Corporate Venturing: Analysis of VW's Technological and Economic Environment

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Corporate Venturing
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Executive Summary
The strategic process is not limited to the conception of a certain line of action.
Therefore, strategy is the deliberate search for an action plan that an organization performs to
create and maintain competitive advantages. Competitive advantage is understood as a
differential characteristic that a company has with respect to other competing companies that
gives it the capacity to achieve higher yields in a sustainable manner over time. VW just like
many other auto makers in the world much depend on the external macro-economic environment
just like the micro economic environment. For there to be a good business strategy, VW must
ensure that it adopts to the external environment in order for it to be in business just like its
competitors. The reason for taking VW as the study corporation is because in recent times it has
had several issues in technology and economic environments that has led to the so called “VW
Scandal” which led to resignation of senior executives.
It proposes long, medium and short objectives and the necessary means to achieve them,
for all the functional areas of the company. It is always conditioned by the dynamic company-
environment. (The environment conditions, and sometimes determines, the development of
companies and, therefore, the development of their strategies). In short, it aims to always
improve the competitive position. To establish a strategy, it is essential to have clear objectives,
that is, to know what goals the company intends to achieve, a deep knowledge of the competitive
environment (threats and opportunities), an assessment of internal resources (strengths and
weaknesses) and effective implementation. It is not enough to formulate good strategies.

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Contents
History/ Background.....................................................................................................................3
Technological environment...........................................................................................................3
Economic environment..................................................................................................................4
Labor Environment.......................................................................................................................7
Resource Environment..................................................................................................................8
Legal and regulatory environment...............................................................................................9
Global Environment......................................................................................................................9
Interpretation and Analysis..........................................................................................................9
Opportunities...............................................................................................................................10
Threats..........................................................................................................................................11
Conclusion....................................................................................................................................12
References.....................................................................................................................................13

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History/ Background
Volkswagen was founded in 1937 in Berlin Germany by the German Labour Front, due to
increased demand by the average German to own a car. The early 1930s, the automobile industry
was dominated by luxury models which the average person could not afford. It was
headquartered in Wolfsburg in Eastern Germany. Herbert Diess is the chairman of the board of
management and in 2016 financial year led to manufacture of 6.073 million units of VW cars a
significant increase from past years. However, due to challenging economic conditions and
increased competition from major automobile manufactures like Toyota, Mercedes, Nissan and
others the revenue shrinked to 105.651 Billion Euros for FY 2016. Net income consequently
dipped to 1.869 Billion Euros in the same financial year. Although not a most memorable event,
Adolf Hitler ordered that VW manufacture more vehicle to carry to adults and three children at
100km/hr as he wanted more access of cars by ordinary citizens (Polachek and Tatsiramos, n.d.).
VW manufactured this vehicles and more people bought cars for their families.
Although the automobile industry has been competitive in the past 50 years, strategies to
be the business leader globally has led to VW repositioning itself both externally and internally
for the goal. The reason for taking VW as the study corporation is because in recent times it has
had several issues in technology and economic environments that has led to the so called “VW
Scandal” which led to resignation of senior executives.