Strategic Analysis of Volkswagen Group: Assessment Report

This report provides a comprehensive strategic analysis of the Volkswagen Group, focusing on its operations in Nigeria. It begins with an executive summary outlining the study's objectives, which include evaluating the company's strategic position, resource allocation, value system, and product portfolio using the BCG matrix. The report then delves into the strategic positioning of Volkswagen, discussing its vision, business strategy, and key performance indicators. It examines the company's resources, including production, labor, and capital, followed by a resource audit that highlights the impact of the Diesel issue and the performance of different brands within the group, such as Audi and Porsche. The value system of the company is explored, focusing on its distribution in Nigeria and its commitment to customer service. A BCG matrix analysis is presented to evaluate the product and portfolio mix, categorizing brands like Skoda, Audi, Porsche, Bentley, and VW Beetle based on market growth and market share. The report concludes with an analysis of the future directions of the group for strategic growth, considering options, vision, values, and global growth strategies. Recommendations are provided based on the analysis, offering insights into how the company can strengthen its strategic position and achieve its long-term goals. The report is supported by multiple references.

0Running Head: STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
Name of the Student
Name of the University
Author Note

1STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
Executive Summary
The main objective of the study is to evaluate and understand the strategic analysis of
Volkswagen Group. The study is supported by analysing the company's strategy in terms of a
company situated in Nigeria. The study focus on, BCG matrix and strategic growth factors of
the company and also to the future directions of the company for establishing a strategic
position. It was found that, the company has long strategic planning in terms of building the
infrastructure and identifying the best operational activities for meeting the customers
demand in terms of automobiles.

2STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Strategic Position of Volkswagen Company Limited............................................................3
Evaluation of Resources.........................................................................................................5
Resource Audit.......................................................................................................................6
Value System of the Company...............................................................................................7
Evaluation of the Product and portfolio Mix.........................................................................7
Analysis of the Future Directions of the Group for Strategic growth..................................10
Recommendations................................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................14

3STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
Introduction
Volkswagen Group is a multinational manufacturing company headquartered in
Germany. The company focus on designing, manufacturing and the distributing activities.
The company is also established in Nigeria and is involved in the servicing activities of the
automobiles in the customer's geographical locations. The study is proceeded with an
understanding of the company's strategic position all across the world. The next part is
evaluated on the terms of resources associated in the industry for the production process and
focuses on the resources audit of the manufacturing company. The third part is discussed on
the value system of the company and the evaluation of the product and portfolio mix. The last
part has evaluated a critical analysis related to the strategies in terms of the future growth of
the company (AlQershi et al. 2019). The intense of the paper is to make a strategic analysis of
the business appraisal of Volkswagen group associated in the country Nigeria. To understand
the clear view of strategic position a, resource audit of the company, value systems procedure
by the company and understanding the BCG matrix of the Volkswagen group and evaluating
the strategic growth in terms of identifying the opportunities.
Discussion
Strategic Position of Volkswagen Company Limited
The Volkswagen Group mainly focuses on manufacturing the most efficient,
sustainable and innovative and customer-oriented product for the growth of the company.
The vision of the company is to achieve one of the leading position in providing automobile
mobility across the year 2025. The Business Strategy in 2025

4STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
Figure-1: (Business Strategy)
 Excellent employer- There is proper management in the country in term of finance,
human resource, marketing and all the operations related to the manufacturing
activities of the company. The managers are excellent in managing their duties in their
respective departments and secure managerial activities. There is significant contact
between the managerial hierarchy levels for efficient decision-making according to
the strategic planning of the company.
 Competitive profitability- The Company is focusing on gaining the profitability
through quality, reliability and integrity in the production (Aurand et al. 2017). The
aim of the company is to undergo a strong brand and acquire a competitive position in
terms of manufacturing activities in producing vehicles across the world’s economy.
 Role model for environment, safety and integrity- The Company is having the
responsibility of providing security to the employees of organisation, responsibility
towards the protection of environment, they are involved in the production process in
such a way that, it protects the environment from different of environmental hazards

5STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
(Beukes and van Wyk 2016). The company is focusing reduction of energy and water
consumption, waste disposal, and minimisation of carbon dioxide (CO2) and other
carbon emissions towards the natural environment.
 Excited customers- The Company focused on delivering the good quality of mobility
with the most innovative featured according to the diverse needs of the consumers. To
attract consumers by producing exciting features in vehicles with a strong brand in the
portfolio.
 Sustainable growth- The business is focused on achieving a long term position in the
upcoming. The production in the manufacturing activities needs to be of the better
quality of mobility, and satisfy the consumers need, the organisation is more
profitable among the history of the company and helps in sustaining the growth of the
company (Blackwelder et al. 2016).
Evaluation of the Resources
Production-The Company has a cross-brand network across the world, starting from
the suppliers of the raw materials to the end products delivered to the customers. The
manufacturing factory is present all over the world, with a total of 12 brands and 120
production locations (Cassidy 2016). The production process is supported by the specific
operational equipment’s, concepts and the production plants helps to meet the market
challenges, multi-brand locations. The company is focusing on producing electric vehicles in
the area of Anting, China. The company is situated in around 120 locations where the cars,
powertrains, motorcycles and vehicles are manufactured.

6STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
Figure 2: (Vehicle production resources)
Labour- There are around 627,000 of employees all across the world. The employees
play a competency role in initiating the innovations, operating the engines and transmissions
to build efficiency and grow the new business areas.
Capital- Volkswagen group has the highest quality of technologies with better
designs for the production process. The company is popular with multi-coloured paints works
in the vehicle with contrasting tiles. The company is allocating the resources from the site
infrastructure and the energy flows.
Resource Audit
The Volkswagen group has two divisions which include the automotive and finance
division. The brand has a significant impact due to the raise of Diesel issue. Audi has
established the highest-earning brand in the Volkswagen portfolio. The group has the highest
investments in the research and development sector to remain in a competitive position (dos
Santos and Fukushima 2017). The company is engaged with making premium vehicles,
sports cars, vehicles and the bikes and offer the financial services to the dealers and
customers by providing the services related to the leasing, financing to the customers,
insurance and offering the mobility services.

7STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
The company is focused on innovations in manufacturing technologies and
developing ideas for mobility in urban areas. The company is placed at the top in terms of the
most significant number of employees in the automobile industries. The business has
exceptional supply chain management system for efficiency in the supply of material process
starting from the procurement of raw materials to the packaging, transportation and delivery
of the products to the geographical location of the customers (Hąbek 2017.).
Value System of the Company
The company has an official distributor in Nigeria. Motors Ltd is one of the distributors in
Nigeria. The company has outstanding standards in providing sales services. The company is
giving affordable cars for the people of German (Kompalla, Kopia, and Tigu 2016). The
primary business process involved in Nigeria are:
 Outstanding distribution of the products to the strategic locations globally.
 The company is focused on competitiveness in terms of pricing.
 Create a selling advantage for the established group with brilliant services in the sale.
 The reputation of groups in the market.
 Their strategy is to understand the needs of the customers and stay close to the
customers for understanding the requirements.
 The group has opened frontiers like video conferencing, communication and audio-
video solutions for monitoring the customers’ requirements and providing the best
experience in terms of delivering the automobiles (Kulakova, Chevhanova and
Novikova 2019).
Evaluation of the Product and portfolio Mix
(BCG Matrix)

8STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
The following is the BCG growth-share Matrix for the Volkswagen Group to understand the
brand position of the group in terms of industry attractiveness or market growth rate of the
company and the competitive status or relative market share of the company.
Figure 2: (BCG Matrix)
 Stars- In this case, the products have a high demand in the market, and the business
market is still going. The company is, therefore, undergoing certain investments
activities for sustaining the profitability position of the firm. The investments protect
the star product from becoming a leading producer as a cash cow. Among the
Volkswagen group, the brand known as SKODA related to the production of
passenger cars has gained higher sales in the market (Małys, Światowiec-
Szczepańska. and Zdziarski 2017). But, in the year 2017, the profit margin of the

9STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
brand was decreased due to a decrease in demand. SEAT is another brand in the car
whose sale revenue is increased and has a sustainable future in the market.
 Cash Cows- In this case, the products are well recognised in the market, and the
products are identified as cash cows. Hence, the firm is more focused on the
development and targeting the goals. Therefore, investors need is less in this case.
Volkswagen group is in the form of cash cows in certain brands like Audi and
Porsche. These divisions have relatively high sales in the market. Total annual
revenue of Porsche is around $21,674 million, and Audi is approximately $60,128
million. The company has the most valuable brands of nearly $11 million value in
terms of brand.
 Question marks- The products are having a higher level of uncertainty. There is a
chance of risk related to failure in the market, and the relative goals are not achieved.
In the case of the Volkswagen group, the brand known as Bentley has an excellent
financial performance in some regions but has declined in some areas of the US. The
company has propelled 3rd generations of the brand and has acquired a positive
response in the market. But, the overall performance of the business is declined in the
year 2016. Another question mark is related to Volkswagen Golf in the year 2017.
The brand has updated the features, but currently, it has question marks in the market
(Mc Donald 2016). This is because electric cars are emerging as a rapid expansion in
the market due to their environmentally-friendly vehicles.
 Dogs- In this case, the production units failed in the competitive market. Lower in
market share and market growth make the product difficult to sustain in the industry.
In the Volkswagen group, VW Beetle is the dog for the group. The brand-related to
the car had high demand in terms of new designs in the automobile sectors, but the
chance of growth is not significant. The production was not able to generate the

10STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
revenues as compared to other luxuries cars. The management has decided to
discontinue the production.
Analysis of the Future Directions of the Group for Strategic growth
The Volkswagen Group in Nigeria has analysed specific future directions for the long-term
sustainability of the firms. The following are the key future strategies of the company.
Identification of the options
 Vision and Values: The Company has a long term vision to provide the world class
services in sales and spare parts for promoting valuable brands. The operations related
to the automobiles are delivered by outstanding showrooms, great service
infrastructural departments, and best services in delivering (McLean 2019). The
company has the vision to focus on the growth of industrial and services sectors
because of the population growth in the country.
The group has a value chain in establishing a new automobile policy in extending the
values of the brands of Volkswagen vehicles in Nigeria. The company has established
policies and ambitions of the governments in the local region to promote their products and
full independence in the importing activities of the products. The group is focused on
establishing higher standards and ethical principles in the corporate culture.
 Global Growth: The Company is working on the expansion of revenue streams across
the new production sectors. The group has invested in specific local businesses, for
enhancing the product growth in the product lines by proper allocation and effective
utilisation of the resources. The company is directed to large scale investments in the
African country for key strategic growth of the business (Müller-Stewens, G. and
Stonig, 2016). The company is involved in multiple business in terms of

11STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
manufacturing, agriculture, mining and other service-related activities for strategic
growth across the country.
Evaluation of the options
 Diversification: The organisation has a strategy to do a collaboration with
international companies to acquire sustainability in the products. The company wants
to diversify the business related to the other sectors like agriculture, automobiles
assembly and distribution, food products producing industries and other agro-
commodities industries like health care, heavy industries and many more. The
 Customer-oriented: The group has world class technologies and equipment for the
production with an association with the international companies. The company is
focused on training local employees to compete with the global position. Establish a
wide area of services to reach to the geographical regions of the customers. There are
various workshops situated in multiple locations to reach to the local customers with
the proper support to the servicing activities (Noe et al. 2017). The company has a
strategy to provide the services after the sale like washing bay, automatic tyre
changer, FIE calibration unit, in the house training centre, repairs in mechanical and
electrical activities. The company has a strategy to create strong brand loyalty among
the customers with a higher quality of products and reasonable and fair pricing of
products that can be affordable to the Nigeria population.
Recommendations
1. The company has initiated eco-friendly vehicles only to specific brands. The company
needs to develop technology in other automobiles sector and take a comprehensive
approach in the development of the infrastructure, supplying fuel to environmentally-
friendly vehicles.

12STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
2. In addition to monitor and other services of the automobiles like training and
workshops, the groups need to focus on testing the products with the help of
demonstration of the products in the roads, so that the performance can be estimated
and evaluated, and the very problems in the engines can be identified (Svensson,
2016).
3. The completion of automobiles services is expanding all over the world. The
company needs to advertise the product with a proper introduction of the products to
enhance the competitive position among the manufacturing industries.
4. The company need to support efficient measures and principles in the organisation to
accomplish energy conservation activities in the operating process.
5. The company needs to take care of the manufacturing activities in terms of proper
auditing and production process by the establishments of robots and artificial
intelligence for flexibility in the system and adequate usage of the important
information related to finance, operations and research, human resource and
marketing (Toklu et al.2016.).
Conclusion
Therefore, it has been found from the critical analysis of the report that the
Volkswagen group is the leading company in terms of producing customer satisfaction and
brand loyalty automobile products all across the world. The company is focused on
designing, manufacturing and the distributing activities. The company has a strategic position
with valuable human resources in the organisation. The company has more than 80,000
employees and has established the largest position in terms of availability of human resources
in the automobile industries. The company established in Nigeria is focused on creating a
better quality of services in the customer's geographical location. It is focused on providing
the services after the sale of the products. The services are related to insurance, testing,

13STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
washing and many more. The company has established a strategic BCG matrix. It has
acquired a different BCG matrix level in different brands. The product is identified as the
leading position in the world's economy in terms of providing the better quality of products
with a reasonable price that is an average price to the customers. The company has more
focused on financing their resources in research and development centres for building higher
features and innovations related to cars, vehicles, sports cars and bikes. It is featured as the
strongest competitor in the automobile industry.

14STRATEGIC ANALYSIS OF VOLKSWAGEN GROUP
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