Volkswagen Case Study: Business Development Analysis

This case study report analyzes the Volkswagen emission scandal, exploring its ethical implications, impact on the company's reputation, financial performance, employees, and customers. The report examines the scandal's effects on revenue, share price, and market share, comparing Volkswagen's performance to competitors. It highlights the significance of reputation management, ethical behavior, and corporate social responsibility in business decision-making. The analysis includes a thesis statement, supporting research, and a discussion of the company's strategies for recovery and regaining stakeholder trust. The report concludes with recommendations for effective governance, ethical conduct, environmental analysis, technological advancements, and corporate social responsibility to improve Volkswagen's future performance and growth.

Case study

Table of Contents
INTRODUCTION...........................................................................................................................3
ANALYSIS .....................................................................................................................................4
CONCLUSION................................................................................................................................7
RECOMMENDATION ..................................................................................................................7
REFERENCES................................................................................................................................9

EXECUTIVE SUMMARY
Volkswagen case study report has included introduction outline the meaning of ethics ,
brief summary and compare with other company. This report also included the thesis statement
of Volkswagen company with own research that used to support the reputation of the company.
the report will define the conclusion and recommendation of the report.
INTRODUCTION
Ethics- Company adopt system of moral principle for formulate policies according to culture of
community, religion etc. Ethical organisation helps to fulfil basic needs of employees and public.
It is significant for take decision making that helps to profitability and conduct business with
protecting the society. Ethics and corporate social responsibility play significant role to take
decisions that influence by culture and environment which use to fair dealing with everyone that
helps to create harmony relationship and increase productivity level (Bowen and et.al., 2018).
Summary -
Volkswagen company made 60000 cars made for US market which was defeat device
because they are not able to pass emission test. It decreases the reputation in the market and
engineer faced difficulties for build diesel engine with low emission gas that was capable for
high performance. the statement clear that manager support use morale system that protect to
workers and public.
Compare with other organisation - Volkswagen company provide defective car to US country
but they are not able to pass emission gas but other company like Aston Martin provide quality
car at the reasonable price by passing carbon emission gas test. Ethical activities lead to differ

revenues and growth of the company. recently Volkswagen company performance and market
share also better than other organisation like Aston Martin .
Significance role of reputation within organisation-
 Reputation plays significant role to create image in the market that leads to increase
market share that helps to Increase market share creates value of shareholders, investors
and customers.
 Good reputation essential for increase profitability and sustainable growth of the
company by providing quality product. Ultimately Effective and strong reputation helps
to improve financial position of the company that provide positive impact on
shareholders.
 Strong reputation can enhancing business opportunities that helps to take competitive
advantages.
 Good reputation helps to reducing marketing cost like advertisement and promotion
which helps to increase profitability and growth of the company.
 Strong reputation helps to take competitive advantage that helps to achieve goals and
objective of the company.
Aim of the report- Company must adopt morale support system which give positively impact on
culture , community or society and environment. Volkswagen company conduct activities for
welfare of society , community and employees and analysis those factor that impact on business
activities that helps to build reputation in the market which leads to increasing profitability ,
growth and build image in the market
ANALYSIS
The thesis statement of the report is that Emission scandal circumstance of Volkswagen
company contribute the future success or growth of the company.
Volkswagen company consider four aspects in research
Volkswagen company fail to pass carbon emission test that create the critical situation for
the company so they face lot of challenges like competitive challenges , customer retention
challenges. This situation leads to decreased the reputation as well share price of the company .
This emission scandal circumstance create dilemma situation which largely impact on share price
, customers , shareholder, revenue, board and manager of the company . Company prepare

effective strategies and plan that helps to build image in the market and company can achieve
goals and objective within the specified time (Cavico and Mujtaba, 2016).
Revenue - when company fails in emission scandal test and provided 60000 defective car to US
market that time company suffer huge loss because of reducing the reputation in the US market
(Mansouri, 2016). After that circumstance company suffer loss in first quarter in 2015 that was
the worst situation for the company because company suffer huge losses day by day .
Volkswagen company sales have been recovered over the 2015 after diesel emission deception
then revenue raised within one month. Manger of the company prepare effective strategies for
improving performance and image in the market and also analysis those factors which impact on
business activities such as tax policies , government rules and regulation etc which helps to
achieve target like increase sales and profitability of the company. In 2017 the company sales
was increased by 6.2 % per year and generate 230.7 billion pound . Now company want to
become the largest company in 2020 so they provide luxury car like Audi and sales growth was
6% . Company adopt innovative and advance technology for manufacturing the car according to
customers preferences that helps to maximisation the profit and reputation in the marketplace.
Recently sales growth of the Volkswagen company 230.7 billion pound that would impact on
operating profit increased by 17 million pound that helps to improve financial position of the
company( Analysis of the Volkswagen Scandal , 2016).
Employees- When company not passed carbon emission test which largely negative impacted
on organisation's reputation so employees left . Employees didn't want to work within the
company because of losses of reputation and money. Employees had health risk due to leak
emission gas. Carbon emission gas are dangerous for health so employees didn't want to work
within the organisation that time company suffer loss of resources like money , employees . They
found evidence from the news, social media (Zhang and et. al.,2016).. Company doesn't
compete with competitors because they was not able to manufacturing the new designs' car
because of losses of employees , customers and capital. On that situation company face lot of
challenges like employees left their company that create bad reputation but Manager of the
company make planning, organise and controlling the activities that helps to improve
performance and they also prepare strategies for boost morale and motivation to them so they
can provide better services to company . Manager offers high bonus , salary and incentives to
boost morale and motivate them that helps to retain employees within the company. Volkswagen

company adopt advance technology that helps to increase productivity level and company must
adopt corporate social responsibility to improve efficiency of the employees. Company Recently
total 284734 employees engaged with company (Analysis of the Volkswagen Scandal , 2016).
Customers - Volkswagen company is popular but after the cheat on emission scandal crises
company face large loss of customers because no one want to buy car because of failing
emission scandal test. It was the highest loss incur from the last 15 years that was created
negative impact on their customer, employees and shareholders of the company that leads to
decrease market price of the company due to reducing reputation in the market (Vriens and et.al.,
2017). The company scandal situation was decrease loyal customer and continue company face
many challenges like they can't take competitive advantage and customer loyalty was decreased
day by day. After this critical situation manager of the company manage all activities and
identify the customers needs and preferences. Company prepare effective strategies for
improving the performance so they can reduce cost on the production . They also adopt advance
technology to production the product ads per customers needs and preferences which use to meet
out the customer demand on the time of demand that helps to maximisation of profitability ,
sustainable growth and increase market share of the company . It also build reputation in the
market that helps to increase loyal customers of the company . recently company have large
customer base because of their quality of cars.
Share price - On the time of diesel emission crises share price of the company dropped within
first quarter. It was dropped from 80.6% to 58.3 % because the emission scandal that create
negative impact on shareholders like employees , customers , investors and owners. shareholder
of the company sell their shares in the market company face huge losses and didn't take
competitive advantage. Shareholder of the company reduce day by day because crises impact on
reputation of the company (Mansouri, 2016) . After the crises manager of the company prepare
effective strategy for providing quality car to their customer which helps to increase profitability
of the company. Company provide quality product that helps to build image in the market that
leads to increase the share price of the company. Ultimately increasing share price increase
shareholder value . Company adopt advance technology which use to increase productivity level
and then they provide quality product and luxury product according to customer need that would
increase customer loyalty and build image in the market. Now company regaining the
stakeholder by providing quality car at the lower level that lead to increase loyal customer base.

Company successfully manage reputation by giving immediate respond to shareholders ,
customer and employees and also continue and transparent communication into the market that
ensure that company take decision to improve activities and taking leadership responsibility.
recently 148.70 pound share price of the Volkswagen company.
CONCLUSION
Above report summarised that company conduct ethical activities that positively impact
on environment , workers and community that is essential for growth and build image of the
company . Volkswagen company suffered lots of challenges due to not passing carbon emission
test which impact on overall performance of the business . On the time of emission scandal crises
share prices , revenue was dropped out and all workers left company due to risk but company
immediate respond and prepare effective strategy to overcomer the situation. Recently
Volkswagen company is the largest company which provide quality cars according to customers
preference by analysis the all external factors like culture , environment , policies and tax
reforms etc. Volkswagen company cover almost market in worldwide which build image in the
markets that helps to increase profitability and growth of the company. It also concluded that
Volkswagen company must adopt recommendation to improve their situation like analysis the
external and internal factors that impact on business activities and also prepare strategies to
improve performance of the company.
RECOMMENDATION
 Effective governance model- Company should focus on model of the governance like
government rules and regulations regarding tax policies , laws and legislation etc which
can be use to formulate corporate policies and conduct business according to model that
helps to eliminate future losses due to change in any rules and regulation.
 Ethical behaviour- Volkswagen company should have conduct fairness , honestly and
equity activities for improving efficiency of the business and employees that helps to
increase productivity and reduce the manufacturing cost. Volkswagen company can
increase profitability and sustainable growth (Welch, 2019).
 Analysing the environment -Volkswagen company should testing about the internal
environment and external environment That impact on overall of the business so
company can take action for reducing the future loses . Company able to provide quality

car according to customer preference that leads to increase profitability and loyal
customer retention.
 Advance technology - Company should adopt advance technology for manufacturing
the luxury car. Company able to provide quality car at the reasonable price that helps to
increase customers and build image in the market. they should also conduct research and
development which helps to provide quality product on the time of demand that helps to
increase profitability.
 corporate social responsibility - Company should adopt corporate social responsibility
that provide positive impact on social and environment. company can addressing the
culture and social issue . company must conduct those activities which positively impact
on environment , society and community that helps to build image in the market that
helps to increase profitability and growth of the company (Zhang, B. and et. al.,2016).
 Prepare effective strategies- Manager of the company should formulate effective
strategies for improve performance of the business. Company work upon the
improvement of the quality that is the favour of environment and provide quality product
to customer that helps to build image in the market . Effective strategies leads to market
share of the company and increase shareholders value .
 They should have to contact their PDT and arrangeVW’s Crisis Strategy .2019 the
meeting with AST for prepare solve their problems.

REFERENCES
Books and journals
Bowen, M. and et.al., 2018. Effect of Perceived Crisis Response on Consumers' Behavioral
Intentions During a Company Scandal–An Intercultural Perspective. Journal of
International Management.24(3). pp.222-237.
Cavico, F.J. and Mujtaba, B.G., 2016. Volkswagen emissions scandal: a global case study of
legal, ethical, and practical consequences and recommendations for sustainable
management. Global Journal of Research in Business & Management. 4(2). pp.303-311.
Crête, R., 2016. The Volkswagen scandal from the viewpoint of corporate governance. European
Journal of Risk Regulation.7(1).pp.25-31.
Mansouri, N., 2016. A case study of Volkswagen unethical practice in diesel emission
test. International Journal of Science and Engineering Applications. 5(4).pp.211-216.
Vriens, M. and et.al., 2017. Assessing the impact of a brand crisis using big data: The case of the
VW Diesel emission Crisis. DMA Annual Analytics Journal. pp.107-118.
Welch, J., 2019. The Volkswagen recovery: leaving scandal in the dust. Journal of Business
Strategy.
Zhang, B. and et al., 2016. The issue arena of a corporate social responsibility crisis–The
Volkswagen case in Twitter. Studies in Media and Communication.4(2).pp.32-43.
Zhang, B., Veijalainen, J. and Kotkov, D., 2016. Volkswagen Emission Crisis: Managing
Stakeholder Relations on the Web. In WEBIST 2016: Proceedings of the 12th International
conference on web information systems and technologies. Volume 1, ISBN 978-989-758-
186-1. SCITEPRESS.
Online
VW’s Crisis Strategy .2019.[online].Available through
.<https://www.nytimes.com/2016/02/28/business/international/vws-crisis-strategy-forward-
reverse-u-turn.html>
Analysis of the Volkswagen Scandal . 2016. [online].available
through.<https://gps.ucsd.edu/_files/faculty/gourevitch/gourevitch_cs_zhou.pdf>