Global Business Report: Volkswagen's Internationalization Strategy

This report delves into the intricacies of global business, specifically focusing on the internationalization strategies of Multinational Corporations (MNCs). It begins with an overview of the European Economic Community, exploring its formation, objectives, and subsequent evolution into the European Union, highlighting both its advantages and disadvantages. The report then critically examines the motivations behind MNCs' decisions to expand internationally, including access to lower production costs, targeting international markets, accessing larger talent pools, avoiding tariffs, and fostering development and innovation. Furthermore, it identifies and analyzes the typical challenges MNCs encounter during internationalization, such as language barriers, cultural differences, difficulties in managing global teams, currency exchange and inflation risks, political risks, labor exploitation issues, and environmental concerns. The report also includes a case study of Volkswagen's internationalization strategy, particularly its expansion into the Indian market, analyzing its domestic market position, internationalization strategies, and the environmental analysis of India, modes of entry, challenges, and potential solutions, alongside the leadership qualities required for successful market entry. The report concludes with a reflective essay summarizing the key findings and insights.

GLOBAL BUSINESS
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Table of Contents
INTRODUCTION...........................................................................................................................3
Individual notes 1 :...........................................................................................................................3
Individual notes 2 :...........................................................................................................................4
Critically discuss the reason why MNCs internationalize and the typical challenges they
encounter......................................................................................................................................4
3. INDIVIDUAL REPORT.............................................................................................................7
1. Introduction..............................................................................................................................7
2. Analysis of Domestic Market..................................................................................................7
3. Strategy to internationalize......................................................................................................8
4. Indian environmental analysis.................................................................................................8
5. Mode of entry and challenges which may find in the country and possible solutions............9
6. Leadership qualities that support market entry......................................................................10
7. Conclusion.............................................................................................................................10
Reflective Essay.............................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Global business refer top the process of increase business globally. This is the process of
developing the increase in performance and also creating a wide coverage of knowledge in the
workplace. The report will explain the reason of the MNC chosen by the organizations and the
typical challenges they face.
Individual notes 1 :
The European economic community was an association formed by 6 European countries
members during 1957, including three community that were replaced by European Union in
1993. This community is having policies and governing, traditional fashion in all members state.
The main objective of this community was to foster a common trade policy and reduce the trade
barrier in countries and improving the economic condition with entire European region. The
European government also want to reduce the future war and move towards integration and
corporation with other countries to prevent suffer from wars (Johnson and et.al., 2020). The main
sic countries include France, Belgium, Germany, Italy, Netherlands and Luxembourg. Further
this was replaced with European union during Maastricht Treaty effects.
The European community was introduced during the World War II with aim in unified
European found hard to war with each other in near future. This community were introduced in
order to make fair trade policy in within countries. Peacefully political and attribute differences
are being developed to make profitable trade within countries. There are certain pros and corns
which are being identified during the European Economic Community.
The major Pros of EEC are:
 The European countries allied front against outside aggression which create stability in
European country belongs to agreements called NATO to work together with mutual
understanding. This increase the fair trade practise in countries and make high import and
export of goods and service without any barrier (Kinross and et.al., 2020)
 It also creates Job opportunities and high wages are being provided to worker which is
provided under the European agreements. This cause high employments rate in country,
better wages to workers, skilled labours which help local producers to make the high
quality products and to earn good amount of profits.
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 The agreements create eco-friendly policies environment more effectively where same
polices are being used by members countries. This also brings the development of
industrialization in countries.
The major Corns of EEC are:
 Due to allied between the countries, it increases the operating cost of business, This is
due to presence of domestic and international governments are involved which need high
funding to make secure to all countries (Brackeand et.al., 2020)
 There are many problems which are faced by European economic community in spite of
European Union as they all have there different culture of working which leads to arise
problems between countries.
 The agreements also suffer lack of transparency at some point of time due to certain
problems and situation arises.
Individual notes 2 :
Critically discuss the reason why MNCs internationalize and the typical challenges they
encounter
MNCs : — MNCs refer to the multinational corporation company which operate in the home
country as well as works in other different companies around globe. The central office is located
in one of the country and then the organization operates it business and also coordinate with its
offices and management.
There are severable reasoned for which the company operates in the international market
and also develop there business to create more of the knowledge and profitability through
productivity in the new market. They get huge market to work and can operate in different places
where the product can increase the sell and provide the organization in getting benefit margin.
Working in the international market provide different cause and cons to the organization which
they study and work accordingly. The organization always work in those country which they
think that provide them good results and also increase in development of new goals. MNC
provide huge advantages to the business including the ways they provide the market and also
allow the access of such new customer in the market. The reason the organization want to work
in the MNCs are: -
Access to lower the production cost : -
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Working in the MNCs are every organization dream to increase there market and this
help them in increasing the productivity. When the organization goes multinational they produce
a huge amount of product and services which include the working of business on large scale.
This help the organization in achieving the productivity at one place and also reduce there cost of
production. There are several factors for the reduction of cost of production as the company is
making the product in huge amount of number and it develops in increased performance.
Target international market : -
This also help them in increasing the target market as working in the international market
develop the market size and also increaser in the process of wider audience to them. It is
essential for the business to make sure they are developing more and more and MNCs allow the
business to develop market in wider level. Targeting the international market include the process
of developing the workplace and also finding the new customer and market to impact by
company product and services they offer.
Access to larger talent pool : -
This is one of the crucial factor that the business which work in the MNCs are very
determine to there working, and they also develop strategies to hire the best talent in the
workplace and also increases the talent of the organization. It helps in increase of the working
performance to achieving the business goals.
Avoidance of tariffs : -
When the organization works in the process of multinational business then they get the
benefit for the tariff relief as they are not supposed to pay a lot of tariffs, and they are exempted
form import and export quotas. This help the organization in creating a wider market as they are
exempted form the duties which increase in saving of the profit and also create more in the
business.
Development and innovation : -
Development and innovation in the technologies and also increase in the working of the
business as they are developing a huge market and also they are changing the process of working
where innovation through different market can adapt to the business which can help in increase
of the business and also develop profits for business.
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Challenges of MNCs internationalizations : -
Language Barriers : - language barrier is one of the major impact which company encounter in
the business when they are planning to the international market. It is crucial for the business to
develop the market but this also require the understanding and the communication to work in
internation market. There are a lot of companies which change there mind to work in the global
market or in some countrywide where they face the language barriers (Varvne,Cederholm and
Medbo, 2020).
Cultural Difference : — Culture different are referred to the process of working in different
culture and the culture of the places which the organization need to follow when they are
working in the international market. They required to develop the business in such a way that
they do not harm any culture or religious. Culture different can cause the organization on huge
basis as the people of the company gets negative and demotivated in the workplace.
Managing the global team : — Working in the international market is also development of the
international team which the manager need to manage and the management need to develop so
that they can improve the working in the business and also create a workplace bonding. This is
important as they need to develop a process of increase performance and the actual incident of
the process of development (Ramesh, 2018).
Currency exchanges and the inflation rates : — Currency exchange refer to the process of
developing the exchange of the currency as when the company is working in the USA, and they
want to expand in India then they need to develop or exchange the currency in the process to
implement the money on the business.
Political Risk : — Political risk refer to the process of developing the exchange of country and
increasing the process in development of the workplace. They need to divide the process of
increased performance and also create a huge impact on the working of business. They are
developing the changes in the process of increased performance and the policies of the country.
Every country have different policies in there working and the company need to focus in the
development of following the entire process of increasing working.
Labour exploitation : — when the company expands the business in new country they start the
working of hiring new labour to increase the process of working and it is essential for the
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business to make the best impact inn the workplace which is required to have the best of the
labour and employee. The organization has a factor of encounter which increase in the process of
following the changes and making the best of the hiring and recruiting process (Hussler and
Burger-Helmchen, 2020).
Environment issues : — Environment issues refer to the issues which can come by the process
of environment factor and it also includes the process of increasing the development working for
which they need to develop procedures and also want to develop the planning to make the best
strategy to choose the country where the environment factor does not impact on the workplace
and operation of the country (Pai, 2018).
3. INDIVIDUAL REPORT
1. Introduction
Volkswagen is a Germane company which is manufacturing cars since 1937 in many
countries. Now they are expanding the business in India market for manufacturing and Cars and
selling in Indian market. The Indian market is very high demand for cars which are of mid range
and qualities having in Volkswagen was perfectly matched with the requirements of consumers.
The various strategies company is making and market research that is being conducted to gain
competitive advantage in Indian Market.
2. Analysis of Domestic Market.
Volkswagen was a German brand, manufacturing cars from mid range to high range in
the market. They are offering high quality cars feature which is the major reason of developing
the cars. The major market jump by Volkswagen is within Germany domestic market only. In
2018 total number of sale is 5,41,200 units which are being increased with 5.3% in next years
and showed up with the result of 5,69,000. After the lock down due to Covid-19, first quarter of
2021 sales was showed up at 130,854 which was the highest selling of cars in domestic market
(Merwitz, 2020). This is due to many reasons as Volkswagen offers quite attractive offers and
features which in mid range cars with a powerful engine that makes them one of the best-selling
cars in German market.
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3. Strategy to internationalize.
Company is doing great in domestic market as well as some other international market
like USA and European market. Now, they are moving in Indian market that have high demand
of cars within Budgeted range and high feature. Volkswagen is planning to implement
production plant in Indian market. These strategies are implemented due to low cost of
production in company and low labour cost in Indian market. The Indian government initiated
foreign companies to invest and start their plant in Indian market. They are providing with
subsidies and various other offers which help company to earn good returns from manufacturing
cars and export in nearby countries (Aichner and et.al., 2020). To increase the market share of
company Indian market is most developing market for auto mobile sector where support from
government and other authorities are provided to company. The most emerging market of auto
mobile sector is Indian and demand for electric vehicle which is being successfully launched in
countries like USA, is now looking for launching electric cars in Indian market.
4. Indian environmental analysis.
To know environmental of Indian market, PESTLE analysis is being created by
Volkswagen.
Political
 The governments had started initiate
foreign companies to establish there
plant in country and can provide
various benefits like subsidies and low
tax. Dynamic structure of political parties in
states can affect the production process
due to different polices and regulation.
Technological
 The electric cars are being developing
in Indian market due to high
technology used by companies in
Indian market.
 The technology used by Volkswagen in
Indian market make it low cost due to
low labour cost and high quality is
being given by manufacturing.
Economic
 Indian economy is developing and
major of the companies are investing in
country due to high returns. The Low cost of production and labour
cost can create good margins.
Legal
 After pandemic, Indian governments
inviting companies to invest in country
and all legal requirements are being
made through easy process (John,
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2020).
 The environmental friendly
manufacturing plants is being required
with the safety and security of
employees and workers.
Social
 The mid range cars are emerging in
country and makes high demand of this
type of cars (Alkaabneh, 2020). There values of consumers are being
fulfilling through introducing new
feature like electric cars.
Ecological
 The electric cars are being developing
by Volkswagen in Indian plant which
help Indian market and nearby
countries to provide with electric cars
which help to minimize the
environmental harm cause through
gasoline cars.
5. Mode of entry and challenges which may find in the country and possible solutions.
The mode of Volkswagen entering into market is by opening its official new plant in
Indian market. There is no franchise or acquisition is bing made by company in order to
introduce its new plant. This mode is preferred by company due to high returns are being
receiving by market and increase the market share as Indian market is one of the emerging
market in country. There are certain challenges which are faced by company in Indian market
which are :
 There are already some competitor which are start there plant in Indian market like
Maruti and Hyundai which are offering same line of products in market. Tata motors
which was the biggest brand in Indian market that have high market share in Indian
market and having reputation and goodwill in market.
 To gain the competitor advantage Volkswagen ned to offer very low price and high
quality feature in market.
 The electric cars which is being introducing in Indian market is already started by Tata
motors. So Volkswagen need to develop a product which can compete Tata motor
products in same market (Kumar, and et.al., 2020).
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The solution for these challenges are Volkswagen need to research market properly and
find the flaws in competitor product to know the requirement that is not fulfilled by company.
However, price of product should be low with power pack features in cars that attract customers
towards company.
6. Leadership qualities that support market entry.
The leadership quality that should be having in employees of Volkswagen should be that
they need to have proper communication skills and channels that need to be further informed to
top authorities of company (Pande and Kumar, 2020). This help to understand the follow-ups of
market research and can measure the work is according to strategy or not. Motivation to
employees which are working on market research and other work that is needed for effective
implementing plant in Indian market. Leaders should be more focus and taking regular follow up
to analyse strategies that is being followed and ultimate objective is achieved to enter in Indian
Market.
7. Conclusion.
The above study shows the entrance of Volkswagen in Indian market to increase market
share. Indian market is emerging market for auto mobile industry and government is taking
initiate foreign companies to invest in Indian market and provide various benefits which are
provided to these companies. Volkswagen selected this country due to low cost of production
and low labour cost which leads to high profit margin for company and can get enough returns
from it. However, Indian market is good for investments and strategy to manufacturing of
electric cars in Indian market can result in huge success by following proper startegy.
Reflective Essay
I have made a lot of strategy in the process of development in the business and also create
a variety of changes in my personal behaviour to develop the relation in the business. There are
several factors and new process of development which I got in my self which is developing my
personal and professional opportunity in the workplace. There are several changes which is
crucial for me to develop in the learning. The module help me in understanding the importance
of the MNCs and the learning about the MNCs which can help me in development of changes
which are required when I work in the professional world. I learned a lot of things from the
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module as the module helped me in creating a better understanding of the result about MNCs and
the way the European economic community works. There are crucial changes which I wanted to
develop as a learned so that in future I get a good information about the same and can provide
the representation of the company.
There are several changes which are required and the self assessment exercise which I used to
understand my personal self which is required for me to develop more of the business. This is
crucial for me to take the exercises to understand the strength I have and the weakness which I
need to develop to get a better personal professional development.
STRENGTH
 leadership
 management
 learning
 Team working
 self discipline
 persistence
WEAKNESS
 Unadjusted nature
 anger
 Short temper
 Want everything quick
OPPOURTUNITY
 Management jobs
 Professional growth
 Leader opportunity
 Presentation skills
THREAT
 Lack in professional development
 Lack in opportunity
The self assessment services provided me the information about myself and it is essential
for me to develop more of the knowledge in the workplace and professional details to improve
the working. There are several process in which I required the development in the workplace and
also want to increase the working of the organizational development. I realized that it is
important for me to develop the skills and knowledge in my self growth to get a better in the
professional and personal growth. This required the information to develop a working in the
routine and utilize the technologies in which I'm lacking needed to be developed. There are
several factors which are crucial for the company to make the changes and the workplace need to
develop in the process of getting the desirable job.
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These things are developing my learning ability and also creating a good process of
development in the process and it is crucial for me to develop them to increase the opportunity in
the growth of the company or professional opportunity. I need to develop a lot of skills which are
my weakness and can be a threat for myself in the process of development. The module help in
understanding the self assessment and also creating a procedure of development into the
workplace motivation. The skills' development can also provide a great impact on the working
and also can make the changes in the growth. There are opportunity which I can utilize as the
strength I have in myself can help me in development of the overall growth in the future and also
creating a wider concept of knowledge in workplace.
CONCLUSION
The report concluded that it is crucial fro the development in the business to get
knowledge about the organization and the reason they choose to work in international market. It
is crucial for them to get the knowledge and understanding about the challenges they are facing if
they go internation.
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