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Transcript of Volkswagen
Potential entrants: In the automobile manufacturing industry, the threat of new entrants is relatively low due to the important financial capital required, the missing Brand Name recognition, and the difficulty to achieve economies of scale.
Chairman of the Board of Management
Doctorate in Metal Research and Metal Physics
On 1st January 2007 Prof. Dr. Martin Winterkorn became Chairman of the Board of Management of Volkswagen AG
At the same time, he became Chairman of the Supervisory Board of Audi AG
The VW Umbrella
Improved Quality/Blue Motion
Largest Output for Automaker
Strong Brand Portfolio
Chairman of the Supervisory Board
Five Forces Model
Rivalry: The rivalry in this industry is very strong. The moderate numbers of competitors makes the rivalry intense, even though firms might compete for different consumer segments. Adding to the rivalry is customer loyalty to their favorite brand.
Five Forces Model
Buyer Power: The buyer power is high in this industry, because without them buying your cars, it is impossible to survive in this industry. It also doesn't cost much for buyers to switch to another brand of vehicle or to start using other types of transportation.
Does Volkswagen have a competitive sustainable advantage?
Founded on May 28th, 1937 by the German Labour Front
The original founder was Ferdinand Porsche
The company was named Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH, but was later renamed Volkswagenwerk, or "The People's Car Company."
Originally unpopular in the United States, the Volkswagen unveiled a new distinct car and name that increased popularity among Americans. This car was the Beetle.
Over the next several years, VW became the top-selling auto import in the United States.
In 1960, the German government sold 60% of Volkswagen's stock to the public, effectively denationalizing it.
The Beetle surpassed the longstanding worldwide production record of 15 million vehicles, set by Ford Motor Company's legendary Model T between 1908 and 1927.
International presence and influence
12 Internationally recognized brand names offering automobiles at any level of the market from inexpensive and affordable to expensive and luxurious
Manufacturing; #1 automobile manufacturer in Europe
Plant and Equipment; Over 150 global manufacturing plants
Most automobile models struggle with the global trend of environmental friendly automobiles
Weak presence in the American automobile market
Focused too much on diesel fuel automobiles
Research and Development
Electric car market; Open to "green" automobiles
Plans to become the largest global automobile manufacturer by 2018
Commercial vehicles, mainly buses
Continued growth by acquisition
Competition automobile manufacturers such as Toyota, General Motors, Honda, and Ford
European exchange rate
Global fluctuation of fuel prices
Economic and environmental leadership
in the global automotive industry
“Our human resources projects are a decisive factor for the past and future success of our company. We are able to employ various instruments that enable us to respond quickly and flexibly to fluctuations in employment, and so secure jobs for the long term. "
This is good for our customers and for our workforce, for whom we are able to provide attractive working conditions. It also forms the basis for creating a good balance between working and living.
The goal "Volkswagen as Top Employer" is a clearly defined element of the corporate strategy of the Volkswagen Group. For Volkswagen it means:
• Attractive employment
• Job security
• Good working climate through leadership and cooperation
• Personal development opportunities
• Product and company image
Ferdinand Karl Piech
Formerly the CEO of Audi
Piech became the chairman and CEO of Volkswagen Group, which he is credited with turning into the large conglomerate it is today
Expansion of brand and product portfolio
Increasing global footprint and an emerging markets presence
Realization of cost savings, toolkit modularization and localization of products
Creation of sustainable value
Diversified portfolio of drivetrain technologies
Continuous improvements in internal combustion engines
Leadership in alternative powertrain technologies
High quality standards
Volkswagen Group doesn't have an official mission statement. The closest statement that could be called VW Group’s mission is expressed as the company’s goal:
“The Group’s goal is to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class.”
Supplier Power: In this industry, the power of suppliers is relatively low because of the large number of suppliers that are on the market (some are large, but most of them are small and depend on the automakers to survive), and the material to produce cars is widely accessible.
Substitute products: This force is high because customers are able to get a car from another brand, with low switching cost. In addition to the threat of other brands, customers can choose to use other ways of transportation like buses, subways etc.
Economical slow down over Asia
Recession in Europe
Not achieving has much in American Passenger market
Not changing to customers needs
Opportunities as CEO
As rising of fuel prices; build more efficient cars
Growing through acquisition
Growth in the Bus Market
Plants and Equipment
Volkswagen has a short term competitive advantage. It is a valuable company and it also is very rare. However, it is not in-imitable and non substitutable.
Marketing & sales
Offer vehicles for every part of the market