Swot Analysis Audi Essay Example
Strengths
Strong parent backup
Audi operates a subsidiary of Volkswagen. Volkswagen is one of the leading global automotive companies engaged in the development of vehicles and engines, production and sale of passenger cars, commercial vehicles, trucks and buses, and genuine parts business. Volkswagen is the second largest automotive company in the world with a presence in more than 153 countries. In FY2010, the company recorded revenues of E126,875 million ($168,325.1 million). Moreover, Volkswagen was ranked 13th in the Fortune Global 500 list of companies. Audi’s parent company’s strong position gives it significant competitive advantage and helps the company to register higher sales growth in domestic, as well as in international markets.
Effective allocation of resources as compares to peers
The company has high return on equity (ROE) and return on assets (ROA) compared to its peer companies. The company’s competitors such as BMW and Daimler have less ROE when compared to Audi. In FY2010, BMW’s ROE was 13.9% and Daimler’s ROE was 12.4%, significantly less than Audi. In contrast, Audi’s ROE was 23.1% in FY2010. This high ROE indicates that the company is using the shareholders’ money efficiently and that it is generating high returns for its shareholders compared to its peer companies.
Similarly, BMW and Daimler have less ROA when compared to Audi. In FY2010, BMW’s ROA was 2.9% and Daimler’s ROA was 3.3%, significantly less than Audi. The ROA of Audi was 8.4% in FY2010. High ROA indicates that the company has been deploying its assets in an efficient manner and indicates the efficient management of the company towards allocation of resources compared to its peer companies.
Weaknesses
Concerning product recalls
Audi announced recalls that cover some of its most popular models due to manufacturing and design problems. For instance in August 2011, the company recalled 34,000 lemon Audi A4 and Audi A6 vehicles due to defective engine fuel pump.
Strong parent backup
Audi operates a subsidiary of Volkswagen. Volkswagen is one of the leading global automotive companies engaged in the development of vehicles and engines, production and sale of passenger cars, commercial vehicles, trucks and buses, and genuine parts business. Volkswagen is the second largest automotive company in the world with a presence in more than 153 countries. In FY2010, the company recorded revenues of E126,875 million ($168,325.1 million). Moreover, Volkswagen was ranked 13th in the Fortune Global 500 list of companies. Audi’s parent company’s strong position gives it significant competitive advantage and helps the company to register higher sales growth in domestic, as well as in international markets.
Effective allocation of resources as compares to peers
The company has high return on equity (ROE) and return on assets (ROA) compared to its peer companies. The company’s competitors such as BMW and Daimler have less ROE when compared to Audi. In FY2010, BMW’s ROE was 13.9% and Daimler’s ROE was 12.4%, significantly less than Audi. In contrast, Audi’s ROE was 23.1% in FY2010. This high ROE indicates that the company is using the shareholders’ money efficiently and that it is generating high returns for its shareholders compared to its peer companies.
Similarly, BMW and Daimler have less ROA when compared to Audi. In FY2010, BMW’s ROA was 2.9% and Daimler’s ROA was 3.3%, significantly less than Audi. The ROA of Audi was 8.4% in FY2010. High ROA indicates that the company has been deploying its assets in an efficient manner and indicates the efficient management of the company towards allocation of resources compared to its peer companies.
Weaknesses
Concerning product recalls
Audi announced recalls that cover some of its most popular models due to manufacturing and design problems. For instance in August 2011, the company recalled 34,000 lemon Audi A4 and Audi A6 vehicles due to defective engine fuel pump.