Volkswagen - Skoda Business Plan

BUSINESS PLAN

CHAPTERS

1. EXECUTIVE SUMMARY

1. ENVIRONMENTAL ANALYSIS

1. THE COMPANY

1. THE PRODUCT

1. THE MANAGEMENT TEAM

1.  MARKET RESEARCH AND PLAN

1. EXECUTIVE SUMMARY

The automobile industry is experiencing a dramatic transformation that will forever alter the way both new and used vehicles are marketed and sold as consumers change their operational structure and methods. Volkswagen - Skoda has recognized these shifting dynamics and positioned itself to take maximum advantage of rapidly-changing consumer and economic trends. Volkswagen - Skoda mission is to develop a more clearly defined brand identity, building a marketing message that reflected the fact that Skoda owners were extremely happy with their cars and the service support they receive. The aim was to convince potential customers, and the car industry as a whole, that Skoda cars were great to own and drive, especially as the costs of the improved VW car structure had pushed up Skoda prices. Areas of focus include sales techniques, leasing, finance and insurance. The economic results of the successful accomplishment of this mission will be significant profits both for dealer clients and for Volkswagen - Skoda.

As the automotive industry becomes increasingly sophisticated, dealers are looking outward for assistance in increasing new car sales, improving margins, containing costs, developing additional profit centres and designing programs that will meet consumer demands today and in the coming years. In response to consumer needs, Volkswagen - Skoda has developed an integrated system to allow dealers to achieve higher profit levels.

A Historical Perspective

In the early days of the automobile, horseless carriages were viewed with great suspicion. Adventurous consumers paid cash for the privilege of owning a motorized vehicle that could travel at breath-taking speeds of up to 30 miles per hour. The passage of time saw an evolution in vehicle technology. Banks began making automobile loans, which put car ownership within reach of the average person. Suspicion turned to tolerance and eventually to enthusiastic acceptance of the automobile as the world’s primary method of personal transportation. After World War II, factories were able to return to manufacturing consumer goods, and the automobile assembly lines were back in action. In 1939 came World War II with Czechoslovakia occupied by the Germans. The civilian car production programme was very limited and the majority of manufacturing was to support the German war effort. After the war, as part of large-scale nationalisation in Czechoslovakia, the company became a national enterprise. Although Skoda thrived in the then communist Czechoslovakia, it was mostly deprived of the new technological innovations that were taking place in the West and often faced economic and political turmoil. The Czech economy performed well up until the 1960s, then began to suffer because of new technology in more developed markets. Skoda continued to make new and improved cars – in the form of the Octavia, the Felicia, the MB range and the Rapid – but production really only grew again with the arrival of the Favorit model range in 1987. The huge political changes of 1989, when the Berlin Wall came down, brought new market economy conditions. The government of the Czech Republic and the management of Skoda began to search for a strong foreign partner to secure its long-term international competitiveness. In December 1990, they decided on a partnership with the German company Volkswagen (VW), and a joint venture began was established in 1991, with Volkswagen taking a 31% stake in Skoda, while the Czech government retained 69%.