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Strategy Formulation at Audi

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Margot Cousland

on 4 November 2014

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Transcript of Strategy Formulation at Audi

Strategy Formulation at Audi
If we look at the company’s global value chain, it is clear that the majority of its activities are still located in Germany.
The company has, in fact, decided to relocate only part of its production activities, particularly to China.

What are the reasons behind these
> Brand Value $10.9 B
> Forbes List #43 World's Most Valuable

> Part of the German Volkswagen Group

> 9 production units

> "Premium" segment

> Homogeneous target market

History and Stats
Utilizing Current Market Trends

> Increase in global wealth and purchasing power

> Evolution of large emerging markets

> Cultural sense of meaning
The Importance of Globalization

- success of Audi as an international brand by encompassing the concept of globalization...

In order to develop its presence in new geographical markets, Audi has chosen to
favor export activities and the creation of
several 100 per cent-owned subsidiaries
(with the exception of the joint venture set up in China).

Question 1
Question 2
Mission Statement
Make people proud of their Automotor
choices by guaranteeing them
uninterrupted mobility
means of transport.
Vision Statement

in automotion
Globalization in China
- Audi's loyal emerging market

- Chinese socialism playing a large role in altering globalization functions and patterns

- Securing Audi's market position because of how long it's been established (reword)
> Upgrading foreign subsidiaries to
centers of excellence

> Diversify into different cultures

> Low labour cost

> Economic advantage
> Increased competition

> Expensive and lengthy
Reasons behind the choices
Volkswagen Group,
"Volkswagen extends cooperation with Chinese joint venture partner FAW Group for further 25 years", Press release found at

https://www.volkswagen-media-services.com/en/detailpage/-/detail/Volkswagen-extends-cooperation-with-Chinese-joint-venture-partner-FAW-Group-for-further-25-yearsview/1738600/7a5bbec13158edd433c6630f5ac445dap_p_auth=ndO0HLhX (10.10.14)

Krassnin, Dennis "
European automakers outsource production to eastern Europe and China
" Article found at http://www.wsws.org/en/articles/2014/04/09/germ-a09.html (09.04.14)

Audi AG, "
Mission Statement
", Article found at http://www.audi.com.cy/cy/brand/en2/company/Local_Events/2.html (2014)

Audi AG, "
Corporate Responsibility Report
" found at http://www.audi-cr.de/en/operations/ (2012)

Audi AG, "Considering the Value Chain" found at http://www.audi.com/corporate/en/corporate-responsibility/we-live-responsibility/operations/considering-the-value-chain.html (2014)

Schmid Stefan, Grosch Philipp, 2008 "
Managing the International Value Chain in the Automotive Industry
" Report found at http://www.escp-eap.eu/uploads/mediaManaging_the_International_Value_Chain_in_the_Automotive_Industr.pdf

Forbes, "Shifting production to central and eastern europe could boost profts of german automakers" article found at http://www.forbes.com/sites/greatspeculations/2014/06/23/shifting-production-to-central-and-eastern-europe-could-boost-profits-of-german-automakers/ (23.06.14)

What are the main advantages and
disadvantages for Audi associated
with these two forms of international
- Largest sales demand in Germany and Europe (50.8%)

- Strategy to keep most of the value activities in home country - need to create and sustain jobs and generate domestic growth within Germany

- Second largest sales demand in China (27.9%)

- Reduced costs in terms of exporting for vehicle manufacturers, keeping productions sites close to promising target markets

- Emphasis on German 'repertoire' of premium automobile engineering
Adaptation Vs Standardization ??
Margot Cousland - M00392189

Emilie Bjørdal - M00428160

Isabelle Tonheim - M00415210

Tutor - Dr Kinnari Pancholi

International Marketing - MKT3130
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