Volkswagens' Management Strategies

Topics: Volkswagen Group, Automotive industry, Volkswagen Pages: 6 (1554 words) Published: September 20, 2006
Executive Summary

Volkswagen has been one of the leading motor vehicle manufacturer for a long time. With all the competition in the automotive industry, it has been challenging for Volkswagen to get into the position that they are in now. They are involved in almost every type of car market out. Teenagers can enjoy the Volkswagen Jetta, while parents would love the Tourareg. Volkswagen has even put a foot into the exotic car industry with expensive automobiles such as the Bentleys and Lamborghinis.

The management of Volkswagen is responsible for turning Volkswagen into a global manufacturer. Dr. Bernd Pischetsrieder, former CEO of Volkswagen, implemented his model strategy and with their various business strategies, the management team was able to find ways to please all types of consumers in the huge automotive market. Everyone needs a car and Volkswagen has been able to offer cars to fit every category.

Volkswagen was an important innovative company, because they introduced their multi-brand strategy to a new level, getting a piece of every market. If one market did not do as well as projected, Volkswagens' brand popularity and quality has been able to perform in other car markets.

Introduction

Volkswagen AG (VW) is the largest motor vehicle manufacturer in Europe, and the fourth largest in the world. Volkswagen manufacturers economic and luxury automobiles, sports cars, light trucks and commercial vehicles through nine independent brands that include Audi, Bentley, Bugatti, Lamborghini, Seat, Skoda and Rolls-Royce (until finalization of sale to BMW). These brands originate in six different European countries, and span customer base, cost and function. Each brand has a 'distinct personality', yet is unified under the parent Volkswagen Group that consists of all of Volkswagen's individual brands and subsidiary divisions. The Volkswagen Group's activities primarily focus on the automotive market in which they offer products and services along the entire automotive value chain such as sales, service, financing, leasing, car rental and insurance through a separate financial services division and Europcar. However the Volkswagen Group also includes subsidiaries that are involved in real estate, transportation planning and logistics, knowledge implementation and information technology consultancy.

Purpose

The purpose of this paper is to show the strategies that Volkswagen AG has implemented to result in the success that it has now.

Statement of Limitations

This paper will not discuss the biography of the company because of the significance of the topic. The paper will also not have any recommendations to the strategies discussed in the report.

Definition of Terms

Foothold - An initial accomplishment that opens the way for further developments

Long-term safeguarding

Communize - To subject to public ownership or control.

Procurement - The act of getting possession of something

Aesthetic - Of or concerning the appreciation of beauty or good taste

Volkswagen World-Wide

As a global player, Volkswagen is represented in all the major world markets with product offerings in more than 150 countries, and employs over 300,000 people throughout its global manufacturing base of 43 production facilities. In addition to their global manufacturing presence, Volkswagen's strong international sales and marketing component provides them with an added foothold in the global marketplace. In Western Europe almost every fifth car originates from the Volkswagen Group where at year-end 2004, they held a 18.9% share of the passenger car market even though there were inconsistent developments in various markets.

Corporate Business Strategy

The Volkswagen corporate strategy is geared toward the long-term safeguarding of profitability and addition of value to their products so as to enhance customer benefits. The core elements of Volkswagen's strategy can be summarized as the product development and...
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