Volkswagens' Management Strategies

1560 WordsSep 26, 20067 Pages
Executive Summary Volkswagen has been one of the leading motor vehicle manufacturer for a long time. With all the competition in the automotive industry, it has been challenging for Volkswagen to get into the position that they are in now. They are involved in almost every type of car market out. Teenagers can enjoy the Volkswagen Jetta, while parents would love the Tourareg. Volkswagen has even put a foot into the exotic car industry with expensive automobiles such as the Bentleys and Lamborghinis. The management of Volkswagen is responsible for turning Volkswagen into a global manufacturer. Dr. Bernd Pischetsrieder, former CEO of Volkswagen, implemented his model strategy and with their various business strategies, the management team…show more content…
Product Development and Module Strategy The product development and module strategy is the use of modules, or platforms, to communize the unique brands in VW 's portfolio. This approach is implemented within the production phase where similar parts, technology and systems designs, equipment and knowledge are used in various VW brands to attain cost savings in procurement, research and development, worker training. This platform strategy was implemented primarily in Europe where production costs were soaring and profits decreasing. It eliminated various corporate redundancies that had caused the sagging profits. By borrowing design ideas from VW 's other brands, they were able to utilize common suppliers and eliminate unique sub-structures that added considerable cost in money, time or technology. This strategy allowed a strong technology/knowledge transfer between plants. Multi-brand Strategy The multi-brand strategy was produced from the desire to have a presence in multiple automotive markets, and therefore capture a full range of the customer spectrum. In addition, it is a solution for one of the negative consequences of the module strategy; it was found that by "commonizing" (www.forbes.com) some of the lower VW brands (Seat and Skoda) that the VW brands were no longer differentiated. Acquisition of Bentley and Bugatti in 1997 was a response to this issue, as well as recent financial growth.

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