revenue growth and operating income (NIVEN, P.
R., 2011). The fundamental objective is to maximise gain and minimise the cost, at the same time
expanding revenue sources. Clientele forms the basic revenue of the business (DARDIS, F. and
Haigh, M., 2009). Consumers are picky on price with determination of value for money. Motorists
mean to buy reasonably cheap tyres but expect them to be durable, thus financial brilliance is
essential (BARNEY, J., 2010).
The Balanced Scorecard financial perspective basically comprises lagging indicators. These are
not forecasts of what is to happen, but these s, it state what has happened. In which case, activities
are not always associated to this perspective (JENSEN, P., 2009).
Internal Business Perspective
Procedures codification is critical for the delivery of customer satisfaction and financial goals. In
which case, process improvements can tantamount to quality optimisation or capacity
improvement, otherwise address issues such as, manufacturing waste reduction or adaptation of
specific technology (FORTUNATO, J., 2009).
The Internal Business Perspective allows for the clear understanding of the outcomes and
impact of each internal processes and supporting technologies. Manufacturing outfits track the
duration of setup, production cycle and yield, and on occasion new technology is introduced for
purpose of streamlining these processes (BARNABÈ, F. and Busco, C., 2012).
The internal perspective covers a broad spectrum to include: people skills, talent and
knowledge, leadership and teamwork.
Innovative and Learning Perspective
Learning and Growth is dubbed as the Organisation Capacity. This perspective thought as people
by enterprises presume humans are most important aspect of the business capacity to improve.
This perspective reflects the level to which an establishment can evolve and advance in the manner
it supports organisation goals (HOQUE, Z., 2014).
Learning and Growth or Organisation capacity monitors people and culture, organisation and
support mechanisms. Worker performance and behaviour is used to evaluate contentment and
sense of achievement, turnover rate and the quality of applicant further characterise this segment
(KAPLAN, R.S., 2012).
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