...March 24, 2015 Case Study #1 Volkswagen Group Prepared By: Team 2 Alejandra Alvarez Amanda Kilroy Ryan Musante Bastian Steppin The Volkswagen Group (VW), based in Wolfsburg, Germany, is one of the largest automakers in the world. Comprised of twelve different brands, the automaker maintains a global presence, with more than 100 factories across Europe, North and South America, Asia, and Africa. The company sells its cars in 153 countries. As the world’s 8th largest employer, it has 592,586 workers who produce close to 41,000 vehicles every weekday. Volkswagen boasts many notable strengths, such as strong brand identity (in all 12 of the their brands), dedication to creating customer satisfaction, and excellence in design and engineering. The secret to their success, however, truly lies in their avid dedication to improving efficiency. As efficiency increases, production volume rises, and costs shrink. Throughout their supply chain there have been countless efforts, both large and small, to improve processes, speed up, and lower costs for virtually all tasks that are required to put vehicles into the hands of customers worldwide. Corporate Structure Volkswagen’s corporate structure appears to violate the conventional wisdom of the automotive industry. Firstly, they have a large assortment of brands, each running as its own entity. Each has its own board of directors, and its own annual reports. The brands cater to different markets, either in terms...
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...The Volkswagen Group with its headquarters in Wolfsburg is one of the world’s leading automobile manufacturers and the largest carmaker in Europe. In 2011, the Group increased the number of vehicles delivered to customers to 8.265 million (2010: 7.203 million), corresponding to a 12.3 percent share of the world passenger car market. In Western Europe over one in five new cars (23.0 percent) comes from the Volkswagen Group. Group sales revenue in 2011 totalled €159 billion (2010: €126.9 billion). Profit after tax in the 2011 financial year amounted to €15.8 billion (2010: €7.2 billion). The Group is made up of ten brands* from seven European countries: Volkswagen, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Volkswagen Commercial Vehicles, Scania and MAN. Each brand has its own character and operates as an independent entity on the market. The product spectrum extends from low-consumption small cars to luxury class vehicles. In the commercial vehicle sector, the product offering ranges from pick-ups to buses and heavy trucks. The Volkswagen Group is also active in other fields of business, manufacturing large-bore diesel engines for marine and stationary applications (turnkey power plants), turbochargers, turbo-machinery (steam and gas turbines), compressors and chemical reactors, and also producing vehicle transmissions, special gear units for wind turbines, slide bearings and couplings as well as testing systems for the mobility sector. The Group operates 94...
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...Volkswagen of America: Managing IT priorities Volkswagen, as the name suggests means “people’s car” and defines its objectives to design and manufacture cars which are fuel efficient and affordable. With continuous improvement, Volkswagen has not only subjugated the automotive market with respect to its low priced cars, but also earned industry acknowledgement. The core competency of Volkswagen is structured to build customer loyalty. Although, Volkswagen suffered from erratic sales pattern when the company introduced a new model commonly called as the “Himalayas chart” due to its rise and falls (Austin, 2007).This was because of the management not dealing with situations proactively. This problem was mitigated soon through its competencies in strategizing and manufacturing potentials as well as the expansion of its product diversification, i.e. the establishment of new brands which were the “classic” and the Audi brand group so that the focus is not just on the traditional mid-sized vehicles of a particular segment. Moreover, given the high quality of cars they manufacture, good service, focussed marketing and well-organized stock rotation gives Volkswagen a competitive edge over the other automobile manufactures. The highlight of this case study is to analyse Volkswagen’s business and IT strategies and the importance of process prioritization in executing and aligning these strategies with enterprise goals. With more in-depth analysis of the case, the major challenge faced by...
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...9-606-003 REV: JUNE 14, 2007 ROBERT D. AUSTIN Volkswagen of America: Managing IT Priorities Dr. Uwe Matulovic, chief information officer (CIO) of Volkswagen of America (VWoA), placed the telephone in its cradle and leaned back in his chair, replaying the just-completed conversation with one of his peers from the Executive Leadership Team (ELT). The call, Matulovic mused, had been similar to three others he had participated in that week, each with a different ELT member. The results of a new prioritization process—a list of IT projects that would be funded in 2004—had been unveiled only a few days earlier. But already a storm was gathering. The phone calls from other executives had common themes. All the callers had expressed concern that high priorities for their areas of the company had not been funded. Some had repeated views expressed during the prioritization process by people who worked for them about supposed categorization mistakes that penalized their business units. And each of the calls had concluded with an informal request to insert an unfunded project (or two) into the IT department’s work plans. “We don’t have to reopen the process,” the most recent caller had said, “but perhaps spare capacity might be applied to make some progress on this project in 2004—we’ve done this before, and it would mean a lot to our area and to the company’s growth plans.” The 10 business units that made up VWoA had proposed more than 40 projects, with funding requirements totaling...
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...How should a worldwide auto maker regain trust after brands disaster? A case study on Volkswagen Group Daniel HARMAN 620019565 dh325; Jeffery YIM 620022358 jy28; Ka Ying MAN 640042125 km499; Wing Tim MAN 650052933 wm259; YuPeng Huang 650003422 yh379; Zhihan GUO 650058943 zg234 Outline Emissions scandal of Volkswagen Group and its importance Reasons for comprehending the scandal Analysis of the case Implications for international enterprises Recommendation References Emissions scandal of Volkswagen Group and its significance Emissions scandal of Volkswagen Group ● ● ● Pass emissions tests by cheating Have to recall 11 million of carsestimated cost would be €6.5 billion Share price dropped from €162.40 on Sep 18 to €106 on Sep 22 Volkswagen AG VOW.DE (XETRA) in Euro Source: Reuters (2015) Reasons for comprehending the case Source: Volkswagen (2014) Volkswagen Sustainability 2014 At A Glance, p34 Reasons for comprehending the scandal ● United States is the second largest auto market ● Volkswagen Group is the largest auto maker ● Many international firms face brand crisis and should know how to renounce Analysis of the case Institution based view The leading perspective in international business suggests that ● Firms’ performance is determined by the institutional frameworks to a great extent. Institutional transitions ● Fundamental and comprehensive change introduced to the rules of game ...
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...INTI INTERNATIONAL UNIVERSITY FACULTY OF BUSINESS, COMMUNICATION AND LAW MKT 2103 / MKT2105 – CONSUMER BEHAVIOUR AUGUST 2014 INDIVIDUAL ASSIGNMENT (20%) Analyse the case study given and answer the following questions. While most automobile companies talk about bankruptcy, merger, collapse, and liquidation, Volkswagen AG is posting solid earnings. Based in Wolfsburg, Germany, and Europe's biggest automaker by sales, Volkswagen (VW) managed the global eco-nomic recession well by focusing on emerging markets such as China and Brazil and continually reducing costs. VW is the leading auto firm in China, not Toyota or Nissan. VW's market share in Western Europe rose to 20 percent in 2009 from 17.9 percent a year ago. While shrinking demand for new cars in major markets and high raw-material costs, and unfavorable exchange rates have reduced earnings of most European automakers, VW anticipated these conditions through excellent strategic planning and continues to take market share from rival firms worldwide. The German truck maker and engineering company MAN AG is VW's largest single shareholder at 30 percent, and its business too has been good. MAN'S third quarter of 2008 saw profit jump 34 percent, lifted by strong sales of trucks, diesel engines, and turbo machinery. VW is currently spending $1 billion to build a new plant in Chattanooga, Tennessee, for the production of a midsize sedan in 2011 with initial capacity of 150,000 cars annually. VW's plans for 2018 include...
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...Sona Patel Volkswagen of America Managing IT Priorities The new process at Volkswagen to select, manage, schedule and fund projects seems structured and effective. The Transformation: In the 1990s, Volkswagen had a very decentralized IT system. Initially they had outsourced all their IT work to Perot Systems and in doing so they drastically reduced the IT staff within the organization. When that didn’t work well, they created Volkswagen AG company gedasUSA Inc. which acted as the point of contact with Perot Systems. Soon, they also created eBusiness teams within each Business unit which in turn developed relationships with their own third party IT providers. This highly segmented design led to high costs and poor timeline adherences. To correct this, Volkswagen created a new business unit within the organization that would be the single point of governance for IT related issues. This unit worked in conjunction with the eBusiness teams and the gedasUSA team but was solely responsible in the management, scheduling, budgeting and execution of the IT projects. This was the first step in the right direction. The New Process: There are a lot of factors that govern which projects are the most ideal to be funded and the new system seemed to understand that. The three step process was very structured and first identified the dependencies between various projects. It also classified similar projects and grouped them together for execution. This immensely helped to narrow down...
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...First I want to show you some car brands. Volkswagen,the best-selling car brand in Europe.Audi, the world’s third largest luxury car brand after Mercedes-Benz and BMW. Scania, the sweden commercial vehicle producer, Skoda, the famous automobil manufacturer based in the Czech Republic, and SEAT, the biggest Spain car maker. Then the ultra-high performance car brand Lamborghini ,Porsche and Bugatti. And last ,British ultra-luxury car brand Bentley. All these brands have one thing in common, they are all owned by the Volkswagen group of Germany. * The Volkswagen Group strengthened its position as the top motorcar manufacturer in Europe in 2009 by increasing its market share by half a percent to 21.1%. * Volkswagen group also is the third largest car maker in world just behind Toyota and General Motors.But unlike Toyota is struggling from its brand crisis and GM struggling from bankruptcy,Vw’s performance is relatively strong during this economic crisis. * Headquartered in Wolfsburg, Germany * Total employee 370,000 * In 2009, Volkswagen Group sold 6.31 million vehicles, claiming over 11% of the world passenger car market SWOT –strenths Successful mutilple brand strategy The Group is made up of nine brands from seven European countries: Volkswagen, Audi, SEAT, Škoda, Volkswagen Commercial Vehicles, Bentley, Bugatti, Lamborghini and Scania. Each brand has its own distinct brand identity and operates as an independent entity on the market. The company's...
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...follows. You will include the following information for each stakeholder group which requires research on the part of the writer. Institutional Investors The major institutional investors of Volkswagen are from Germany. The voting rights distribution of shareholders is listed below. Current Voting Rights Distribution* (as at December 31, 2014) | 50.73% | Porsche Automobil Holding SE, Stuttgart | 20.0% | State of Lower Saxony, Hanover | 17.0% | Qatar Holding | 12.3% | Others | (Source: http://www.volkswagenag.com/) The company's top five preference shareholders have lost around 1.7 billion euros since September 22th, while its top ordinary shareholders, dominated by German sports car brand Porsche, the state of Lower Saxony and the Qatar Investment Authority sovereign wealth fund, have lost around 11 billion euros during this period(Reuters,2015). As the biggest shareholder of Volkswagen, Porsche Automobil has suffered a stock loss of 9.03 billion euro since the news of the emissions scandal broke (MarketWatch, 2015). The stock price of Porsche has slumped. （Source：Yahoo Finance） However, Volkswagen has been cooperating with its major institutional investors for years and has a close relationship among them. Although institutional investors suffered a great loss, Volkswagen still enjoy a high credibility among them. For those shareholders, they are concerned about the following items: * Volkswagen’s reaction to public, * Total estimated loss from this...
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...For the exclusive use of L. Jobard, 2015. IMB 443 SEEMA GUPTA VOLKSWAGEN IN INDIA In just 4 years since Volkswagen (VW) set up its India operations, it had captured a 3.6% market share – something the Detroit giants had not been able to do after more than a decade in the country (Exhibit 1). VW was the flagship brand of the Volkswagen group, which also owned Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, and Skoda. In India, the group was present with Skoda, Audi, and VW. 1 Maik Stephan, Managing Director, Volkswagen Group Sales India said: While three brands give us the collective power, we have to be careful to market them uniquely so that we are not chasing the same customer. i In 2011, the group’s worldwide revenues and net profit were Euro 159 billion and 15.8 billion, respectively. Headquartered in Wolfsburg, Germany, the group operated more than 60 plants around the world. It was the second largest automaker behind General Motors. It had a market share of 12.3% in 2011. Its core markets were Germany and China. It was the market leader in Europe with a 20% market share. It aimed to become the world’s largest automaker by 2018. With a growth of 30% in the Indian automobile industry, India was to play an important role in realizing the group’s global ambitions. ii VW targeted to increase the market share of its flagship brand in India from 3.6% to 5% by 2015. Neeraj Garg, Director, VW Group Sales India said: We have to transition from launch stage to growth stage of...
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...Volkswagen Group Business Strategy & International Management Content 1 2 Introduction Volkswagen Group 2.1 2.2 Figures, Data, Facts History 2 2 2 4 5 5 6 8 8 10 12 12 15 16 17 18 3 Strategy Planning 3.1 3.2 Overall Strategy Strategy 2018 4 Business Risk Analysis 4.1 4.2 Porter’s Five Forces Resources and Capabilities 5 Financial Risk Analysis 5.1 5.2 Key Financial Figures Risks 6 7 8 SWOT-Analysis Conclusion References 1 Business Strategy & International Management 1. Introduction Whenever you visit another country and you say that you come from Germany on of the first things you ever hear is “Germany, oh I like German cars” and then they say e.g. BMW, Mercedes or Audi. That shows that German cars are not really German cars, instead they are world cars, produced and sold in countries all over the world. In my case I choose the Volkswagen Group because it is the biggest German car manufacturer and the second largest in the world. Moreover the strategy of Volkswagen is to be the largest car manufacturer until 2018. To reach this goal it is very important to understand the globalized world to compete with their competitors in a more and more competitive environment. Furthermore it is very important to show attention to emerging markets to increase the company’s sales especially when some markets like America and Europe are satisfied. In this report I want to analyze the Volkswagen...
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...Global Compact Case Study Final Version 23 March 2007 Better Health and Safety for Suppliers A partnership project between Volkswagen, ILO & GTZ Maria Kristjansdottir Reykjavik University, School of Law mariak02@ru.is Tel: + 354 699 0482 Better Health and Safety for Suppliers Case Abstract This case study focuses on the “Better Health and Safety for Suppliers” project and how Volkswagen AG seeks to strengthen their policy in Health Protection, Promotion and Occupational Safety by promoting social protection, improving safety and health standards and strengthening labour inspection. The project is a partnership project between Volkswagen, the International Labour Organization and the German Corporation for Technical Cooperation. The project entails first facilitating the participation of selected Volkswagen suppliers in Brazil, Mexico and South Africa in audits with respect to Occupational Safety and Health in their workplace. Based on the findings of these initial audits, several recommendations are given and used to generate a checklist for a second review (conducted up to 6 months after the initial audit). A report is then created which documents the audit findings, including any improvements that have taken place at such supplier. When all the suppliers have been assessed, best practices and solutions found across all project countries will be developed and collected into an online network. This network...
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...The Volkswagen Group Background The Volkswagen Group with its headquarters in Wolfsburg, Germany is one of the world’s leading automobile manufacturers with the world’s biggest car plant. The group is made up of nine brands from seven European countries: Volkswagen, Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda, Scania and Volkswagen commercial vehicles. Separately these brands have its own personality and functions as an independent entity on the market. The product ranges from low-consumption small cars to luxury class vehicles. In the commercial vehicle division, the product offering spans heavy trucks, busses and pickups. The Volkswagen Group has operations in approximately 153 countries. Unlike other automobile companies, they do not use the word “Vision”, but somewhat they express it like this: Our strategy pursues a clear objective: By 2018, the Volkswagen Group is to be the world’s most successful and fascinating automobile manufacturer and the leading light when it comes to sustainability. The internal mission statement of the Volkswagen group is not available to the public, but on November 25, 2010, the Volkswagen Group joined 21 German companies in agreeing to a "mission statement for responsible actions in business", which serves as a national mission for the Volkswagen group and focuses the Volkswagen leaders on the benefits of responsible business to consumers. The six principles of this shared mission statement are: * Business must serve the good...
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...Executive summary Volkswagen is one of the biggest German automobiles manufacturing company, which operate all over the world. The main aim of the company is to become the first automobile manufacturer by 2018 and India became one of the key “element” in this strategy, since India the second fastest growing automobile market. Volkswagen India operates since 2001 when they presented Skoda brand to the Indian car market. Methodology For the following research was implemented realism philosophy, which means that both positivism and interpretivism approaches were used. The main tool, which was used in this particular research, was secondary data, as India country was chosen as a research area, so collecting primary data was impossible. Mainly the annual reports, journal articles and in some cases books were used. As India was chosen for the research, there was no ability to conduct the survey and use primary data. Situation analysis A. The internal environment Review of marketing goals and objectives * 15% annual growth rate for the next five years * To bring new technologies in car market of India * To increase market share twice, to 7% by 2018 * To explore India car market with new dealerships * Raise brand awareness of the company in India It should be mentioned that in order to increase quantity of customers and prove that Volkswagen is company Indian people could trust, Volkswagen introduces Polo GT TDI in 13 September 2013 with remark “German...
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...Volkswagen of America Case Questions & Answers: 1. What is your assessment of the new process for managing priorities at Volkswagen of America? Are the criticisms justified? Is it an improvement over the old process? To manage priorities at Volkswagen of America, a new process was implemented. It was the most efficient way of implementing a project in terms of selection and precedence,for the type of projects whose main aim was to meet the financial requirements in respect to the NRG goals. Although, there were some drawbacks in the system due to the way they evaluated all the projects using a type of ranking system.For example,if VWoA used a ranking system to select a project, their corporate did not fund for projects at the lower levels as they did not meet the company goals, even if the project would have a potential to gain success or a positive impact on the business. According to me, the criticisms are not justified, as the company derides IT as the main reason for increasing costs.This aspect of the company about IT is not completely true. The costs involved in IT projects should be considered as a long term investment which yields higher return. Therefore, the best way of selecting a project is through the ranking system which will not only help the project team choose the project easily on the basis of priority but helps in problem solving too. The new process however has helped in improving the business units in a big way because these business units...
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