Volkswagen do Brasil’s new CEO Thomas Schmall is facing the impact of the global financial crisis and has to make a decision about how to continue his implementation of the company’s new strategy. This paper will reflect the problems Volkswagen do Brasil (VWB) is facing in trying to continue its course towards a new vision and possible scenarios will be outlined. In the end, the management decision offering the best future prospects for Volkswagen will be distinguished.
After being appointed as new CEO, Schmall wanted to get over Volkswagen do Brasil’s previous strategy of efficiency concentration as quickly as possible. The earlier goals of cost reduction, employee and capacity downsizing were replaced by a long-term rebranding and restructuring …show more content…
Reducing spending for restructuring will clearly affect the future market chances of VWB. The Brazilian society changed in the latest decades, today 85% of the citizens live in urban surroundings, half of them in far developed and industrialized areas. The demographics and society’s needs will not be impacted on the long-term by a temporal economic downturn. The predictions used for the balanced scorecard were long term oriented, Brazil will certainly develop into diversified consumer markets independent of the crisis. The broad success of the new objectives prior to 2009 indicates the right idea behind VWB’s rebranding, while cutting back now could kill the enthusiasm permanently. Which would preclude meeting the objectives after the financial crisis is …show more content…
The automotive sector produces 19% of the Brazilian GDP and employs over 1.5 million people. VWB as one of the biggest producers in the country can effectively absorb the power of the crisis by not cutting jobs or reducing production volume. Additionally, temporary workforce and other recourses tend to be easy available in times of economical downturn. A perfect environment for VWB to apply major changes in their facilities. Long-term goals like higher product quality, sustainable process efficiency, or broad employee involvement in strategy decisions are clearly not impacted by a temporal decline in sales revenue and will evidentially lead to a superior performance in the long-term. Still, resuming to a higher production level while no demand of equal volume is foreseeable, is not reasonable. This would lead to high inventories of finished products on VWB’s and dealer’s sides, resulting in immense write offs. The negative perception of reduced production volume might be overcome by clearly sharing information about the low demand of cars during the
After being appointed as new CEO, Schmall wanted to get over Volkswagen do Brasil’s previous strategy of efficiency concentration as quickly as possible. The earlier goals of cost reduction, employee and capacity downsizing were replaced by a long-term rebranding and restructuring …show more content…
Reducing spending for restructuring will clearly affect the future market chances of VWB. The Brazilian society changed in the latest decades, today 85% of the citizens live in urban surroundings, half of them in far developed and industrialized areas. The demographics and society’s needs will not be impacted on the long-term by a temporal economic downturn. The predictions used for the balanced scorecard were long term oriented, Brazil will certainly develop into diversified consumer markets independent of the crisis. The broad success of the new objectives prior to 2009 indicates the right idea behind VWB’s rebranding, while cutting back now could kill the enthusiasm permanently. Which would preclude meeting the objectives after the financial crisis is …show more content…
The automotive sector produces 19% of the Brazilian GDP and employs over 1.5 million people. VWB as one of the biggest producers in the country can effectively absorb the power of the crisis by not cutting jobs or reducing production volume. Additionally, temporary workforce and other recourses tend to be easy available in times of economical downturn. A perfect environment for VWB to apply major changes in their facilities. Long-term goals like higher product quality, sustainable process efficiency, or broad employee involvement in strategy decisions are clearly not impacted by a temporal decline in sales revenue and will evidentially lead to a superior performance in the long-term. Still, resuming to a higher production level while no demand of equal volume is foreseeable, is not reasonable. This would lead to high inventories of finished products on VWB’s and dealer’s sides, resulting in immense write offs. The negative perception of reduced production volume might be overcome by clearly sharing information about the low demand of cars during the