Essay on Volkwagen Analysis

7841 Words May 2nd, 2015 32 Pages

Table of Contents

Executive Summary p.3
Global Business Environment p.5
Key Competition p.8
Technology p.10
Legal and Regulation p.13
Culture and Society p.15
Sustainability p.18
Stakeholders p.22
5year Operating Performance p.26
Conclusion p.28
Work Cited p.34

Executive Summary

Volkswagen is a German automobile manufacturer founded in 1937 by the Nazi Trade Union. In the mid 1930’s, with the German economy in a depression and the German auto industry composed of mostly luxury vehicles, the Germany people couldn’t afford any of the cars. This opened a new market for the “peoples’ car” in Germany. Volkswagen, which means “peoples’
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There are four key elements that lead to Volkswagen’s recent success. The first element is Volkswagen’s growing success in extracting scale economies from its extensive brand portfolio. Volkswagen is combining higher production volumes with cost reductions to create enormous profits. The growth of Audi, which is owned by Volkswagen and can compete with BMW and Mercedes-Benz in the premium sector of Volkswagen, is the second key component. In 2011, Audi had an operating profit 74% higher than the year before, and its margin increased from 8.7% to 12.2%. The third key component is global success, and more specifically success in China. There, Volkswagen is having success in both the mass market and the premium sector, where Audi is the best selling brand. 26.7% of Volkswagens world wide sales are in China as of 2010, and this number increased to 27.4% in 2011. The final component to Volkswagen’s success is the acquisition of Scania, which has boosted operating margins for the group. In 2011, Volkswagen’s operating margin of 7.7% would have been .5 points lower in the absence of Scania.
VW is currently focused on expanding into one of the largest and most widespread motor vehicle companies in the world. They are focusing on increasing their production in Brazil and China, areas where the company has not yet reached its highest potential. In order for the company to be successful worldwide, VW is

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