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Transcript of Volkswagen
All these points conform the Keys to Success for any manager.
But the most important point Mr. Winterkorn remarks has not been mentioned yet, and this is...
· Main component to success: love and appreciate what you do.
· Essential for keep growing as a person, employer, manager...
· Added with Passion, the resulting outcome could be extraordinary.
2.1 Activity Scope
As well known as Range of the activity. Could be simply defined in a non-economic context as the area covered by a given activity or subject.
In an economic atmosphere it is known as the amplitude in all the the senses of the activity the company is performing.
Competences in which Company is competing and the competences the company wants to compete
Twelve brands in 153 countries Volkswagen Group's activities are focused on the automotive industry, the Group is not just an automaker, and also offers a variety of services related to mobility.
Each brand has its own character and operates independently, with its own identity.
1. Attitude of Martin Winterkorn
With a further reading of the annual VW report we can extract some basic aspects regarding the attitude of its president, Mr. Winterkorn.
Proactive and (Self)critical attitude.
Capability of anticipating changes.
Transmission of knowledge about different topics.
Encouraging people to trust in VW.
Homogeneous behavior and purposes among the whole company.
2.2 Components of current strategy (i).
1) Activity scope:
- Products involve the whole market (from average to high class)
-Different brands aimed to different customers.
- Aluminum and steel as most used materials.
- Manufacture cars
2.2 Components of current
2) Distinctive capabilities:
- Tangible (shares & bonds)
- Intangible (training courses)
Research & Development
Production and assembling
Commercialization and marketing
Basic materials produced
2.2 Components of current strategy (iii).
3) Competitive advantage:
· Differentiation and segmentation of the market.
· High quality product & Competitive price.
· Decrease the distribution cost.
2.2 Components of current strategy (iv).
· Modular Longitudinal Toolkit (MLB)
· Modular Diesel System (MDB)
· Pursuit of efficiency
3. How is the strategy
formulation of the firm?
As many big corporations, VW is using the Classic Process of Strategy Formulation.
It includes 3 main parts:
1. Strategic Analysis
2. Strategy Formulation
3. Strategy Implementation
-Focuses with the SWOT analysis (Strengths, Weaknesses, Opportunities & Threats).
- Depending on the magnitude of the strategy we can classify them as Corporate, Business & Functional ones.
- Before performing the final decision, VW contemplates possible changes is some of their areas (Leadership, Structure, HR or Information).
Relationship between company and environment. Basically. Where to compete.
How to compete.
How to optimize resources and capabilities
Innovations and technology =
= leader customers long term success.
Increase more than 10 million vehicles a year and reach major growth
Volkswagen aim is long term returns on sales before taxes ( solid
Most attractive employer in the automotive industry ( best vehicle,
high qualified employees)
Satifaction & quality
1) Free market behavior .
2) Free competition + Import export controls
3) Environmental protection (ecology), ex: CO2 reduction.
4) Employee rights.
5) Transparent business relationship (ex. Combating corruption).
3. Deliberate or Emergent Strategy? (i)
Aimed to: Expanding our products
Improving functionality, quality, safety, and environmental capability.
All the decisions VW Group make follow a deliberate / logical strategy formulation.
Collective vision, goals & intentions are planned and imposed with a clear purpose from the very beginning.
Volume, expansion of the consolidated gropup ( Porche & MAN)
Gross profit improved to 4.5 billion
3. Deliberate or Emergent Strategy? (ii)
VW number 1 concern is to become the leader of the market, but this is not an easy job.
To achieve that position, VW has set 4 goals to become the most successful in the world.
Financial management Volkswagen Group (Principles and Goals) :
-Management, currency, interest rate, commodity risk
management ,credit, country management.
Provide the most innovative technologies to satisfy customers.
Increase unit sales to more than 10 million vehicles a year.
Goals: ensure Volkswagen group remains solvent all time and to achieve
return from investment
Currency, Interest rate, commodity m. : Hedge prices which
based on financial instruments.
Investment + Production+ Sales
Credit + country risk aims : diversification and avoid risk/ loss default
Internalization limits defined (volume)
Get an 8% long term return on sales before tax to achieve a solid financial position.
Be the most attractive automobile employer (High qualified + Motivated Team).
2.3 Levels of strategy identified on the firm.