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 of location (Seat for Spain, Skoda for Czech Republic), class (Bentley and Bugatti for the wealthy, VW Passenger Cars for the cost conscious), or purpose (Scania and Man for large commercial trucks, Ducati for motorcycles). There is some overlap of offerings among the brands, creating the potential for cannibalization. All car manufacturers must wrestle with this to some degree, but