Strategy Implementation of VOLKSWAGEN

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1 2012 Strategy Implementation of VOLKSWAGEN Department Of Business Administration, University Of Lucknow Submitted To: Prof. J.K. Sharma Submitted By: Ankit Kamal Roll No.06 MBA (EB) Sem IV

2 Index Introduction (3) Purchasing strategy of Volkswagen...(4) Marketing strategies of Volkswagen..(6) Volkswagen s Competitive Strategy..(7) VW s international strategy (8) VW SWOT Analysis.(10) [2]

3 Introduction Industry Automotive founded 28 May 1937 Founder(s) Ferdinand Porsche Headquarters Wolfsburg, Germany Area served Worldwide Key people Martin Winterkorn: Chairman of the Board of Management, Ferdinand Piëch: Chairman of Volkswagen Supervisory Board Products Cars Production output 4,591,851 units (2010) Revenue billion (2010) (US$119 billion USD) Employees 368,500 (2009) Parent Volkswagen Group Website [3]

4 Purchasing strategy of Volkswagen Volkswagen Group is one of the leading motor vehicle manufacturers in the world and the largest car maker in Europe Volkswagen Group delivered more than 5.7 million vehicles to customer in 2006 The Group operates 44 production and assembly facilities worldwide A workforce of over 324,000 employees all around the globe produces over 24,500 vehicles per working day Volkswagen Group products are sold in more than 150 countries Purchasing Strategy - Suppliers Vision Strategy Together best in class, in customer value and costs Costs and Customer Value Suppliers Regions Process & tools Staff & organization [4]

5 Conditions for Successful Achievements: Holistic implementation and strictly use of the methodologies in the group. Implementation of measures into action on schedule. Tracking of Introduced processes. Controlling of defined potential. [5]

6 Marketing strategies of Volkswagen Innovative campaign inspires 2,700 car recommendations in 4 weeks.. Innovative marketing strategies raise awareness Volkswagen India created groundbreaking campaigns such as the World s first talking newspaper, which used light-sensitive chips to speak to readers about Volkswagen as they turned the pages of their morning newspaper. The talking newspaper ad created a sensation in India, and garnered worldwide attention for taking print advertising to a new level. In one year, brand awareness more than quadrupled increasing from 8 percent to a high of 37 percent. Volkswagen next turned to digital media to extend its success and create new opportunities for customers to connect with the brand. Lutz Kothe, Head of Marketing for VW India, says, At Volkswagen, innovation is woven into everything we do. In formulating our digital strategy, we looked beyond the obvious for innovative ways to engage our audience. We knew that for many people, their car affects their professional life and their professional identity affects their car choices.this made LinkedIn a natural choice to connect with current and potential car buyers among the growing Indian professional population. Recommendation Ads get people talking Next, Volkswagen launched a series of Recommendation Ads encouraging more customers to join the conversation. Each ad showcased endorsements of actual LinkedIn members, and invited the community to recommend their favorite Volkswagen model. Volkswagen used LinkedIn s broad reach (100 million members worldwide, 9 million in India) and precise targeting capabilities to connect with professionals who matched the buyer propels for their different models. Lutz Kothe said, Volkswagen was the first [6]

7 company in India to use LinkedIn Recommendation Ads, and the campaign was a success. We went in with a goal of inspiring 500 recommendations among current and prospective car buyers. In less than 30 days, over 2,700 Volkswagen fans had stepped forward to recommend their favorite cars and share these recommendations with their professional networks. In the same time period, we gained over 2,300 followers who asked to stay abreast of the latest news and developments from Volkswagen. Kothe concludes, In a world where people spend an increasing amount of time at work, thinking about work, and interacting with their work colleagues, we believe it s important to foster discussion about Volkswagen products in a professional context. Our innovative partnership with LinkedIn lets our customers learn about Volkswagen products and provides insights. Volkswagen s Competitive Strategy in foreign Car Market Volkswagen(VW) is a world-wide Car maker, it headquarters is in Wolfsburg of Germany. The Group been founded in 1937, and now, it is incontrovertible that VW is one of the most successful car makers all over the world. The Group s car producing business can be divided into two brand groups, the Audi and Volkswagen brand group. The Audi brand of group is mainly made up of the Audi, Lamborghini and SEAT brands. The Volkswagen brand group includes the Volkswagen, Skoda, Bugatti and Bentley brands. The product ranges is very wide, it covered nearly all classes of cars, which extend from low-consumption small cars to luxury class vehicles. (Volkswagen AG, 2007). The financial service part of the group includes financial services for retail and insurance purposes. [7]

8 The VW Group Structure The Group has already operated 44 production plants in eleven countries of European, and other seven countries out of European, which have America, Asia and Africa. Now, VW has nearly 345,000 employees, in every working day it can produce over 21,500 vehicles, and sells its vehicles in more than 150 countries. VW s international strategy Dicken (2005) said, Outside Europe, VW is a major producer in Brazil and in Mexico. Within Europe, prior to the opening up of Eastern Europe, VW concentrated its production in two countries in a clear strategy of spatial segmentation. Highly value, technologically advanced cars was produced in the former West Germany; low-cost, small cars were produced in Spain where VW undertook a massive investment programmed in Seat. During 1990s, after the collapse of the Sovietdominated system, VW moved rapidly to establish production of small cars in eastern Germany and to take a 70 per cent stake in the Czech firm, Skoda.. Hence, the product of VW is thoroughly transnational. [8]

9 1. Distribution oriented multinational company: It can be started from the 1940s to the 1967, the VW Company tried to open a few production facilities out of Germany, which include Canada, the USA and France, the prime strategy was enter these big markets to get the market share and acquire cheaper labor. However, due to the lack link between foreign companies and the headquarters, the foreign factories were still using older methods and producing older models cars compared with the center plant for the national markets and they have relatively high autonomy from the headquarters. 2. Production-oriented multinational company : During the period from 1967 to 1990, the VW group changed their production network, it is a heart-stirring changing in VW s history, because the company plants were redefined in a transnational division of labor, the periphery plants were increasingly integrated into a global division of production, not only produces the older models than the center plants. Although the product structure and market strategies was still in center-periphery figure, the peripheral plants sill produced and sold older models, the gap of models closed slowly, and they gained an important role in the overall transnational division [9]

10 [10]

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