Competitive Analysis of Volkswagen Company

Since its establishment, Volkswagen has grown into a formidable player in the global market (West, Ford & Ibrahim, 2015). For instance, the company has grown to be one of the largest US-based multinational companies In addition to car manufacturing; the company also provides financial services which are availed through the Volkswagen Motor Credit. Moreover, In 2017 Forbes magazine listed Volkswagen Motor Company as number #45car brand (Siano et al., 2017, p 28). Current statistics indicated that the company has established its operations and outlet in more than 62 countries As a result; the company has employed more than 199,000 employees as of 2016 (Siano et al., 2017, p 27). Presently, company figures indicate the firm generates an approximate income of $149,558 billion.

Explain how the organization can be adapted to make the company more competitive at a global level. In order to evaluate how Volkswagen if coming to remain competitive the following section is going describe various options variable to the firm to enhance its competitiveness in global business. Consequently, the section will evaluate such options by evaluating aspects of Volkswagen’s key resources, competencies, and capabilities.

Resources

Among the core resources that Volkswagen Company has included a strong financial background. Volkswagen has grown over years through the establishment of strategic business units which contributes to their strong financial background. For instance, currently, the firm offers financial services alongside the official business. The core source of revenues results from the sale of vehicles and another automobile. Since the 2007-29008 credit crunch that led to the crushing of the global lending agencies and consequently dwindling economic activities, Volkswagen has regained their operation and are financially stable which can be attributed to the heavy investment in technology and other forms of research and development. Secondly, the firm has got valuable physical resources which contribute to its efficiency. Currently, the firm has over 146 plants internationally (Siano et al., 2017, p 27). Furthermore, the form has got competent employees who ensure that creative ideas become the cornerstone of all innovations and the benchmark for quality products. Moreover, Volkswagen Motors has developed worldwide engineering release system (WERS) which allows all engineers and designers to share information within the company. Recommendable, to become competitive in the modern dynamic and competitive world, Volkswagen has to ensure that its resources are imitable and are well protected through relevant patent rights from one country to another based on the state’s laws regarding such innovations and creativity (Oldenkamp et al., 2016, p 121). Employees should be encouraged to be creative with motivation and help them implement creative ideas. The innovation of different products has to be promoted as this will ensure that the firm manufactures quality automobiles which are cost-effective compared to those from the opponents.

Capabilities

Volkswagen Company has got qualified designers who are responsible for the distinctiveness of the cars in the industry. Additionally, the firm has strong engineering culture that is used to produce a unique automobile. Besides, the firm has strong sales and marketing programs for their products opposed to other players in the industry and therefore it can capitalize on this to research new markets. Correspondingly, such core capabilities can be used by the company to ensure that they remain competitive by manufacturing quality and customized motor vehicles to suit customer lifestyle (Oldenkamp et al., 2016, p 122).

Competencies

Volkswagen Company exhibits several core competencies. For instance, the firm has well-established distribution channels covering more than 100 countries. The supply chain is well developed and coordinated compared to other players in the industry. Moreover, the firm has developed one of the best customer care services which have left many clients delighted. Furthermore, luxurious and prestigious unique designs for their products has benefited the firm greatly which is coupled with quality assurance statement and personnel overseeing the automobile manufacturing process. Moreover, the firm has embraced diversity in the recruitment process as well as diverse fund sources. In order, to remain competitive, the company has to ensure that all core competencies are well harmonized and integrated fully into the organizational process. For instance, the company can build on qualified employees to come up with innovative products which are above what competitors are offering to the market (Siano et al., 2017, p 29)

Integrate all stakeholders’ needs

To remain competitive globally, Volkswagen needs to ensure that they incorporate all needs of the stakeholders. The shareholders, employees, society, government, and others who are directly linked to the firm should be well addressed. Employees need to be motivated well through competitive salaries. Shareholders must be given value to their investment by maximizing their wealth to avoid them recouping their investment (Oldenkamp et al., 2016, p 121). At larger, the broader society needs to be taken care of. For instance, the firm must ensure that all vehicles are environment-friendly and that they cause less harm to life. In this way, the company will be set to compete with other rivals favorably.

Product diversification

Product diversification is another aspect that Volkswagen can utilize to remain competitive in the market. Through research and development, innovation and creativity, the company should develop new products. Diversification of automobiles will ensure that the company provides varieties to different markets and thus promoting its brand name globally. Additionally, product diversification has the capacity to maintain a company competitive in case one of the products is underperforming (West et al., 2015).

Suggest ways to improve the company’s strategic management process

Start with the issues: Under this suggestion, the CEOs and other board of management members are to talk about what the management strategic planning should encompass. Additionally, they should discuss encountering big challenges in the future and at the time using the challenges identified to spot opportunities and market niche to solve them within the market. Consequently, data analytics will be highly valuable at this stage as the projection and what if analysis have to be conducted for future modeling and discussing other aspects which can affect the performance of the business (West et al., 2015).

Execute strategic-performance-management systems

Execute strategic-performance-management systems to ensure that will ensure that accountability and responsibility are assigned to different people in a most transparent way to drive the realization of the company goals. Bring together the right persons: accordingly, strategic decisions are likely to have less impact on the business when key people are excluded from the participation and execution of the project. Different holders of diverse business and social levels have to be included in the strategic planning process (Oldenkamp et al., 2016, p 121).

Adapt planning cycles to the needs of every business

Due to the availability of business environment managers to ensure that they take into account every strategic business unit that Volkswagen has currently. As a result, therein need on part of the implementation team to ensure that they make every effort to implement many of the last plan key objectives which can take at least 18 months for easy evaluation. In addition, there is a need to Incorporate human-resource systems into the strategic plan to ensure that they are part of the decisions being reached as this will make it receive less resistance and thus being accomplished with more ease (West et al., 2015).

Focus on the customer

For Volkswagen Company to continue making suitable strategic plans, the company management has to ensure that they integrate customers into the decisions and strategy formulation. As importantly, customers are the basic purpose as to why a business entity exists. Consequently, the satisfaction of their needs and wants becomes the basic and classic way through which the firm can retain a large base of customers. The company has to ensure that they undertake customer surveys feedback in strategy formulation as this will help them in ensuring that they produce what clients want. For instance, to align the strategy formulation process with the firm’s objectives, the management has to ensure that they concentrate on what customers want in terms of lifestyle and preferences so that the automobile manufactured precisely satisfies the researched market needs (Siano et al., 2017, p 28).

Incorporate data the concept of big data analysis in decision making

Currently, many businesses have adopted the modern ways of predicting and analyzing their consumers’ behavior. Data analytics has become handy as it helps managed to come up with strategies that obtained from large databases which can easily help in assessing the likelihood of an industry or consumers and thus helping them to make informed decisions. By understanding customer purchasing behavior, time, frequency, and income, Volkswagen Company is likely to enhance the strategy formulation process and ensure that it is in line with the company core objectives (West et al., 2015).

Review your existing setup

Moreover, in order to improve their improve decision-making process; the Volkswagen management has to ensure that they do a review of existing strategies at an international level. In essence, the firm management should ensure that all the policies are reviewed alongside the expectations. All those strategies which are expensive and need a heavy investment to realize a high return should be reorganized or be done in phase to enable the company to satisfy and concentrate on strategies that affect the core operation of the company. Decisions are improved when past strategies are reviewed as challenges and opportunities associated with such policies are to be reviewed and become a trajectory for future strategy and decision formulations. Through this, the management can ensure that they are better placed to identify as well as eliminate areas of weakness and govern them the needed attention during the strategy formulation (West et al., 2015).

Implement a continuous improvement approach

Decision making in a company is regarded as a continuous process within an organization. The improvement plan will ensure that all strategies are evaluated on a competitive basis and thus easy to realize the required objectives. The approach will allow the management to assess the effectiveness of the strategies while at the same time benchmarking with other approaches and management decision that are being used by other companies in the industry (West et al., 2015). In addition, the company will be in a position to measure results progressively while evaluating the gains in each stage and identify the needed breakthrough approaches to mitigate the strategies which are deemed to perform low.

Use technology to improve decision making and operations

The management should also adopt information technology in the decision-making process. In so doing, the firm will be exposed to different Methods of operation which other firms are using to gain a competitive edge over them. Technology information when used in decision making can significantly lead to a low cost of operations as this entails the use of different information to arrive at a conclusive strategy which can save the company as far as expenses are concerned (West et al., 2015). Information technology can greatly help in strategizing the best e-commerce platform to be used and its effectiveness compared to others. Moreover, smart inventory decision can be achieved through the integration of IT in the management decision-making process.

Demographic Factors and Technological Factors

Importantly, in order to be fully competitive in the international market, Volkswagen has to ensure that it fully addresses the distinct demographic factors concerning its target markets for the right products at the right price. Demographic factors encompass things like gender, age, income, population size, geographic distribution, just to mention a few. According to a recent report released by the United States Census Bureau, among the top-most populated countries are China, US, Brazil, and India. Consequently, the report estimates that over 68% of the entire population in those countries composed of individuals who are 16 years old and above who are considered ready to own an automobile (West et al., 2015). In order to reach these countries to tap the potential in the automobile industries, Volkswagen has to form strategic partnerships and business with international dealers in those countries. For instance, the firm has to strategically engage dealers and open up more outlets in Europe, Middle East, Africa, South America, and many other regions, as this will help them reach a large customer base (Siano et al., 2017, p 27).

Subsequently, to serve the clients better, who are the key determinant of how a company is competitive internationally, Volkswagen has segmented their clients based on demographic factors and thus providing distinct automobiles based on clients’ buying power in terms of quality, income, age, social class, the unique preference among many other factors which fall under demographic segmentation (West et al., 2015). Customer satisfaction attracts their loyalty which is important in maintaining a reputable brand internationally. Conclusively, demographic and technological factors become the core pendulum that the firm can topple over to achieve a competitive edge in the market. The manner in which the Volkswagen Company is going to handle the two dynamic components will have a significant bearing on the firm’s future growth potential.

References

Siano, A., Vollero, A., Conte, F. and Amabile, S., 2017. “More than words”: Expanding the taxonomy of greenwashing after the Volkswagen scandal. Journal of Business Research, 71, pp.27-37.

West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage. Oxford University Press, USA.

Oldenkamp, R., van Zelm, R. and Huijbregts, M.A., 2016. Valuing the human health damage caused by the fraud of Volkswagen. Environmental pollution, 212, pp.121-127.