When a vehicle is built, it contains parts produced by the original equipment manufacturer (OEM). When these parts need to be replaced, consumers often purchase after-market parts instead of OEM replacement parts because they may be cheaper or of better quality, and may enhance the performance or appearance of the vehicle. VSC Parts Ltd. is an after-market automotive parts manufacturer established in 2005. It’s shares were listed on the London Stock Exchange as of 2019. The corporation’s headquarters are located in Reading, UK. It has manufacturing plants in Reading and four other UK and France locations. Each location is organized as a separate division. The corporation manufactures electrical components and provides parts to UK and French national retail chains that specialize in providing both sound advice and reliable parts to clients with higher-than-average disposable incomes, like car and truck hobbyists, as well as heavy truck fleet owners. It has several regional warehouses and divisional offices across UK and the France. It has a reputation for producing high quality parts that are innovative, reliable, and efficient, and backing what it sells through a generous warranty and refund policy.

VSC has weathered a recent economic downturn well enough. Demand for its type of electrical auto parts has remained relatively strong. The corporation has two main competitors, both headquartered in the Europe. Though still ranked as the number one after-market electronic parts supplier in UK in terms of total sales dollars and number four in the France, its competitors are slowly gaining ground. VSC is considered well-managed and is respected for the high quality of its electrical components. It does not compete by supplying a full range of after-market automotive products, but by identifying new niche markets for electrical components and leveraging its product line by continually searching for innovations in design and performance.

VSC has maintained very good relations with its suppliers and retail chains. These chains actively promote the brand as good value for money and provide valuable feedback to VSC about retail customer purchasing trends and requests for new products. Unlike its competitors, the VSC sales force is well-trained to not only sell existing products, but to glean new ideas from customers and communicate these back to VSC management for consideration.

The corporation recognizes that long-term success largely depends on continued promotion of VSC products by these retail chains, which means that the chains must be able to continue to earn high gross profit on sales of these same products. However, increased competition from lower-priced electrical components produced by VSC’s Far East competitors has begun to cut into VSC’s sales and profit margins. In the past, VSC has relied on research and development and the North American patent process to maintain its market share. A few extremely successful product innovations were responsible for most of the past sales and profit levels. However, increased complexity of component design has created longer timelines to move new products from conception to production. Also, at least one of its competitors’ activities border on patent infringement, but legal remedies are costly, time-consuming, and often unsatisfactory.

VSC’s manufacturing facilities and processes are state-of-the-art. Once products have been successfully designed and tested, they are able to be manufactured very quickly and inexpensively, and in small batches. VSC’s distribution costs are lower than competitors because its manufacturing plants are closer to customers. In recent years, the threat of shortages of rare, very expensive metals used in the manufacture of many of its products has required the corporation to increase its raw materials inventories. Rapidly developing economies, particularly China, are demanding increasing amounts of these precious metals, and have begun to lock up supplies from African producers.

Required:

1. Prepare a strategy map for VSC Auto Parts Ltd. Show specific cause-and-effect relationships among the objectives. Identify at least two objectives for each of the four perspectives.

2. Prepare a balanced scorecard for VSC Auto Parts Ltd. that flows logically from your responses to part 1. Provide two performance measures for each objective.