International Business: Volkswagen

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The foundation of Volkswagen dates back to the Third Reich. For the opening of the international automobile show in Berlin 1934, Adolf Hitler demanded the development of a car which should be priced at a maximum price of 1000 Reichsmark and thus remain affordable for the average citizen. This car should be named ‘Car of the people’ (Volkswagen) and offer space for a family of four members. The first model was designed by Ferdinand Porsche in 1934 and in May 1937, the “Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH” (a company for the preparation of the German Volkswagen Ltd.) was established in Berlin (Volkswagen AG 2013). One year later, the company changed its name into “Volkswagenwerk Gmbh”: The beginning of today’s popular…show more content…
Contrary to this, Germany shows a strong tendency for outward trade flows of both merchandise trade as well as services in the breadth dimension. In this context, Germany’s focus on manufacturing becomes evident with reference to higher scores obtained for both inward and outward merchandise trade than for its equivalents in services. Overall, Germany displays an example of rising depth in its global exchange with other economies whilst continuing to sharpen its global profile as expressed in an increasing score in the breadth dimension.

b) Volkswagen can be described as a truly home-region oriented company, given that the largest proportion of sales revenues is created in Europe (table 1). However, it nearly achieved to attain 20% of its sales revenues in another region, namely South America, pointing towards Volkswagen’s objectives of further expanding globally (Volkswagen AG 2013).

Region | Europe | North America | Asia-Pacific | South America | Total | Sales revenues(mio) | 28.191 | 6.554 | 4.392 | 7.429 | 46.565 | Percentage sales(sales revenues/Total sales revenues) | 60.541% | 14.075 % | 9.431% | 15.954 % | 100% |
Table 1: Sales revenues by region (Interim Report 2013)

2a) One of VW’s most important ownership advantages at the upstream end portrays its standardization in production practices, namely in terms of MQB and MLB (Taylor 2012). These production systems allow for building different models from using the same
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