Creating Value in Global Markets

Volkswagen works on all markets around the world. However, the products and brands it offers are not the same everywhere. For instance Skoda and Seat are not offered in the USA. Reaons for the product difference is customers' expectations, geographic and political differences. Small cars like Up! and Polo are not offered in the USA because customers expect and want bigger size cars like the Jetta, which is a best seller. The equipment offered in the EU is different from the one offered in the USA because of the ecological norms all of the cars in the EU should fulfill. 

Volkswagen uses different strategies to make the products cycles longer. The Clasico offered in Mexico is model which is no longer offered in Europe. However, it is only simillar but not exactly the same. Along with it, the new models are also offered. Another strategy used is a transfer to another brands. The product are not the same but they use the same technology, production line, logistics and strategies. After a car is no longer offered in Volkswagen, it is offered as a new Seat model. I want to point out that the car is not exactly the same, but enought ideas and elements are used in order to make the production cheaper. 

Creating value through diversification- Volkswagen group

Volkswagen is part of Volkswagen Group. There are nine automobile brands in the group: Volkswagen, Volkswagen Commercial Vehicles, Audie, Seat, Skoda, Bentley, Bugatti, Lamborgini and Skania. All of the companies are automobile manufacturers but they have different strategies. Some like Volkswagen use differentiation and others like Bentley and Bugatti use focus strategy and even some like Skoda might be considered as a cost leader companies. In this way Volkswagen diversifies its products horizontally and is able to offer products for different markets and different customers, which increases the income, the company's strength and increases risk. 

However, Volkswagen does not stop with its diversification here. The company is also famous for its vertical diversification. Volkswagen recently bought 90,1% of Italdesign so that the company can add one of the best design studios and enrich its already good design department.

You might be surprised but there is Volkswagen Bank. A company like Volkswagen saw that it would benefit a lot from having a financial institution within the company, which would fund customers of the company to buy new cars from the brand. I would also fund Volkswagen franchisees. 

Even more impressive to some of you there is Skoda University. The university is a proper university, not just a training center and students receive degrees there and have the chance to receive experience in the company during their education. 

Another diversification is Volkswagen Motorsport. The company develops racing cars, organizes racing events, trains drivers, it is one of the main innovation development places for Volkswagen and one of the best promotions for them as well. 

Autostadt

I have already talked about Autostadt in my previous blogs. I want to include it in this one, too because it as an interesting example for diversification. Who could think that an automobile company could benefit from a facility, which resembles Disneyland. It is a center with a museums, shopping malls, hotels, concert halls, impressive parkings as you can see on the picture on the left, test drive facilities and even a factory. The idea is that people's love to the brand would bring them to that place so that would have the great the chance to get a closer look into all of the Volkswagen Group brands, enjoy performances sponsored and organized by the company and even receive their new car they have previously ordered. The facility is a great motivational center, too. After any of the employees or customers have been there at least one, they get attached and considerably involved in the VW world.

Volkswagen Group has a strategic partnership with Porche. Both companies own significant stock share of each other and they both benefit from that. Porsche has the rights to represent Volkswagen in some countries and be the coordinator for its franchise. 

And again Porsche has its awn bank for its services.

Creating and sustaining competitive advantage

Volkswagen uses Differentiation in order to be the market leader. The company's products are unique- most of the technologies are invented and used only by VW. Non-price attributes are used for which customers are willing to pay premium. The products and cervices are not cheap and are known to be used by people who want good and reliable product they can successfully use for their job or personal life. If you have work to do, go and buy Volkswagen. Now.

When it comes to product life cycle, Volkswagen is the best. The company releases new models every 4-5 years. They don't change the model brand but they introduce innovations in technology and design. The strategy is good because people change their cars in almost the same period, which means that the company provides them the new model to buy when they decide to change. At the same time it is a good financial strategy, as it is unacceptable to sell a new car and already used cheaper car with big price difference.  On the other hand introducing improvements works for differentiation, too, as that shows that the company cares about their customers and works hard to be the most innovative company.

Favourite commercials

I just want to share with you my favourite Volkswagen commercials which always inspire me and remind me why I love the brand. Here they are. Which one is your favourite?

Tangible resources

Volkswagen is the leading innovator in the industry, which means that knowledge is a big part of their resources. There are so many brands that are Volkswagen property as DSG, TDI, GTI, TSI- innovative technologies and the model lines like- Jetta, Passat, Tiguan, Phaeton, Touareg. Innovation is a key activity in the company because that is how they plan to complete their strategies.

Human capital is important for Volkswagen. Their success is based on the qualifications and personal commitment os around 400,000 people. The need of a top team is recognized as its core features are said to be high level of competence, dedication, inventiveness and fitness. Competence is created from good basic training and a life-long willingness to learn. Dedication ideally means entrepreneurial thinking and action, not only by management staff. Volkswagen needs top performance. A strategy called "flow channel" provides best performance and at the same time prevents employees to be overstretched or under stretched. Another principle the company follows is "Lead, Demand and Promote" which means leading by example. A "mood barometer" was introduced recently- gives employees the opportunity to anonymously voice their opinion and so to become actively involved in the organization of the company.

Personnel development and women advancement are other core values the company has. Volkswagen recruits personnel from the earliest  age- kids can start learning skills and begin part of the company as soon as summer job in high school. The company works with several university research laboratories were students can give ideas and work on real project that will be used by the company. Furthermore, the company has its own university in Europe, where part of the education is practical in their plants or offices. The company is aiming to be the "best employer" in the world and that is why it offers attractive employment, job security, good working climate, personal development opportunities and others. Most importantly, the company management treats everybody as individual personality and provides various social benefits as mobility throughout the company, fitness and health assistance, family improvements and planning, etc.

Volkswagen- the company of the future

Volkswagen looks forward the future and is aware of its responsibility for people, the environment and society. See how VW makes the world a better place here: 


http://www.volkswagenag.com/content/vwcorp/info_center/en/video/11/01/volkswagen_group_video.html