How porters business strategies may be applied to volkswagen

Assignment Help Business Management

Reference no: EM133668258

Assignment: Strategic Management

Case Study on Volkswagen AG

Volkswagen AG, known internationally as the Volkswagen Group, is a German publicmultinationalconglomerate manufacturer of passenger and commercial vehicles, motorcycles, engines and turbomachinery, headquartered in Wolfsburg, Germany. Since the late 2000s Volkswagen became a publicly-traded family business owned by Porsche SE, which in turn is half-owned but fully owned by the Austrian-German Porsche and Piëch family. The company also offers related services, including financing, leasing, and fleet management. In 2016, it was the world's largest automaker by sales, and keeping this title in 2017, 2018, and 2019, selling 10.9 million vehicles and was the largest automaker by revenue in 2022. It has maintained the largest market share in Europe for over two decades.

While most automobile companies talk aboutbankruptcy, merger, collapse, and liquidation,Volkswagen AG is posting solid earnings. Volkswagen (VW) managed the global economic recession well by focusing on emerging marketssuch as China and Brazil and continually reducing costs.VW is the leading auto firm in China, not Toyota orNissan. VW's market share in Western Europe rose to 20percent in 2009 from 17.9 percent a year ago. Whileshrinking demand for new cars in major markets andhigh raw-material costs, and unfavorable exchange rateshave reduced earnings of most European automakers,VW anticipated these conditions through excellentstrategic planning and continues to take market sharefrom rival firms worldwide.

The German truck maker and engineering companyMAN AG is VW's largest single shareholder at 30 percent,and its business too has been good. MAN's thirdquarter of 2008 saw profit jump 34 percent, lifted bystrong sales of trucks, diesel engines, and turbomachinery. VW is currently spending $1 billion to builda new plant in Chattanooga, Tennessee, for theproduction of a midsize sedan in 2011 with an initialcapacity of 150,000 cars annually. VW's plans for 2018include increasing its U.S. market share from 2 percentto 6 percent by selling 800,000 vehicles annually in theUnited States. By 2018, VW also plans to export 125,000 vehicles from North America to Europe. VW is increasing is 2009 U.S. marketing budget by 15percent in its Audi AG luxury division. The Audi ads evenran during the 2009 Super Bowl.For all of 2008, VW's net profit rose 15 percent to4.75 billion euros and revenues rose 4.5 percent to 114billion. VW expects flat or even slight declines in 2009but some of its competitors are incurring billion dollarlosses.

VW has cars named for climate patterns, insects,and small mammals. Along with the New Beetle, VW'sannual production of 6 million cars, trucks, and vans includes such models such as Passat (trade wind), Jetta(jet stream), Rabbit, and Fox. VW also owns severalluxury carmakers, including AUDI, Lamborghini, Bentley,and Bugatti. Other VW makes include SEAT (family cars,Spain) and SKODA (family cars, the Czech Republic).VW operates plants in Africa, the Americas, Asia/Pacific,and Europe. VW holds 68 percent of the voting rights in Swedish truck maker Scania and about 30 percent ofMAN AG. VW also offers consumer financing.VW is acquiring Porsche Automobile Holding SE andmerging their auto brands into VW. Based in Stuttgart,Germany, Porsche already owns 51 percent of VW buthas weakened in 2009 after taking on $12 billion innew debt.

VW is in talks with China's BYD Co. to build hybridand electric vehicles powered by lithium batteries.Based in Shenzhen, BYD will supply VW with the battery technology. This will be the first automotive partner forBYD, which is one of the world's largest suppliers of cellphone batteries.VW is building a new assembly plant in Indonesiafor $47 million about 1 hour east of Jakarta, the capital.This plant will assemble the Touran and employ about3,000 persons. Toyota already has a manufacturingplant in Indonesia and dominates that market. Currentlymany VW vehicles are imported into Indonesia, thusbeing subject to a 200 percent tariff.VW reported 2nd quarter 2009 earnings of $397million; the Audi division was the biggest contributor tothe gains.

Task

A. Discuss how the social, legal, economic, political, and technologicalenvironments may impact Volkswagen

B. Discuss how Porter's Business Strategies (if any) may be applied to Volkswagen.

C. Explain how Volkswagen used the three alternative strategies of forward integration, market penetration, and diversification to improve on it organization.

D. Discuss two other strategies the company could implement to further benefit the organization.

E. There are various means of achieving strategies among companies. VW for example have plans for future expansion; Briefly the best strategies VW could use to achieve its objective of plant expansion.

Reference no: EM133668258

Questions Cloud

What are appropriate nursing interventions for each problem : Incidence and Aetiology of Bronchiolitis and Pertussis - Two actual nursing problems are respiratory distress and decreased oral intake

Which is really a cover sheet with the names of each team : Which is really a cover sheet with the names of each team member, the course, the date, your instructor's name, and the title for the project.

Highly anxious with low self-esteem : Koji is highly anxious with low self-esteem. His parents push him very hard to do well in school and they maintain rigid boundaries in the home.

Mental illness can be a messy : Mental illness can be a messy, CONFUSING topic and when we add the criminal justice system it becomes a big hairball of sorting o

How porters business strategies may be applied to volkswagen : MGMT 4701- Discuss how Porter's Business Strategies may applied to Volkswagen. Briefly best strategies VW could use to achieve its objective of plant expansion.

Negatively impacted professional or personal relationships : How has your emotional intelligence, or lack of emotional intelligence, positively or negatively impacted your professional or personal relationships?

Research project in preparation for playwork placement : Examine how personal, social, cultural perspectives inform individual and collective understandings of children's health, wellbeing and risk

Teachers could utilize to enhance the success : Describe three specific, evidence-based UDL instructional approaches or adaptations that teachers could utilize to enhance the success

What is the current methodology in your organization : What is the current methodology in your organization? What role can you play in moving the needle towards agile project management?

User Account

All Pages