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“A Real-Time Case Analysis”

University of the People

Marketing Managment

Dr. Harsha Lalwani

November 30, 2022

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“A Real-Time Case Analysis”

Volkswagen went through a scandal in September 2015, which damage its brand

reputation. The scandal was brought in America when the Environmental Protection

Agency (EPA) discovered that Volkswagen´s diesel vehicles had a defeat device. The

defeat device improved the performance when testing the carbon dioxide emissions

levels. Volkswagen have no choice but to accept its mistake, so the problem wasn´t

anymore only in America but also in Europe. (Hotten, 2015). Due to this incident, they

needed to come up with new strategies to clear their name and keep their customer and

have new customers.

Volkswagen´s Strategy in 2018 in a few words was to innovate by producing

successful, sustainable, and nice cars. Volkswagen wanted to increase productivity,

increase sales, and provide good jobs.

From my point of view, the most important key element of Volkswagen´s Strategy

2018 is “sustainability”. Sustainability helps maintain or support the environment and to

prevent or stops the loss of natural resources. The emission scandal they went through in

2015, gives a bad press image about Volkswagen damaging the environment due to CO2

emissions. Volkswagen wants to rebrand its company, so people think they are a

sustainable company and try to erase the emission scandal it went through.

It seems to me that they should make emphasis providing a safe working space

with communication between managers and employees. Due to the emission scandal in

2015, Volkswagen´s employees comment that they couldn´t talk to the manager, since

they feel fear to do it. Probably if they would trust their employees and had good

communication, the CEO could know what was happening. Even though they also focus
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on being a top employer, they didn´t share that with the customers. Their customer saw in

the news how their employees feel in relation to the managers or the CEO. As I see it, this

could have helped to recreate their image after this scandal.

Volkswagen sells a lot of cars that use diesel, due to being cheaper than gasoline.

They have worked hard through the years to achieve good quality diesel cars. It is

probable that they go through a process of cannibalization since selling electric cars can

reduce the sale of diesel cars. This happens even though they aren’t offering a line

extension for the cars that use diesel, they are creating a totally new product to compete

with different automotive brands. However, this can still be a possibility. It can be a good

thing because this means they are offering better cars.

I believe it is a good strategy, since currently most of the people who can afford an

expensive car, think about opting for electric cars. Also, it is helping to reduce the

damage they made due to emissions, they are working on sustainability since they will

produce cars that will help to reduce pollution. Currently, most automotive companies are

looking into making ecological cars with electric motors, lightweight constructions, and

of course reducing CO2 emissions.

The overarching vision driving Volkswagen´s Strategy 2025 is clear, they want to

become an environmentally friendly automotive. Also innovate by having a line of self-

driving cars. The approaches they are taking might help, especially the way he is

changing the way they treat their employees, making them feel part of the company and

free to express their opinion. They even made a Code of Cooperation, to work towards

employees’ rights.
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The initiatives designed to transform certain areas of Volkswagen´s core business

are achievable if they follow the guideline they have proposed. They will work on

different areas starting with production and finishing with government relations.

Volkswagen has a plus, they have good branding, a strong brand, a competitive

advantage in the market, it is easier to grow the brand, they have client reorganization,

and costumers loyalty among others.

Probably, they will need to focus on reinforcing their new image in their publicity

campaigns, especially focusing on their new line, the electric vehicles (social media,

internet search, billboards, tv/ YouTube commercials, etc.). Also joining ventures with a

battery provider would be a good idea since other companies have more experience in

doing this and will facilitate the process, plus if they do a joint venture with a big

company like Tesla it would improve their reputation. Definitely their operational plan

with modifications according to different situations can help them overcome the emission

scandal. However, this doesn´t mean they can achieved all the goals they have.
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Reference:

Foley, A. (2021, December 10). Strategic planning vs. operational planning: 7 main

differences. ClearPoint Strategy. https://www.clearpointstrategy.com/strategic-

planning-vs-operational-planning/#sect1

Hotten, R. (2015, December 10). Volkswagen: The Scandal explained. BBC News.

https://www.bbc.com/news/business-34324772

Magadia, Rex & Hanno, Maha & Kadoo, Anuja & Akinsaya, David & Carlson, Andrea.

(2019). A Real-Time Case Analysis. 10.13140/RG.2.2.16446.74563.

Mollenkamp, D. T. (2022, September 8). What is sustainability? how sustainabilities

work, benefits, and example. Investopedia.

https://www.investopedia.com/terms/s/sustainability.asp

Wellbrock, W., Ludin, D., Röhrle, L., & Gerstlberger, W. (2020, December 30).

Sustainability in the automotive industry, importance of and impact on automobile

interior – insights from an empirical survey - International Journal of Corporate

Social Responsibility. SpringerOpen.

https://jcsr.springeropen.com/articles/10.1186/s40991-020-00057-z