Strategic Analysis of Volkswagen

1.0 Introduction

The Volkswagen Group is one of the world leading automobile manufacturing companies from Germany and the largest car maker in Europe. Volkswagen is a German word meaning "People's car." Volkswagen was founded in 1937 by Ferdinand Porsche. It has more than 3,658,500 workers and revenue of 94.7 billion euro (Duhansumeet, 2012) by under the leading of Martin Winterkorn, the current chairperson of Volkswagen. Volkswagen has used a lot of strategies to achieve a leading position in the automotive industry. Strategies are important for a company which not only pose benefits but also give challenges that company should face and work for the further success. Volkswagen Group’s goal is to offer attractive, safe and environmentally sound vehicles which are competitive on an increasingly tough market and which set world standards in their respective classes. This assignment would be further talk about how Volkswagen leading in automobile industry by using their grand strategies and global strategies.

The latest grand strategy of Volkswagen  (Volkswagen, 2014) focuses on positioning the Volkswagen Group as a global economic and environmental leader among automobile industry. Volkswagen intends to translate customer voice into their technical in order to meet the satisfaction of customer. Volkswagen intends to capture an above-average share of growth in the major growth markets and their aim is a long-term return on sales before tax of at least 8%  (Volkswagen, 2014) to ensure their solid financial position. Besides, Volkswagen aims to be the most attractive employer in the automotive industry by 2018, in order to build the best automobile. There are four goals that are intended to make Volkswagen to be more success, fascinating and sustainable automaker in the world.

2.0 Remote Environment Analysis

2.1 Opportunity

i. Ecological Factor

Global Demand for Green Vehicles (Electric or Hybrid)

Demand for electric vehicles is growing at a fast pace around the world. According to new analysis from the Centre for Solar Energy and Hydrogen Research, more than 320,000 new electric vehicles registrations in 2014, bringing the total global market up to 740,000 vehicles (Samaras & Meisterling, 2008). It is clear that more environmentally friendly vehicles represent a huge opportunity for Volkswagen. Hybrid or electric cars are the most commercially mature and viable of the various kinds of alternative vehicles and have demonstrated the potential to reduce fuel consumption and exhaust emissions. Currently with only a few major green vehicles models such as Tesla Model S, Nissan Leaf, Chevrolet Volt and Toyota Prius, there is still a huge opportunity for Volkswagen to enter the green vehicle market.

ii. Technological Factor

The Need for Connected Vehicles

The improvement of technology has made automaker to bring technology into their product. Consumers need to stay connected at all times. A study conducted by Capgemini shows that connectivity technology increases the ownership experience. Consumers want their car to have all the technology they have in their life. A “connected car” links the driver and car to environment through internet and wireless network. Examples of connected technologies are application for navigation, automatic notification of emergency resources, remote system diagnosis and access to music and news. The greatest interest is application that links to driving experience and vehicle`s safety (My Car, My Way, 2013). Thus, Volkswagen can increase its sales by providing cars with connected features such as navigation, Bluetooth, audio and software applications.