Management of Global CV Companies

Question 1

Truck platooning

Answer 1

Truck platooning is when trucks travel together connected by a computer system

Question 2

How to manage a global CV company?

Answer 2

Core activities are target setting and steering of operations and investments

1. Target setting
2. Reporting and steering

Question 3

How is target setting done?

Answer 3

Target setting is based on three pillars and broken down to units and regions

Question 4

What does reporting and steering provide?

Answer 4

Reporting and steering provides transparency needed to reach targets

Question 5

Three pillars of target setting?

Answer 5

• Business model targets
• Brands’ operative targets
• Program targets

Question 6

Business model targets

Answer 6

Top-down target setting

• EBIT and RoS ambition over the cycle
• Market share
• Target contribution margins
• fixed costs

Question 7

contribution margin

Answer 7

The contribution margin is computed as the selling price per unit, minus the variable cost per unit.

Question 8

Brands’ operative targets

Answer 8

Bottom-up planning

• concrete EBIT and RoS in year x
• Budgets and FTE per cost center

Question 9

Program targets

Answer 9

matching process & program design

• program gap between year x target and operative planning?
• gap includes anticipated positive negative effects?
• benefits to be delivered by program?

Question 10

Where does the delta come from between top-down yearly target line and top-down target over the cycle?

Answer 10

• development in core markets

- changes in FX-rates

Question 11

Where does the delta come from between top-down yearly target line and bottom-up operative planning?

Answer 11

• price realization

- FC and VC differences

Question 12

What allows flexible reaction to market developments in a stringent process?

Answer 12

Planning based on business value drivers

Question 13

Which truck group has the largest sales in B?

Answer 13

Daimler ( 40b€) and Volvo (26b€)

- Man and scania are more around (14b€)

Question 14

What are return on sales for 2019?

Answer 14

• for MAN around 5% for Daimler like 7%, Scania like 10%

(Net profit margin (also known as “return on sales”) is a profitability ratio that measures the percentage of net income to sales.)

Question 15

What do stress levels depend on?

Answer 15

Gaps between top-down and bottom-up targets formulate stress level

–> specific program required

Question 16

What is overall performance dependent on?

Answer 16

• Market development
• Sales performance
• Target cost
• Program implementation

Question 17

What overview does the truck holding have?

Answer 17

• strategic view and overall control of the Group’s target achievement
• transparency across brands’ performance and synergies between brands

Question 18

What overview do the brands have?

Answer 18

• operative steering

- transparency across operative indicators to mitigate risk

Question 19

Should there be one global cockpit?

Answer 19

Yes one global cockpit focusing on core KPIs to steer the holding and its entities.
- It should be multi-level

Question 20

Three organizational levels?

Answer 20

Tuck holding
Brands
Functions

Question 21

What should be broken down to the brand level?

Answer 21

• top-down and year-specific target lines