Global Strategy Case Study: Volkswagen Group

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. Volkswagen Group, an automobile manufacturing firm being one of the top rated company holding the third position in the global market share with almost 10.3% way back in 2008 with more than 370,000 employees working under it. It came up with an ambitious vision for the next 10 years to sell upto 6.6 million vehicle per year with a 21% rate of return on the Investment made along with the recognition of the top company standing at position 1 with best customer satisfaction and process quality.
VWAG faced many challenges and had certain opportunities in the way down the line to regain itself and to hold back the lost position. *Few of the major challenges were:
1. Fall in the Sales of car from 580,000 unit in 1997 to 280,000 in 2003.
2. Due
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Fall in market position from position 1 to 2 in the span of 3 years from 2001 to 2003.
4. Fall in the level of production level to 1.1 million in the year 1999, because of the severe regional and global crisis as the company was highly volatile in the nature.

*Certain Opportunities which the company had during that span of time were,
1. Volkswagen launched a van in 1956, where around 50% of its parts were manufactured in Brazil itself.
2. VWB earned 61% of its share by producing a reliable and inexpensive car in the Brazilian market in the year 1969.
3. Volkswagen launched its medium sized car which ran on ethanol fuel named Passat for export in international market which contributed around 40% in the Brazil automobile export.

*To overcome these challenges and grab the opportunities, Volkswagen made few strategies like:

1. Senn’s first task was to involve and reconstruct the best powerful local workers union by negotiation.
2. Volkswagen had a high vision to be an Industry leader in Innovation, quality, profitability and Sales in the South American Automobile Industry by building a team which would perform high more than expected.
3. Establishing a new culture in the Management to work which could sustainably improve its financial performance and a better production
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To encourage employees and workers inside the manufacture unit, various certain programs and rewards are needed to be given to the employees. However, several rewards system are being reinforced in the system for getting a desired behavior from the employees which is also done by evaluating the performance and getting the result, finding the gaps in the work and giving a proper and timely feedback.
To get the desired, the VWB made certain strategies and brought few measures in the system which are like:
1. Schell and Senn brought down several training messages which were linked with the compensation system of the employees performance result.
2. An executive Bonus was levied which was in accordance with the percentage of the goals and efficiency achieved.
3. VWB equally shared its annual result payment among all its workforce as per the terms to avoid any discrepancies.
4. Proper negotiation were made with the Trade unions and other Representatives annually.
5. Amount paid were in accordance with the performance made in the financial term as per the targeted achievement.
6. As per Schmall the best employee in the Organization must be recognized and rewarded in the best possible way which made a way for the competition in the performance and different project

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