Volkswagen Essay Example | Topics and Well Written Essays - 2000 words - 1

Volkswagen - Essay Example Additionally, the paper also discusses the company’s SBUs and growth strategies to assist the creation of a clearer stance on the development of Volkswagen’s strategic direction. Appraisal of strategic decisions is also conducted to provide direction for further considerations and research. Recommendations focus on the expansion of Volkswagen in developing markets by application of current strategies and the enhancement of its position in the markets of India, China and Brazil. 1. Introduction As one of the key players in its industry, German automobile manufacturer Volkswagen stands as the 14th largest company in the world according to Forbes (2013). Relying on the foundations of advancing corporate social responsibility and sustainability through its operations, Volkswagen’s mission extends to the provision of customer satisfaction, which is a practice that the company hopes would lead to its attainment of the first position in the global automotive industry by the year 2018. For the purposes of realizing its objectives, the company implements and follows what is known as a group strategy across its departments in order to fulfill its aim of recording 10 million sales of automobiles in a year and generating a pre-tax profit margin of 8% (Volkswagen 2011). This report comprehensively covers the aspects of Volkswagen’s strategic position and strategic direction in addition to a critical evaluation of Volkswagen Group’s strategy to highlight the company’s path in meeting its long term objectives effectively. 2. ANALYSIS OF STRATEGIC POSITION 2.1 External Analysis In examining the external position of Volkswagen Group, this section of the report utilizes the evaluations of tools such as the PESTEL analysis, Porter’s Five Forces analysis and the industry life cycle. 2.1.1 PESTEL ANALYSIS POLITICAL The UNECE agreement introduced in 1958 was initiated by the EU to provide an incentive to automakers operating within th e political region by diminishing compliance costs. While, the UNECE agreement is critical to enhancing Volkswagen’s cost efficiency the Cars 2020 reform proposed by the EU will allow the company to expand its geographical reach (European Commission 2013). ECONOMIC Following the global economic downturn, analysts such as Pearson (2013) are predicting a gradual and steady recovery in Europe’s demand for automobiles which had diminished to a great extent. Both the consistency in demand for cars outside of the EU and a revival in demand within the EU is a positive sign for Volkswagen Group. SOCIAL The market positioning of Volkswagen’s brands has significantly assisted its aim of catering to the unpredictably of social transitions and changes in consumer preferences. By balancing cars that offer great value and automobiles such as the Phaeton that is designed for the high-end customer, Volkswagen Group is greatly equipped with facing any amendments with regards to social factors. TECHNOLOGICAL Volkswagen has increased its investments in R&D and constant innovation owing to the competitiveness of the automobile industry. The relentless efforts of the company’s R&D and innovations department have led to the development of technologies such as BlueMotion, Assistance systems and TDI. ENVIRONMENTAL