Strategic Management of Volkswagen Group

This article provides an overview of Volkswagen Group's history, vision, mission, and value chain. It also includes information on the company's key performance indicators and managerial highlights. The value chain covers primary and secondary activities such as internal logistics, operations, procurement, human resource management, and technology department.

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STRATEGIC MANAGEMENT

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Part a
Name and year of establishment
The name of the selected company is Volkswagen Group which is an automotive company.
Headquarter of Volkswagen is based at Wolfsburg, Germany. The company was established
in the year 1937 (Volkswagen, 2018).
Vision of company
The vision of the company is VW group is to continuously improve its processes and
promote a mind-set of operational excellence among the collaborators of the company and
other commercial partners through the fulfilment of requirements of VW’s Group and
national and international market in terms quality of products and services and also to prevent
the environmental pollution. It also has the vision to protect the health and promote the job
security of its employees.
Mission of company
The mission of the company is to promote enthusiasm among its clients across the world for
innovative, reliable as well as eco-friendly cars and to provide outstanding services to the
customers so as to achieve remarkable performance of its business (Pratap, 2018) .
Managerial Highlights
In the recent times, the CEO of Volkswagen has declared the Strategy 2018 with the ultimate
motive of outperforming the world’s leading car manufacturer Toyota by the end of 2018. It
has planned to increase its sales level which is currently at 6.2 million to over 10 million cars
within the upcoming 10 years. To achieve the set target, VW Group has a strategy to launch

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new models such as vans, pick-ups and the SUVs. Further, the company has managerial plans
of expanding its business operations in US and Mexico (Term paper, 2008).
Company’s product and services:
The Volkswagen group deals manufacturing and designing of commercial and passenger
vehicles such as cars, vans, trucks, motorcycles, engines, turbo-machinery, etc. The company
owns various brands such as Audi, Lamborghini, Porsche, SEAT, Skoda and Bugatti. The
company is also dealing in provision of various financial services such as leasing, insurance,
fleet management as well as dealer or customer financing (Volkswagen, 2017).
Key performance information:
The sales revenue in 2017 of the company has increased since 2016 by 6.2% and also the
delivery for passage cars and commercial vehicles of the company has increase by 4.3% in
2017 as compared to 2016. Moreover, the company’s EPS has also increased to euro 22.63 in
2017 while it was only euro 10.24 in 2016. The overall net profitability of the company of
company has also increased in 2017 (Volkswagen Group, 2017).
Part b
Volkswagen’s Value Chain covers following activities:
Primary activities:
 Internal logistics: The suppliers of Volkswagen Group deliver all the automobile parts
inside its manufacturing plant. All the raw materials of the company are stored in the
‘’Naves’’ which are the large hugs. All the deliveries of inputs of the company are
undertaken on the basis of Just in Time approach of inventory management and hence
they penalise the suppliers if the deliveries of parts are not made on time.

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 Operatins: Even the production lines of the company function under the Just in Time
policy. The company owns internal transports that are used to carry all the required
automotive parts to the production lines.
 External Logistics: Once the vehicles are manufactured completely, they are sent to
the company’s quality department for their functional testing. When the vehicles of
the company clear the tests they are directly sent to their dealers for the further sale in
the market.
 Sales & Marketing: The Volkswagen group has their own marketing department to
undertake the publicity of the products designed and manufactured by the company.
various marketing activities are undertaken by this department such as conducting
campaigns, arranging events for the product promotions like marathons, creation of
advertisement on television and online platform etc.
 Service: Volkswagen has its customer relationship management department which is
responsible to track all the customers and clients of the company and to ensure that all
the clients and customers of the company are satisfied with its products and services.
Secondary activities:
 Procurement: The employees who functions in this unit are responsible to analyse all
the available offers from different contractors and to select the best supplier.
 Human Resource Management: This department undertakes the recruitment process
for the company so as to hire right personnel for the right department of the company.
 Technology department: This department is entrusted with the responsibility of
undertaking researches to develop the advanced technologies in the automobile field
so as to bring uniqueness and innovation in its products.
 Firm Infrastructure: These activities are undertaken in the areas of waste management,
prevention of air pollution, reduction in emission of carbon dioxide gases, building

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sewage treatment plants and water management infrastructures (Kaplinsky & Morris,
2000).

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References:
Kaplinsky, R. and Morris, M., 2000. A handbook for value chain research (Vol. 113).
University of Sussex, Institute of Development Studies.
Pratap, A. (2018). Strategic Analysis of Volkswagen AG. Retrieved from
https://www.cheshnotes.com/strategic-analysis-of-volkswagen-ag/
Term paper. (2008). The Value Chain of the Volkswagen Group. Retrieved from:
https://www.grin.com/document/138216
Volkswagen Group. (2017). Audit Report.
https://www.volkswagenag.com/presence/investorrelation/publications/annual-
reports/2018/volkswagen/en/Y_2017_e.pdf
Volkswagen. (2017). About us. Retrieved from:
https://www.volkswagenag.com/en/group.html
Volkswagen. (2018). Volkswagen history. Retrieved from
https://www.volkswagen.co.in/en/about/volkswagen-history.html