Volkswagen group- China's analysis in competitive strategy

Résumé du document

Chinas automotive industry growth reflects on China's economy, with it being one of the most dynamic and promising industries in the country. Volkswagen Group entered the Chinese economy thirty years ago, and therefore played an important role in shaping this industry. After giving the reader a quick overview of the current Chinese economical situation and its implication on the country's automotive market, this paper will examine Volkswagen Group's immediate industry and competitive environment before evaluating its related diversification strategy and cross business strategic fits along the value chain. In particular, this paper provides a study of the competitive strategies that the Volkswagen Group implemented to gain a sustainable competitive edge and become the market leader worldwide, including in China.

To remain a leader in the global market, Volkswagen Group's success story is one to be told. Volkswagen Aktiengesellschaft, often abbreviated to Volkswagen AG (VW AG), is the parent company of the Volkswagen Group; according to IHS Automotive, the biggest automotive manufacturer in 2011, with 8.44 million units sold1. Volkswagen hereby, has surprisingly soon, surpassed its two key competitors: General Motors and Toyota, both respectively number 2 and 3 in the world.

Extraits

[...] Analysing this company's strategy in China is all the more interesting since the Chinese automotive industry is the biggest and most dynamic worldwide This does not include all the cars sold, but only until Tons 6 and sells from core brands 4 Volkswagen Group Volkswagen Group Presentation The Volkswagen Group's performance in recent years has been outstanding and in 2011, the company attained an estimated 12 percent global market share. It counts more then 40 production plants around the world and has over 320,000 employees. Globally the Volkswagen Group is selling more cars than any other competitor, but the Group is especially strong in emerging markets (see Annexe 2). [...]

[...] Volkswagen hereby, has surprisingly soon, surpassed its two key competitors: General Motors and Toyota, both respectively number 2 and 3 in the world. Aside from the facts that the Volkswagen Group has for the first time in the company's history sold more than 8 million units and that the Group's overall performance is outstanding, reasons for this sudden leap to become the industry leader are: Toyota's extraordinary macro-economical circumstance: the company's production capacities being drastically affected by the past two tragedies in Japan, and General Motor's lack of innovation in the past years bringing them to an outdated product portfolio. [...]

[...] Volkswagen Group Divisions, Subsidiaries and Marques The Volkswagen Group is divided into two businesses: passenger and commercial vehicle businesses. In the passenger car business the Group is divided into two brand groups, on the one hand Audi and on the other hand Volkswagen. Audi's brand group is made up by brands that emphasize on sports values such as Seat and Lamborghini and it is the Group's custom to supply Audi with the latest technology from its different R&D departments. Only after the technology is successfully implemented in the Audi brand cars will it be available for the more classic Volkswagen brands, such as Škoda, Bentley and Bugatti. [...]

[...] Volkswagen Group entered the Chinese economy thirty years ago, and therefore played an important role in shaping this industry. After giving the reader a quick overview of the current Chinese economical situation and its implication on the country's automotive market, this paper will examine Volkswagen Group's immediate industry and competitive environment before evaluating its related diversification strategy and cross business strategic fits along the value chain. In particular, this paper provides a study of the competitive strategies that the Volkswagen Group implemented to gain a sustainable competitive edge and become the market leader worldwide, including in China. [...]

[...] Volkswagen's path describes three major sections: Firstly, from 1967 to 1974; than moving away from Fordism2 into a period of reorganization, and optimization from 1975 to 1988; and finally, from the beginning of the nineties onwards the restructuring of the Volkswagen's industrial model. One major element consists in revitalizing the company through a product strategy. This strategy remains valid until today and has since then fructified. The groups' product range is remarkably wide from low consumption small cars and trucks to luxury limousines. In 2012 Volkswagen Group comprises ten active automotive companies and their corresponding brands3, as well as an established financial service, coaching service, IT-service, among others. [...]