Internal Analysis- Value-Chain Analysis

Volkswagen produces most of the units needed for the production of an automobile. However, most of the details part of those units are produced by other companies. The company has plants in all of the continents and each plants produces only for the local market. One reason for that decision is lower expenses when details and cars are not shipped longer distances and the other is helping the local economy. The decision the other companies took is to produce different models in different plants. However, VW factories manufacture many models at the same time.Another majour product Volkswagen supplies to its customers is the original parts. The company has several  majour warehouses in different areas and every single dealer orders separately and directly to VW, which make the transportation of the parts much faster.A new factory was recently built In Chatanooga, which was not only the next VW factory but it introduced a lot of environmental friendly technology. See more details here: http://www.youtube.com/watch?v=sDLNcxrkIpQ

Volkswagen's assembly line is the longest in the automobile world because of the number of operations needed to produce a car. Most of the operations are done by robots which decreases waste, enery and time needed. However, people still work in the assembly line but they mainly do the quality checks. A different factory is the class factory in Dresden. Volkswagen produces Phaeton (unfortunately, the model is not offered in the USA) and some of the Bentley models (dont't forget that Bentley is in fact Volkswagen's brand). Most of the work there is manual. The Transparent Factory is situated in the city center of Dresden, the 800-year-old German city known for its arts and craftsmanship. It stands at the former location of the convention center. The factory's walls are made almost completely of glass. Its floors are covered entirely in Canadian maple. Its visitor-friendly layout was designed to accommodate up to 250 tourists per day. The transparent factory handles final assembly only. To keep birds from flying into the glass, an outdoor speaker system emulates bird language marking the territory as "taken."

Volkswagen ships cars mainly to the same continent using boats, trains and trucks. There are  logistics centers in several areas where cars are shipped to the single dealer. No cars are produced without being ordered by somebody, which means that cars are not stored anywhere. They are produced for the customer. Then how do we see all those cars parked in the dealers' yards? Well, Dealers order and purchase those cars so that you can see and touch your car before you buy it. However, those are not considered stocked by the Volkswagen company but by the franchiser company. 

The Volkswagen brand is recognized worldwide. Beautiful logo almost unchanged for decades. The company has a full list of brand standards that has to be followed in each advert produced or in each product offered- placement of the logo, font style, colours, architecture. The company offers various models- from the tiny Up to the luxurious Phaeton and Touareg, which suggests that the company has different price policy for all of them. The company is aiming at world leadership and to achieve that it introduced new models- Schirocco, CC, Tiguan, Up, new techonoly which makes the cars more efficient and new production technology which makes the cars cheaper without decreasing the quality of the materials and the final product. The company carefully examined which feature is most popular and slightly changed what equipment is offered with each model. For instance the biggest engines are no longer offered with the New Jetta and the smallest ones are no longer offered with the New Passat, which makes the cars cheaper to produce. Volkswagen advertises in all of the medias. It is famous for its nontraditional advertisement. You can see an example on the picture where all of the cars are dreaming they were VW GTI. 

Internal Environment- Service as primary Activity

Volkswagen Services are one of the biggest advantages the company has. You have all seen the dealerships branded in the same way all around the world. The current news is that the brand is changing and the future dealerships will like the one from the second picture. Anyway, not the style of the building makes it so spacial. Volkswagen dealerships have both showrooms and services offered as franchise opportunities.

The company is more willing to let a franchiser have only a service without showroom for new cars, but it will never let anyone sell a car without proving that they can service it. The first advantage is that everywhere in the world there is a service about every 100 miles. The company is trying to make its services accessible and always there when ones need them and at the same time protect the owners by not signing contracts with too many franchisers.

Volkswagen cars are reliable and last long. The brand offers original parts for cars much older than you can imagine. While the other brands mainly focus on the customers driving new and almost new cars, Volkswagen takes care of all of it customers no matter how old car they drive. A prove is that the Warranty does not depend on the millage in most of the countries and that some of the benefits remain even when your car is not in warranty any more- a good example is the road assistance they offer.

In order to provide the best quality for its customers, Volkswagen strictly examines each service at once a year, visits it once every several months, provides know-how, training and assistance and of course sets high level for their franchisers.

Volkswagen | BlueMotion Technologies

Analyzing the External Environment

Volkswagen operates worldwide on various markets and as we can agree, the automobile markets are different and because of that the strategies Volkswagen has should be different. For instance not all of the models are offered everywhere. However, Volkswagen does not change its products as much as the other brands do, instead they just enrich their model range and offer different models in different areas. 

For instance the Volkswagen Polo (on the picture) is the volume maker in Europe but is not even offered in the USA.

In the recent past the automobile market went through a significant change as a result of the Global Economic Crisis backed up with the Environmental problems the world is facing. So, people started to be more and more interested in more ecological and more economical cars. Hybrids, electric cars,  alternative fuel cars, they all flooded the market. Volkswagen had to change, too. But the company is known to be the market leader in innovation, which means that they started changing and the whole marked followed. 

However, what they did is not making cheaper cars with cheaper products, instead they introduced cars with completely new technology. Instead of introducing hybrids, which the media loves so much, they worked on technology called Bluemotion, thanks to which the normal petrol engine is more ecological and efficient and cheaper than the hybrid ones. You can see BlueMotion Simply explained here: http://www.youtube.com/watch?v=OUnCaJKGEn0.

And the company is...

Ok, it is about time to share who I am going to talk about in my blog. The company I chose is Volkswagen. I chose the company first, because I am a fan of the brand, second, because I believe that the management takes interesting and unique decisions for the market. The company is growing and is aiming at the world market leadership in the near future. Here is a link to Volkswgaen's international portal: www.volkswagen.com. I will start with its external environment in my next post. Keep reading, if you want to know more.

Preface

My name is Tsvetelina Pantaleeva. As part of my International Strategic Management class in Augustana College I will develop the following blog. If you follow my blog, you will find information about the strategies and some insight information for a famous international corporation. You will learn how it analyzes the current situation, how it makes decisions and formulates strategies and of course how it makes them reality. If you want to learn which is the company I will focus on, go on reading my posts.