Shanghai Volkswagen: Time for a Radical Shift of Gears

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1 Apply SWOT-Analyses to SVW in 1985 and 2004 and evaluate the Match between SVW's Strategies and its Internal and External Environments at both Time Points. 1.1 SWOT Analysis 1985 1.1.1 Strengths In SVW's early days, the availability of an existing network to undertake sales and distribution was an advantage to the joint venture. SVW had strong relationships to the government, since SAIC was under the government's supervision. That helped to find a big market share in China and get large contracts with the government, related companies and taxi fleets. With the technology and know-how of VW, SVW had a big plus point compared to other local producers. 1.1.2 Weaknesses SVW used a simple-technology and simple-product strategy.…show more content…
And compared to General Motors, SVW failed to build up an innovative and competent sales and marketing team. 1.2.3 Opportunities In 2000 China had fewer than 10 passenger cars on the road per 1000 people. When we look at Taiwan with 250 or Germany and the United States with 500 cars per 100 people, there is a significant potential. This is also confirmed by an annual growth rate of 30% of car sales in the last years. 1.2.4 Threats In the previous years competition on the Chinese market grew. Almost all major automakers are on the Chinese market and announced their expansion plans. In 2010 the Citigroup projects a designed passenger vehicle capacity surpassing 10 million units. State owned automakers mostly formed joint ventures with foreign com-panies and are expanding their capacities as well. Furthermore they improved their competences. Private companies, which were producers of lower-end segments and second-tier players in the short term, now could get strong competitors. Those companies prof-ited from their flexibility and low cost structure in former years and maybe now get a strong force on the market. 2 Identify the Advantages and Disadvantages at SVW as a Pioneer in China's Passenger-Car Industry. Why has SVW lost many of the Advantages it once enjoyed, and what are Sources of a Sustainable Competitive Advantage in China's Passenger-Car Industry? In 1985, Volkswagen was

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