Volkswagen Group

Topics: Volkswagen Group, Automotive industry, Audi Pages: 7 (1366 words) Published: May 7, 2014


Memorandum

To:

From:

Date:

Subject:Term Paper
_______________________________________________________________________

Attached please find the term paper on Volkswagen Group’s “Strategy 2018”, which is due on ______, in BUS 388N, Operations Management, Section.

The work and writing presented in this term paper, unless specifically specified in an appropriately cited footnote, endnote, or reference note, is solely mine.

Name

Volkswagen Group, one of the leading automobile manufacturers in the world, has been on an impressive incline in the market with a continuous rapid international expansion. Unlike other reigning companies such as Toyota Motor Corporation and General Motors, Volkswagen was on the brink of failure after a long period of mediocrity. After years of continuous lack of productivity in the late 1990’s and early 2000’s, along with the Great Recession that affected all automobile companies, Volkswagen Group formed the new path for the company titled, “Strategy 2018”.

In the 2000’s sales tapered off due to competition, along with delays in product introductions and overall quality issues. 2005 sales alone had a reduction of approximately 37% from the prior 4 years.1 Even with its introduction of their 5 new products in 2006, productivity and profitably remained an issue. Between the struggling economy and high competition between them and the leading automobile companies, Volkswagen Group needed to make a change in their operations and management as a whole. “Strategy 2018” was then formed and supported by the Group as the next step to achieving supremacy of the automobile industry.

Set by the Group’s CEO, Martin Winterkorn, the strategy focused on positioning Volkswagen as a global economic and environmental leader of the automobile industry. The plan set four goals to reach by the year of 2018 including to deploy intelligent innovations and technological advancements that would in-turn lead to higher customer satisfaction. By achieving high customer satisfaction, not only would they increase their customer population, but attain long-term success. The second goal is to increase unit sales to more than 10 million vehicles per year. Third, is to receive a long-term return on sales before tax at a minimum of 8% that would secure a solid financial position even in difficult market periods. The fourth and final goal of Strategy 2018 aims to be the most attractive employer in the industry. In Winterkorn’s eyes, to build superior vehicles, they must have the best team in the sector innovating their new ideas and products.2 By hiring the highly qualified, fit and motivated employees, the design success would follow.

Involved in the Strategy, capital expenditures would remain at manageable levels and product design will be focused on an international scope. Regardless of the economic distress in 2008, they aimed to improve their productivity and quality of their companies’ products.2 By including their regional development teams along with their cooperation with local suppliers, they could attain the markets wishes and demands to achieve higher satisfaction and in turn increase their demand.2 Through the standardizing process in all areas of the Group, production throughput times would be reduced by a great amount. To reach one of their main goals of long-term profitability targets, a disciplined cost and investment strategy is they key component. By keeping precedence in their long-term products they aimed to achieve the highest level of development in them.

In the U.S., Volkswagen Group took vast strides in product quality, product offerings, customer experience, brand management and other manufacturing support that continues to strengthen its standing in the international market.3 The first step was their expansion of product lines including their five new products for Volkswagen and four new products for Audi including the...

Cited: Muller, Joann. "How Volkswagen Will Rule The World." Forbes. Forbes Magazine, 17 Apr. 2013. Web. 07 May 2014.
"Strategy." Volkswagen Group. N.p., n.d. Web. 07 May 2014.
 "VW of America Moves Forward with 'Strategy 2018 ' Plan." VW of America Moves Forward with 'Strategy 2018 ' Plan. N.p., n.d. Web. 07 May 2014.
 "Volkswagen Group Makes Extensive Structural and Management Realignment." Volkswagen Group. N.p., n.d. Web. 07 May 2014.
 "VW Quarterly Profit Beats Estimates on Porsche Deliveries (3)." Bloomberg Business Week. Bloomberg, n.d. Web. 07 May 2014.
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