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Table of Contents

Introduction...............................................................................................................1
Volkswagen: Mission.............................................................................................1
Volkswagen:Vision.................................................................................................2
Volkswagen- History.................................................................................................2
Development o !roduct............................................................................................2
"perations..................................................................................................................#
Human $esource Management..................................................................................#
Marketing and %ales..................................................................................................#
%&"' (nalysis o Volkswagen................................................................................)
(nalysis o *ompetitive %trategy..............................................................................+
Value c,ain (nalysis o Volkswagen.........................................................................-
',e %trategy clock or Volkswagen............................................................................
*onclusion and $ecommendations............................................................................
$eerences................................................................................................................./
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Introduction
',e purpose o t,is report is to analy0e and outline t,e approac,es o strategic management o
Volkswagen. ',is report also ocuses on various ways in w,ic, Volkswagen makes way t,roug,
t,e competition and is counted in one o t,e leaders in t,e ield. ',e report includes an
introduction into t,e mission1 vision1 ,istory1 development o product1 porter2s + orces model1
value c,ain as well as an insig,t into t,e strategic clock o Volkswagen. &it, an insig,t into t,e
mentioned topics1 t,e report concludes itsel wit, various recommendations or t,e organi0ation
in order to make t,e organi0ation yield results 3etter t,an w,at it is yielding 3y ollowing t,e
strategies.
Volkswagen: Mission
Volkswagen (uto 4uropa ,as always strived to ac,ieve e5cellence in maintaining t,e en,anced
6uality o manuacture t,at it oers to its customers in t,e orm o its product t,at is cars. ',e
organi0ation is well aware o t,e eature t,at in order to ac,ieve success in an environment
w,ere competition is increasing day 3y day1 depends on t,e 6uality o t,e product oered. ',is is
t,e p,ilosop,y o success or Volkswagen. ',e organi0ation urt,er 3elieves in managing t,is
c,allenge 3y integration1 respect to its customers1 ollowing a teamwork w,ic, is e5cellent1
always 3eing responsi3le in autonomy and ollowing a notion outlined 3y e5cellent skills o
leaders,ip as well as commitment in t,e employees o t,e organi0ation.
',e organi0ation designs its mission in suc, a way t,at at all stages and in all departments1 t,ere
is a contri3ution o eac, mem3er and a continuous researc, to ind out t,e perect solutions to
t,e c,anging needs and desires o t,e customers. 7or t,is1 t,e organi0ation ,as conceived in
attainment o plans suc, as !ersonal development and also plans or t,e career1 t,roug, w,ic,
t,e organi0ation is a3le to identiy t,e development re6uired in t,e employees 8(ndreassen 299/:.
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Volkswagen:Vision
(utoeuropa- Volkswagen in 4urope is t,e plant w,ic, is most attractive. !roducing cars
possessing t,e most 6uality is t,e organi0ations visions and to produce productivity 3y providing
inrastructure w,ic, is le5i3le is t,e desire in order to make t,e ,uman resource skilled.
Volkswagen- History
',e production in t,e organi0ation did not start until a s,are,older 3ond was signed 3etween
Volkswagen and 7ord. ',is ,appened in 1;;1 and during t,is period was 3eing 3uilt1 4urope2s
acility o production certiied as t,at automotive organi0ation w,ic, is most modern. ',e site
was constructed in !almela1 w,ere ot,er suppliers or t,e organi0ations cars production ,ad
settled in. ',e plant t,us constructed1 is divided into ) ma<or categories known as t,e press1
3ody1 paint and assem3ly s,ops. =ut t,is esta3lis,ment was not easy as it re6uired t,e e5perts to
study t,e most comple5 industrial concepts in order to organi0e layout1 concept1 met,od as well
as t,e outlining procedures. ',is gave Volkswagen to ig,t t,e competition t,at e5isted not only
in 4urope 3ut also in t,e ot,er parts o t,e world. In addition to t,is1 t,e company ,as 3een
modiying its concepts and met,ods 3y improving t,em and ,as catered to remain t,e top most
organi0ation and a successul one 8=erry 1;;-:.
Developent of !roduct
7erdinand !iec, is t,e name 3e,ind Volkswagen w,o ,as 3een driving t,e organi0ation on t,e
w,eels o glory. ',e w,ole system o t,e organi0ation 3elieves t,at !4! w,ic, is t,e product
development process is actually t,e ull orm o !iec, w,o ,as completely taken t,e products
and services o t,e organi0ation in ,is ,ands. ',e product development process o (utoeuropa
,as led to emergence o our main 3rands w,ic, are Volkswagen1 (udi1 %eat and %koda w,ic,
,ave successully covered around 29> o t,e total market s,are. " t,is1 t,e top most 3rands o
Volkswagen ruling specially ?.% are @etta1 !assat and t,e newly designed =eetle w,ic, is a love
o t,e yout,. 7rom t,e way t,e products are developed1 t,e success o Volkswagen is seen. ',is
success is due to t,e eatures w,ic, are 6uirky giving t,e cars a spirit w,ic, makes t,e drivers
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ly and not <ust drive. ',is is anot,er 6uality w,ic, ,as 3een ,orri3ly lacking in t,e competitors
o t,e world 8Des,pande 1;;#:.
"perations
',e designs or t,e automo3iles o t,e organi0ation are eit,er outlined or given a deep eye o
concern. 4ac, department o t,e organi0ation is accessed everyday 3y t,e operation manager to
ensure t,at t,ere is a growt, in t,e data o production. Due to suc, inspirational skills in t,e
organi0ation1 t,e models designed or Volkswagen are t,e 3est in t,e industry. (long wit, t,is
t,e organi0ation ,as successully accomplis,ed to ac,ieve an o3session in t,e work wit, a pinc,
o t,oug, on every detail 8Hart 1;;;:.
Huan #esource Manageent
',e employees as well as t,e workers in concern are made to operate in suc, a way 3y t,e
,uman resource management department t,at even 3y lowering t,eir wage1 t,e company ensures
t,em t,at t,ey would not lose t,eir <o3s. ',e worker unions o Volkswagen ,ave agreed to work
le5i3ly 3ut ,ave resisted towards t,e demands o t,e management w,ic, ,as caused an increase
in t,e num3er o working ,ours w,en t,e production is at peak and over time is not paid to t,em.
',is ,as created a slog w,ic, is ,ard in t,e company.
(long wit, t,is1 t,ere ,as also 3een a suspicion on t,e company t,at it cares less or its margin
3y t,e investors 3ecause o w,ic, t,e stocks o Volkswagen ,ave 3een receiving t,e lowest
earning price in t,e sector o auto o 4urope 8Hart 1;;;:.
Marketing and $ales
',ere ,ave 3een seen gaps in t,e lineup o product in Volkswagen. Volkswagen does not ,ave
anyt,ing to oer w,en t,e category o minivans w,ic, are compact is considered. =ut
Volkswagen ,as surely paid attention towards anot,er product oering in order to increase its
sales. ',e strategies incorporated are suc, t,at t,ey unleas, t,e s,ortcomings o Volkswagen and
,ence1 increase in t,e potential earning or Volkswagen. Here1 t,e company ,as paid attention to
its marketing 3y developing sleek advertisements w,ic, target t,e concerned audience and
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places t,eir product rig,t in t,eir ,earts. ',e organi0ation ,as t,oug,1 paid less attention in
marketing 3ut ,as deinitely 3een successul in esta3lis,ing an increase in sale 8Howart, 299):.
$%"T &nalysis of Volkswagen
Strengths
',e strengt, o Volkswagen w,en deined 3roadly 3ased on eit,er researc,es or on t,e 3asis o
various case study lies in its sector o product development. Volkswagen ,as 3een consistent in
catering to t,e demands o t,e customers 3y associating wit, new models in a gap o ew years
suc, as =eetle and converti3les. (not,er strengt, or t,e company is in t,e way t,e strategy or
Volkswagen ,as worked in increasing t,e proit even t,oug, t,e industry o cars on a glo3al note
in undergoing lurc,es and t,e year is stressul. ',e proits or t,e company are e5pected to
dou3le in t,e coming years w,en viewed glo3ally.
Weakness
',e weakness or Volkswagen lie in "lper A,eer mi5 as noted rom t,e plan o t,e market. ',is
resulted in unavaila3ility o models o cars in t,e market or Volkswagen. &,en compared to
ot,ers in t,e market1 t,e competitors o Volkswagen were well prepared. (not,er weakness as
noted rom researc,es was in t,e area o preparedness. &,ile Volkswagen was still 3uilding and
developing t,e utility accessories or its sports %?V1 t,e competitors were well e6uipped and
prepared to take up advantage o t,e situations in t,e market.
Opportunity
It ,as 3een noted t,at Volkswagen invests a lot o capital in t,e la3or. %o1 t,is cost needs to 3e
reduced. ',e cost o la3or can 3e 3roug,t to a reduction i V& opens anot,er and separate plan
o manuacture in a place w,ere t,e la3or costs are relatively low and t,e manuacturing is ,ig,
suc, as in *0ec, $epu3lic. In addition1 t,e organi0ation knows ,ow to makes its way t,roug, t,e
competition1 so V& s,ould ocus on gra33ing t,e opportunity o a avora3le product
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development process and give t,e market new models w,ic, would increase t,e 3rands or V&
and add variety in t,e market.
Threats
',e competitors o Volkswagen suc, as (udi are providing t,eir potential 3uyers wit, goods o a
greater value w,ic, V& ,as not yet come out wit, suc, as minivans. 'o add on to t,e list o
t,reats is an issue o politics w,ic, is seen to e5ist among t,e workers o t,e organi0ation
preventing reconstruction and manuacture. ',e union among t,e workers is an issue o
consideration w,ic, can work against t,e managers and t,e directors o t,e company making t,e
sales o V& to go down.
&nalysis of Copetitive $trategy
!orters + orces model B Its application in V&
',e ive orce model o !orter is applied in t,e ollowing way 3y t,e organi0ation.
1. Barriers to Entry: &,en ocusing on t,e automo3ile industry1 it is clear t,at t,e ocean is
vast and competitors in it are ,uge. ',ere can 3e no random supplier o t,e same product
w,o can enter t,is ocean and work accordingly. V& is an esta3lis,ed organi0ation and
does not ace t,e 3arrier towards entering into t,e market 3ut every now and t,en t,e
company releases new models w,ic, need to 3e secured. ',e company makes sure o
investing only into t,ose markets at t,e initial stages o production w,ic, are less
occupied. ',e company aims at releasing its models in t,ose countries w,ere t,e
competition to a new entrant is less so t,at t,e growt, o sales can increase and t,e
proportion remains to 3e less.
2. Threat of substitutes- &,ile ocusing on t,is particular aspect o !orter2s model1 V&
makes sure t,at it not only protects its cars rom a t,reat o customers 3uying ot,er cars
o t,e same eatures 3ut also ensures t,at w,erever t,e new model is 3eing placed is a
location w,ere people are potential towards t,e product. I t,e cost o operating t,e
automo3ile is ,ig,1 t,en customers would take a step 3ack and 3uy some ot,er range o
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models rom dierent company instead. 'o succeed in t,is regard1 V& pays a ma<or
attention to t,e time1 place1 money1 preerences o t,e customers and t,eir convenience.
#. Competitive Rivalry- &,ere t,e industry is ,ig,ly competitive1 t,e return o earning is
low as t,e competition cost is ,ig,. V& reali0es t,e act t,at t,e industry o automo3iles
is governed 3y oligopoly meaning a condition o t,e market w,ere t,ere are ewer
num3er o sellers and t,us1 t,e action o any o t,ose would result directly on t,e
condition o t,e market. V& ,as incorporated t,is section o t,e !orter2s model well in
t,eir strategy 3y not paying attention to t,e pay os t,at its new designs can oer in t,e
long run. V& analy0es t,e current proposition in t,e market and t,e ratio o its
competitors and t,en takes an action in t,e present.
). Bargaining power of suppliers-',ere is a lot o ragmentation in t,e supply 3usiness o
automo3iles. V& relies on various companies or t,e manuacture o its detailed parts.
',e parts used 3y V& are suc, t,at t,ey remain operational t,roug,out t,e average lie
span o t,e car. ',is demands less cost to 3e paid to t,e suppliers. ',is power o 3argain
wit,in t,e supply network depends upon lie o t,e parts.
+. Bargaining power of buyers- V& knows t,at t,e 3argaining power or its cars is
unc,allenging. V& 3elieves in 6uality and t,is is w,at it oers to its customers. &,en
customers purc,ase a car1 t,ey don2t do t,at in ,uge volumes. ',is is a positive act or
t,e automo3ile industry and or V& as well 3ecause customers look or a product w,ic,
,as all in one eatures. V& 3elieves in creating t,at and so no matter i t,e scale o t,e
product range is ,ig, as compared to ot,ers in t,e market1 customers know t,at it is V&
8Heskett 1;;.:.
Value c'ain &nalysis of Volkswagen
Most o t,e parts re6uired or t,e manuacture o its cars are produced 3y Volkswagen itsel 3ut
t,ere are certain detailed parts o certain units w,ic, need to 3e produced 3y ot,er speciic
companies. ',ere are various plants o t,e organi0ation in dierent countries and su3-continents
w,ere every plant is responsi3le to produce or t,e market locally. ',e reason 3e,ind t,is
approac, is to reduce t,e e5pense o s,ipping detailed parts to longer distances and also to ,elp
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t,e economy on a local level. ',e actories o Volkswagen ollow a value c,ain o manuacturing
various models in t,e same rame o time oering t,e customers original parts 8Hom3urg 2992:.
',e assem3ly line o Volkswagen in comparison to ot,er e5isting automo3ile companies in t,e
world o automo3iles is t,e longest. ',is is 3ecause o t,e aster operations done in t,e company
due to use o advanced tec,nology suc, as ro3ots. ',e company not only saves energy 3ut also
time and wastage. ',ere are workers in t,e assem3ly line too ot,er t,an ro3ots w,o keep a
complete c,eck in t,e 6uality.
(lso1 t,e cars o Volkswagen are s,ipped ma<orly wit,in t,e continent wit, t,e ,elp o 3oats or
trucks and trains. ',e availa3ility o ware,ouses and logistics centers at various areas ,as
provided an eective value c,ain. 'o add on to t,is1 t,e company takes care t,at t,ere is no
wastage 3y re-use o materials and also ensuring t,at no product is produced wit,out ,aving
t,ose many orders 3eing 3ooked. ',e stock w,ic, is 3oug,t 3y t,e dealers in order to display to
t,e customers is maintained wit, t,e ranc,ising company and not wit, t,e company o
Volkswagen 8CrDnroos 2991:.
T'e $trategy clock for Volkswagen
',e strategy o Volkswagen is ocuses on 3uilding a strategy clock w,ic, is suc, t,at it unctions
in a group strategy. ',is strategy o group ,olds its ocus on placing Volkswagen as a w,ole
among t,e leaders w,o are glo3al1 economic as well as environmentally ocusing on t,e creation
o automo3iles. =ased on t,is1 Volkswagen ,as outlined ew strategic goals in order to 3e t,e
most esta3lis,ed automakers o t,e world. ',e strategy o Volkswagen is to work towards
deploying innovations w,ic, depict intelligence and com3ine wit, tec,nology to 6uenc, t,e
desires o t,e customers and t,em 6uality t,roug, reality. ',eir strategy remains to increase t,e
sales o units making it e5ceed 19 million ve,icles o Volkswagen 3eing sold in a year in t,e
coming years1 on a glo3al scale. ',e strategy intends towards increasing also t,e sale return prior
to ta5 so t,at t,e oundation o inance is 3uilt strong and t,ere is a3ility in Volkswagen to ig,t
in t,ose times o market periods w,ic, are toug,. ',e strategy also1 is to create suc, a team o
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workers and employees wit,in t,e manuacture o Volkswagen w,o accomplis, all goals and
,ence1 t,e company strategi0es towards selection o its employees in a very discrete manner.
',e world is growing more and more aware towards saving t,e environment and t,e ingers are
always pointed out towards t,e automo3ile industry in adding to t,e ever increasing pollution.
Volkswagen reali0es t,is and is working towards strategi0ing an orientation o cars w,ic, are
eco-riendly and proita3le not only to Volkswagen 3ut also t,e customers and in turn t,e
environment 8Davidow 1;/;:.
Conclusion and #ecoendations
',is report provided an insig,t into t,e various internal as well as e5ternal departments o
Volkswagen w,ic, ena3le to understand t,e organi0ation and strategic management o
Volkswagen. It ,as to 3e accepted t,at Volkswagen oers cars o 6uality wit, a complete ocus
on t,e wants o t,e customers and t,eir needs. ',ere is a lot o attention in review o data
production wit,in t,e operations to keep a c,eck on t,e minutest o t,e details in t,e products.
',is also ensures t,at t,e data and igures illed in t,e data s,eets are correct. Heavy emp,asis is
given on t,e development o products wit, added details keeping in mind t,e competition in t,e
market.
7or uture recommendations and ormations o strategies1 Volkswagen s,ould ocus on reviewing
its proactive approac,. It can 3e summari0ed t,at wit,in t,e ramework o V& it remains
important t,at t,ere is a continuous conveyance o guidance a3out tec,nicality especially a3out
t,e legal provisions w,ic, ,elps in coming out wit, an action plan in t,e time o recovery. ',is
would ,elp V& en,ance its sales even w,en t,e principles o dialogue are low in t,e market
8Einman 299;:.
',e company s,ould also ocus on increasing its s,ares and stocks. ',is can 3e done 3y an
increase in t,e conventions o t,e operational departments 3y a way o providing a 3alanced
inrastructure to t,e s,are,olders and making t,em 3elieve t,at V& does care a3out its margins.
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( lot o cost cutting was viewed to 3e done in t,e wages o t,e workers in order to reduce la3or
cost. ',e workers accepted t,is c,ange 3ut were completely against working or e5tra ,ours 3ut
wit,out pay. V& could tackle t,is 3y opening anot,er plant o manuacture in a place w,ere t,e
la3or cost is relatively low and signiicant.
',ere are various models o Volkswagen w,ic, are availa3le in some countries 3ut are
completely not made aware o in ot,er markets. =ringing t,ese models to ot,er markets in ot,er
countries1 would deinitely result in a s,oot up o sales or V& w,ic, is envisions accomplis,ing
8=allantyne 1;;-:.
',e company knows very well t,at it aces c,allenges in ac,ieving glo3al environmental peace
and or t,at it s,ould strategi0e towards working in a way t,at it produces glo3ally cost eicient
and environmental mac,inery.
#eferences
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=allantyne1 D 1;;-1 HCuest editorial: Cetting your way in 3usiness21 Asia-Australia Marketing Journal1
vol. )1 no. 11 pp. #B-.
=erry1 GG 1;;-1 HCuiding and inspiring perormance t,roug, a service strategy21 Customer Service
Management Magazine1 no. 121 %eptem3er1 pp. -B/.
Davidow1 &H F ?ttal1 = 1;/;1 Total Customer Service: The Ultimate Weapon1 Harper and $ow
!u3lis,ers1 Jew Kork.
Des,pande1 $1 7arely1 @? F &e3ster @r1 74 1;;#1 H*orporate culture1 customer orientation1 and
innovativeness in @apanese irms: ( 6uadrad analysis21 Journal o Marketing1 vol. +.1 @anuary1 pp.
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Heskett1 @G1 %asser @r1 &4 F %c,lesinger1 G( 1;;.1 The Service #roit Chain1 ',e 7ree !ress1 Jew Kork.
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Hom3urg1 *1 Hoyer1 &D F 7assnac,t1 M 29921 H%ervice orientation o a retailer2s 3usiness strategy:
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