Case Study Audi
The Volkswagen Group
Table of Contents
1. Executive Summary - 4 -
2. Major Issues at Stake - 5 -
2.1.1. Corporate Level Challenges - 5 -
2.1.2. Is the Volkswagen Group still able to differentiate its brands? - 5 -
2.1.3. Is the Volkswagen’s 2018 sales objective coherent with market demand and growth? - 6 -
2.1.4. Is the financial risk a major issue for Volkswagen? - 8 -
2.2. Audi’s Challenges - 10 -
2.2.1. How does Audi face international competitive environment during its expansion? - 10 -
2.2.2. Are the sales in developing countries, and more particularly in BRIC countries, sustainable? - 12 -
2.2.3. Hungarian plant: how to manage the international value chain? - 13 -
2.2.4. What innovation strategy to adopt? - 15 -
3. Recommendations - 15 -
4. References - 18 -
Appendix - 19 -
Appendix 1: Brand positioning - 19 -
Appendix 2 : VW – Unit Sales Split by Market (2011) - 20 -
Appendix 3 : Traditional value chain in the automotive industry - 20 -
Appendix 4: Manufacturing plants - 21 -
1. Executive Summary
In its 2018 Strategy, the Volkswagen Group expressed its goal to become a leader in the automotive industry. It bases its strategy on three pillars: economic performance, ecological innovation and thus society fascination. “Our aim is to make the Volkswagen Group the leading automaker by 2018 – economically and ecologically.” said Dr. Martin Winterkorn, Volkswagen’s Chairman of the Board of Management. Concretely speaking, the Volkswagen Group aims at being the global leader in terms of unit sales, customer satisfaction and profitability. We found out the major issues that could prevent the company to attend its ambitious aims and solutions to avoid these issues: •The brand confusion: There is a risk that the different brands of the Volkswagen Group start to compete against each other since they are increasingly launching the same market segments. Our recommendation to avoid this issue is to stop the expansion of Volkswagen with
Table of Contents
1. Executive Summary - 4 -
2. Major Issues at Stake - 5 -
2.1.1. Corporate Level Challenges - 5 -
2.1.2. Is the Volkswagen Group still able to differentiate its brands? - 5 -
2.1.3. Is the Volkswagen’s 2018 sales objective coherent with market demand and growth? - 6 -
2.1.4. Is the financial risk a major issue for Volkswagen? - 8 -
2.2. Audi’s Challenges - 10 -
2.2.1. How does Audi face international competitive environment during its expansion? - 10 -
2.2.2. Are the sales in developing countries, and more particularly in BRIC countries, sustainable? - 12 -
2.2.3. Hungarian plant: how to manage the international value chain? - 13 -
2.2.4. What innovation strategy to adopt? - 15 -
3. Recommendations - 15 -
4. References - 18 -
Appendix - 19 -
Appendix 1: Brand positioning - 19 -
Appendix 2 : VW – Unit Sales Split by Market (2011) - 20 -
Appendix 3 : Traditional value chain in the automotive industry - 20 -
Appendix 4: Manufacturing plants - 21 -
1. Executive Summary
In its 2018 Strategy, the Volkswagen Group expressed its goal to become a leader in the automotive industry. It bases its strategy on three pillars: economic performance, ecological innovation and thus society fascination. “Our aim is to make the Volkswagen Group the leading automaker by 2018 – economically and ecologically.” said Dr. Martin Winterkorn, Volkswagen’s Chairman of the Board of Management. Concretely speaking, the Volkswagen Group aims at being the global leader in terms of unit sales, customer satisfaction and profitability. We found out the major issues that could prevent the company to attend its ambitious aims and solutions to avoid these issues: •The brand confusion: There is a risk that the different brands of the Volkswagen Group start to compete against each other since they are increasingly launching the same market segments. Our recommendation to avoid this issue is to stop the expansion of Volkswagen with
References: • Audi versus BMW, Mercedes-Benz, Tom Libby,March 21, 2012 • Article from L’Argus, a French magazine http://www.largus.fr/actualite-automobile/la-strategie-de-marques-du-groupe-volkswagen-11426.html • Regards sur l 'économie allemande 80 (2007) Varia, Authors: Sylvie Hertrich and Ulrike Mayrhofer, Audi AG : un succès signé made in Germany • http://www.diamond-congress.hu/fisita2010/plenaries/pdf/hatz.pdf Appendix 2 : VW – Unit Sales Split by Market (2011)