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.