International Business Analysis of Volkswagen in China

Running head: INTERNATIONAL BUSINESS ANALYSIS OF VOLKSWAGEN IN CHINA
International Business Analysis of Volkswagen in China
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1INTERNATIONAL BUSINESS ANALYSIS OF VOLKSWAGEN IN CHINA
Executive Summary
There have been several changes in the global economy in terms of globalization and
international business as well as in terms of technological advancements that have impacted the
automobile industry in which Volkswagen is operating its business. The objective of the essay is
to analyse the business operations of a multinational company selected such as Volkswagen in
the international markets, specifically in China. From analysing the cultures followed within the
business environments of Germany and China it is gathered that both the nations have different
business culture environment. However, Volkswagen can attain advantages in host country in
comparison to its home country because of high chances of acceptability for its new and
innovative automobiles launch in China. For ensuring effective business operations in China
through maintaining better stakeholder relationships in the nation, Volkswagen is recommended
to develop measures in enhancing information sharing in the company through open disclosures
and closer co-operations.

2INTERNATIONAL BUSINESS ANALYSIS OF VOLKSWAGEN IN CHINA
Introduction
In the current era of rising competition, it has become important for the companies to
enter into international business for attaining competitive edge, where the companies enter into
cross-border transactions of services and goods between more than two nations (Barth et al.
2017). The objective of the essay is to analyse the business operations of a multinational
company selected such as Volkswagen in the international markets, specifically in China. In
carrying out the same, the recent changes in the global economy in terms of globalization and
technological changes will be evaluated. Based on such analysis, the host country analysis along
with the suitable market entry strategies employed by Volkswagen will be evaluated for
recognising the advantages and pitfalls based on which certain alterative actions will be
undertaken with Volkswagen’s international business operations.
Discussion
Part 1: Background of Volkswagenand Industry Analysis
Brief Company Profile
Volkswagen was founded in the year 1937 involved in business operations of
manufacturing cars and is based in Germany with having headquartered in Wolfsburg. The
company has positioned itself as one of the renowned and sustainable multinational companies
all over the world (Blackwelder et al. 2016). The major products and services of the company
includes designing, manufacturing and distributing commercial as well as passenger vehicles,
engines, motorcycles as well as turbo machinery. The business operations of the company also
encompass leasing, financing along with fleet management. Volkswagen segmented its car

3INTERNATIONAL BUSINESS ANALYSIS OF VOLKSWAGEN IN CHINA
business into two major groups such as Volkswagen and Audi in the year 2002. The first brandof
the organization akoda, Bentley and Bugatti and the second brand group Audi
includesLamborghini and SEAT. The company gradually expanded its car manufacturing
anddistribution business in several regions of the world such as in seven European nations and
also operates in more than 153 nations (Burmann, Riley, Halaszovich and Schade 2017). The
reductionsites of the car manufacturing company are located majorly in Europe, America, Africa
and Asia. The company continues to expand its business operations internationally as its business
is focussed on decreasing production costs and enhance profitability. To ensure thatVolkswagen
can attain such goals, it has developed numerous business growth and market entry strategies
such as launching new models and divesture of non-core business segments. Through developing
such internationalmarket growth strategies over years, the company has observed well-built
profit over the five years (Financial News 2019).
Recent Changes in Global Economy
There have been several changes in the global economy in terms of globalization and
international business as well as in terms of technologicaladvancements that have impacted the
automobile industry in which Volkswagen is operating its business. Globalization and increase
the rate of international business operations have facilitated the multinational automobile
companies to attain certain advantages such as better economies of scale, benefits if government
policies and opportunities of operating businesses in favourable markets with increasing business
opportunities (Fu, Ogasavara and Sousa-Filho 2018). Globalization has transformed the
automobile industry through integrating people;economies and government’s ad particulate since
trade within manufactured goods have outplaced certain traditional sectors like agriculture and
mining. Exports of the automotiveproductsdrastically increased from $319 billion in 1990 to