Question

Volkswagen builds on strengths in global markets Vi olkswagen V) once toyed with the idea o building a 'global car, one model suited for all production in lower-cost locations. from where it exports to other markets. markets, whether Europe, the US, China or India. Those days are now gone, and the company's strategyGermany. It has been manufacturing cars in Puebla is to build cars tailored to consumer needs in each market, using its strengths as a global company to be has changed over the years. Initially, it produced small competitive in each. Its engineering strengths are formidable, centred in its home market in Germany. It is headquartered in Wolfsburg in the State of Lower Saxony, where it operates six factories. As Lower Saxony is also one of its main shareholders, VW's strategy is partly influenced by domestic political concerns. It operates 15 factories altogether in Germany, employing 195,000 people, 47% of it workforce. Its factories have built up specialist expertise in component manufacturing for the whole network: they include specialist makers of engines gearboxes and steering units for the group. Its strengths in component manufacturing - some for other car manufacturers have helped Germany to gain pre-eminence in export markets. Germany is a high-cost location, but the company has implemee existing BMW and Mercedes plants. The current climate agreed cost reductions, including wage freezes. Vw has also maintained its competitiveness by globalizing Mexico is home to the largest VW plant outside Mexico since 1965, but the focus of these operations cars mainly for the Mexican market, but it gradually shifted to production for export: 80% of its output is now exported. Following the Nafta agreement of 1995. VW was able to export its Mexican-made cars freely into the US. Puebla now manufactures a range of models, including the New Beetle and Jetta models for export globally. Europe remains VW's biggest market, and it has trailed behind other foreign manufacturers in the US (see figure). Japanese carmakers, as well as German luxury rivals, such as BMW, invested in greenfield sites in the US from the 1980s onwards, and have built market share. VW has now, belatedly, followed in their footsteps, with a factory in Chatanooga, Tennessee. Its location is close to a network of supplier companies which serve s global in the car industry, which has seen falls in global sales s perhaps not the best time for new greenfield |GERMANY

Answer 1

Volkwagen is an international automotive company and has its presence in banking and finance also. It has advantage to provide high end cars as well as small sized cars for lower segment of the society internationally and this has 12 different  brands to offer which includes both passenger cars as well as commercial vehicles.

SWOT Analysis.

Strengths: Volkswagen's strength lies in its wide brand offering, ranging from Bentley, Lamborghini, Audi, Porsche, Volkswagen, Skoda, Seat and commercial vehicles, i.e. buses and trucks and is the largest among all top auto makers in terms of different brand offering and internationally operates in 150 countries approximately with 100 manufacturing units.

It focuses in providing in customized products across different markets and this strategy is paying it and that's why it has made presence in emerging markets like Brazil, China, India, etc.

Weaknesses: Its weaknesses: its diesel scandal happened in 2015, a big hit to its image and branding and biggest recall in history in US

Opportunities: It has biggest opportunities in operating in emerging markets like India where small cars a popular one and biggest success strategy for them and that's why it has two manufacturing units in India, one for Skoda and second for Polo and Skoda has already made its name and in-roads into Indian market and Polo is also making its in-roads into Indian market slowly and steadily in terms of small cars and competing well with other brands.

Volkswagen's Together-Strategy 2025 and to adopt and invest in battery operated electric cars and driverless and its aim to make more than 30 electric cars by 2025 shows its commitment to the environment and its need for transformation.

Threats: Threats in terms of competition from other leading auto majors like Toyota, General Motor, BMW, etc. and to survive and increase its market share and give value to its customers and continuously make customized products for its customers internationally and simultaneously increasing manufacturing cost.

PESTEL

Political: Political uncertainty internationally and its impact on its sales. US-China trade war is also affecting its sales globally.

Economic: Recent increase of import duty by US on imports on Aluminium and Steel and US and economic slowdown/slowdown of GDP of China and its impact on its sales and local laws regarding import tariffs and local red-tapism.

Social: Impact on its image and its impact on employment generation

Technological: Technological advancement and investment in research and development.

Legal: Local laws and procedure.

Environmental: Effect on environment.

Volkwagen's strategy in international expansion : To capture Indian market it has focused to make popular its Polo brand and has also established its manufacturing unit in India for Polo and its has already one unit for Skoda and Skoda is already doing good in Indian market and to expand its international operations it is establishing its manufacturing units/plants in low cost countries and where labor is cheaply available along with local talent and that's why it has opened its manufacturing units in Mexico, China, India and from its Mexican unit it is getting benefit of free trade through NAFTA and exporting 80% of its Mexican manufactured cars to USA and it is manufacturing and exporting its cars from China and India and exporting mainly to Europe its biggest market and this is very good cost saving and expansion strategy.