COMPANY Volkswagen

GROUP MEMBERS
BALASAMPRAS
REDDY
SAI TEJA VEMULAPELLI
HRISHITHA TOTAKURA
YAMALA ASHWIN
SHOWSHEEL
TABLE OF CONTENTS
INTRODUCTION.................................................................................................................................................. 3
Headquarter.................................................................................................................................................. 3
Volkswagen's history..................................................................................................................................... 3
Values............................................................................................................................................................ 4
Goals............................................................................................................................................................. 5
Strategic sweet sport..................................................................................................................................... 5
Volkswagen's Mission Statement.................................................................................................................... 6
Vision....................................................................................................................................................... 6
Mission: -.................................................................................................................................................. 6
PORTER FIVE FORCES......................................................................................................................................... 6
Suppliers........................................................................................................................................................ 6
Buyers............................................................................................................................................................ 6
Substitute...................................................................................................................................................... 7
The threat of New Entrants........................................................................................................................... 7
Internal rivalry/competition.......................................................................................................................... 8
PESTEL ANALYSIS................................................................................................................................................ 8
Political Factors............................................................................................................................................. 8
Economic Factors.......................................................................................................................................... 9
Social Factors............................................................................................................................................... 10
Technological Factors.................................................................................................................................. 10
Environmental Factors................................................................................................................................. 11
Legal Factors............................................................................................................................................... 12
COMPETITIVE ANALYSIS........................................................................................................................ 12
Objectives.................................................................................................................................................... 13
Current strategy........................................................................................................................................... 13
Market share................................................................................................................................................ 14
Growth........................................................................................................................................................ 14
Target audience........................................................................................................................................... 14
Price structure.............................................................................................................................................. 15
Marketing strategies.................................................................................................................................... 15
Customer satisfaction.................................................................................................................................. 15

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 Strengths...................................................................................................................................................... 16
Threats......................................................................................................................................................... 17
Key advantage............................................................................................................................................. 17
SWOT ANALYSIS........................................................................................................................................ 18
Strengths..................................................................................................................................................... 18
Weaknesses................................................................................................................................................. 19
Opportunities.............................................................................................................................................. 20
Threats........................................................................................................................................................ 21
SEGMENTATION ANALYSIS.................................................................................................................... 22
Market Segmentation................................................................................................................................... 22
Psychographic............................................................................................................................................. 22
Demographic............................................................................................................................................... 23
Geographic.................................................................................................................................................. 23
Behavioural................................................................................................................................................. 24
REFERENCES..................................................................................................................................................... 25

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INTRODUCTION

Volkswagen One of the innovative brands in the car sector is Volkswagen. Ferdinand Porsche
created it on May 28, 1973.

Headquarter

Since its inception, Volkswagen has grown into a vast global enterprise, reaching markets and
nations worldwide. Volkswagen's global headquarters are situated in its native country of

Lower Saxony, Germany's Wolfsburg

Volkswagen's history
 
A year later, the company was renamed "Volkswagen GmbH," and its headquarters were
established in Wolfsburg, a city developed expressly for the employees of the Volkswagen plant
that would mass build Hitler's dream automobile, designed by Ferdinand Porsche, for the
ordinary German.

Hitler's ambitions, however, were doomed to failure when World War II broke out; the factory
turned to producing weaponry, and the cars bearing the VW emblem were sent to the Third
Reich's army.

After the war, the Wolfsburg facility came under Allied administration, specifically British rule.
Under the direction of Major Ivan Hirst, Volkswagen started mass producing the Type 1, or as it
would later be known across the globe, the Beetle.

Initial international sales were dismal, but excellent advertising helped the Beetle become
popular among young people, and between 1945 and 1955, numbers surpassed one million.
Volkswagen also debuted the Type 2, a recognised people carrier, probably in the late 1940s.

The Beetle maintains its dominance in sales throughout the 1960s and 1970s, despite the fact that
it was quickly losing its usefulness. The automobile maintained its popularity among consumers
due to its dependability, ease of maintenance, and low fuel use. Volkswagen celebrated selling
over 15 million Beetles on February 17, 1972, overtaking the Ford Model T as the world's most
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popular automobile, a position it still maintains today. Despite the Beetle's popularity,
Volkswagen AG desperately needed new models to replace the ageing Beetle at the start of the
1970s. 

Audi/Auto Union, which WV had bought in the 1960s, offered the support. They brought with
them expertise of water-cooled engines and front-wheel drive cars. The first Golf left the
production door in 1974, and it immediately became popular. It was the vehicle that placed
Volkswagen back on the map and was marketed as the Rabbit in the US and Canada. The
Scirocco, a sportier vehicle, joins the Volkswagen lineup that same year. The German automaker
introduced the Polo in 1976 for the market for compact cars, and it quickly gained popularity
across Western Europe.

Volkswagen improved all of its earlier models in the next decade and sought to increase its
market share by acquiring Seat, a Spanish manufacturer, and Skoda Auto, a Czech company. As
the 1990s arrived, VW-owned Audi, with its goods made for a more pompous market, started to
compete with BMW and Mercedes-Benz directly. As a result, there was a gap in the market that
Volkswagen now sought to fill. Better standards and quality were now included with the third-
generation automobiles. New luxurious models, such as the Touareg, a high-end off-road
vehicle, were gradually launched.
In the last ten years, Volkswagen has been hard at work striving to break records for CO2
emissions and fuel-efficient technology. This is true of their normal gasoline- and diesel-
powered engines, but they also create hybrids.

Values

Responsibility

We belong to society. We assume social accountability. We monitor and constantly enhance our
processes and goods' compatibility with the environment.

Honesty

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Even when no one is seeing, we act morally out of inner conviction. We freely express our
opinions and are not intimidated by hierarchy. Together, we come up with the most significant
option after listening to one another.

Bravery

We take risks. Innovative. Inventors. Movers. We relax and think clearly. We influence
tomorrow's mobility.

Diversity

We come in several colours. Different. Special. A component of the bigger whole. We are
receptive to fresh perspectives, experiences, and solutions. We treat one another with respect and
on an equal footing.

Pride

We support high-quality, sustainable products. We passionately, firmly, and successfully

contribute to the business’s success. 

Solidarity

Worldwide, we collaborate without reluctance or difficulty. We are not gatekeepers; we are

bridge builders. combined, unbeatable. We are a team that is unified.

Goals
The four target dimensions are as follows: excited customers, excellent employer, role model for
environment, safety and integrity, and competitive profitability. We want to grow sustainably by
consistently pursuing these objectives.
Strategic sweet sport

The strategic sweet spot is the area where you can better, cheaper, or in a different way than your
rivals meet customer needs. Electrification, autonomous and software-defined are Volkswagen's
sweet spots. Volkswagen must ensure that its capabilities are able to meet the needs of its
customers and the changing environment in order to maintain this sweet spot. This can be hard
because customers' needs are always changing, but Volkswagen needs to stay in its sweet spot if
it wants to be successful

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Volkswagen operates in how many nations?
One of the world's top volume automakers is the Volkswagen Passenger Cars brand. The group's
primary brand operates factories in 14 countries and serves clients in 153 countries. Volkswagen
Passenger Cars delivered 5.74 million cars in 2012, a new high.

Volkswagen's Mission Statement

Vision: - rather, they use the following terminology: Our strategy works toward a specific goal:
by 2018, the Volkswagen Group wants to be the most thriving and intriguing automaker in the
world, as well as the sustainability industry's shining example.

Mission: - The Volkswagen Group does not make its internal mission statement available to the
general audience.

PORTERS FIVE FORCES

Suppliers

The Volkswagen Group's suppliers have limited bargaining power, primarily due to the global
dispersion of their suppliers. In addition, VW's code of conduct must be adhered to by suppliers
and subcontractors has a global distribution and supply chain and is a large, financially stable
company. Because it can always switch to new suppliers, its suppliers also have little power to
bargain with. However, VW's need for high-quality raw materials and its reliance on long-term
partnerships with suppliers who can responsibly meet its requirements give the suppliers a slight
edge in negotiations. In this regard, in addition to providing its suppliers with training, it also
rewards the best of them. The suppliers' overall bargaining power is low.

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Buyers
 Retail buyer 
 Corporate buyers 

There are several reasons why customers now have more bargaining power in the 21st century.
Because there are so many brands on the market, customers have many choices. Aside from that,
the customer of the twenty-first century is well-informed. Before making a purchase, he looks at
the product's quality, safety, environmental friendliness, and fuel efficiency. In addition,
businesses are spending much money on marketing and advertising to attract every customer.

In the luxury and lower-end segments, competition has increased, and brands are investing in
R&D to produce goods that exceed customer expectations. Volkswagen made a 4.8-billion-euro
investment in R&D in 2017. The customer's bargaining power has increased due to all these
factors. Aside from that, the individual purchase size is significant enough to be considered
important in the automotive industry. The customers have a lot of bargaining power as a whole.

Substitute

Due to the intense competition from several brands in the automotive industry, substitute
products pose a significant threat. In addition to these various brands, other choices can be used
in place of Volkswagen products. Volkswagen products can also be substituted for by using
other public transportation options. Volkswagen’s financial stability and well-known brand
image mitigate this threat. Because its effects are fashionable and of high quality, there is now
less threat from competitors. Substitute goods pose a moderate threat overall.

The threat of New Entrants

The automotive industry is not at all at risk from new competitors. Any brand would be nearly
unable to enter the market due to the high barriers to entry. In addition to the significant
expenditures for manufacturing, marketing, the supply chain, and distribution, there is also a
substantial investment in human resources. Additionally, legal restrictions make it difficult for
brands to enter the market. The new brands' overall threat to enter the market is very low or non-
existent.

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Internal rivalry/competition 

The automotive industry also has a lot of fierce rivalries. This is because, despite the numerous
competing brands, most of them offer matching products of comparable quality and
effectiveness. Because of this, most brands put a lot of momuch marketing, research, and
development to introduce innovative technologies to the market. Overall, there is much
competition.

PESTEL ANALYSIS

Political Factors

The US and the UK are important markets for the numerous automobiles the Volkswagen Group
produces. Sadly, there are serious concerns over the future of trade laws between Germany - the
company's home base, and those nations. The United States frequently showed in 2018 and 2019
that it is prepared to impose tariffs on imports from the European Union. There is a real
possibility that this might alter even if the car sector has not yet been affected by these levies. In
the case of the United Kingdom, the hotly contested vote to leave the European Union may lead
to higher import taxes imposed on automobiles made by the Volkswagen Group.

Volkswagen is a well-known automaker with a large international clientele. According to the

new UK government policy, sales of diesel and gasoline-powered automobiles must halt by
2040. Political tensions centred only on trade between the US, and the EU are the current issue
emerging from Volkswagen's legislative difficulties. The US government increased tariffs by
taking action. Political pressure has led to a rise in more critical positions across the board in the
21st century.
After Britain's exit from the EU, import and export taxes will be imposed. The Brexit
The agreement does, however, ensure free trade between the UK and Europe. Nevertheless,
administrative and labour costs would drive up the cost of cars. By the end of 2040, the UK
government intends to remove all gasoline and diesel cars from the country's roads as part of its
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"street to zero" agenda. The goal is to limit the number of petroleum-powered vehicles on the
road and the rate of carbon emissions so that automakers may design their products suitably.
Volkswagen has previously introduced electric vehicles, and it is putting more cars on the road.

Economic Factors
 
The car industry is crucial to every nation's growth since it generates a significant portion of its
GDP. Volkswagen also supports the countries where they operate by making a GDP
contribution. This is the rationale behind the warm welcome given to Volkswagen by numerous
nations who recognise the company's positive contribution to the growth of their economies. In
addition, the business supports a variety of industries, including the glass and steel industries.
Volkswagen is profiting extraordinarily from the fact that this type of business aids many
developing nations, like China and India. In addition, there are certain drawbacks to the
economy's volatility.

For instance, a significant issue for automobile-making is that many European individuals do not
have enough money to purchase a car. The figure indicates that Volkswagen sales decreased
dramatically in South America in 2011. Therefore, to deal with this scenario, Volkswagen
launched several automobile brands, some of which were from higher and cheaper sectors.
Volkswagen deals with cars from lower market segments in nations with weak economies. The
rise in gasoline costs directly impacts automobile sales is a further issue with auto sales. This
issue is directly tied to the nation's economic status. Volkswagen is currently concentrating on
diesel and gasoline substitutes to deal with this issue.
The semiconductor problem severely impacted the automotive sector more than the COVID-19
epidemic. Compared to sales in 2019, the coronavirus pandemic resulted in a 2.3 per cent decline
in the automaker's sales in 2020. The 2022 estimate, however, was much lower because of the
blow the global car industry took due to the semiconductor shortage.
On a variety of enterprises, the Brexit agreement has been having a sporadic effect. Among the
automakers dealing with financial difficulties is Volkswagen. It is a result of the decline in
European goods purchases among many British consumers. Vehicle sales for the corporation
have decreased as a result of it.

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Social Factors

Health craze
There is little doubt that most people on the earth are moving toward middle-class status, and
their purchasing power has significantly expanded. However, they are not interested in buying a
car with their money. The desire for driving among consumers does not rise in tandem with
spending. For financial and environmental concerns, many individuals decide against buying a
car and instead use transportation services like Uber or Lyft, bicycles, scooters, buses, and trains.
This might mean a sharp drop in sales for the Volkswagen Group and the sector. Once again, this
social transition appears to have a predominantly negative impact on younger clients. However,
millennials and Generation Z's health-conscious behaviours are causing the company's sales to
decline.
 
Mixed opinions on the brand
The numerous brands owned by the Volkswagen Group are regarded favourably. A few of its
most prestigious brands include Lamborghini, Audi, Porsche, Bugatti, and – to some extent —
Volkswagen. Volkswagen does have several brands, such as Seat and Skoda, that are less
popular with consumers. Whatever the case, many of Volkswagen's brands—which include a
mix of expensive and budget brands—struggle to stand out against opulent, forward-thinking
rivals like BMW or Tesla. Among a younger audience, this is especially true.
 
Trend of ride-sharing
The shared economic model is being adopted because people are becoming more intelligent. Due
to this, young people are increasingly adopting the ride-sharing trend. Volkswagen should thus
continue to follow the current trends and introduce products and services that meet the demands
of these customers.

Technological Factors

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Autonomous vehicles
Due to the significant advancements achieved by Tesla in recent years, automakers are rushing to
create their autonomous vehicles. The development of autonomous cars involves difficulties in
both hardware and software from a technical standpoint. High-quality video cameras and
precision sensors were among the hardware limitations already removed. However, creating
software that can precisely identify and react to even the most peculiar road scenarios will be the
key to creating safe, dependable self-driving automobiles. Fortunately, the excellent financial
position of the Volkswagen Group means that the required R&D is less of a concern than for
freshly created automakers.
Green technologies
Aside from autonomous driving capabilities, the automotive sector's primary technological
hurdles are creating more energy- and environmentally conscious vehicles. Electric motors,
batteries, and hydrogen fuel cells now rank among the most promising green technologies for the
vehicle sector. With several Audi and Porsche models, the Volkswagen Group has already
demonstrated its capacity to manufacture batteries-powered electric vehicles. For usage with
electric cars, Audi has also expressed a strong interest in advancing the technology of hydrogen
fuel cells.
It demonstrates the dedication of an automaker to technological advancement and innovation.
The manufacturer does, however, want to expand the overall number of electric vehicles on the
market starting in 2025.

Environmental Factors

Clean energy technology

Building a long-term ecologically sustainable technology is the primary goal underlying the
manufacturing of electric vehicles, hybrid vehicles, and hydrogen fuel batteries. In addition to
increasing sales, it would assist the business meet the demands of clients who care about the
environment—the environment benefits the company.

Green technologies
It is both a technological and an environmental issue that green technologies like electric motors,
batteries, and hydrogen fuel cells are being developed. While environmentally friendly
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alternatives to conventional automotive engines have several advantages for consumers (such as
better gas mileage or quicker throttle response), the primary motivation behind their
development is to allay environmental worries held by both governments and consumers. The
use of cars has historically been a significant contributor to pollution, but it appears that may
soon change. Volkswagen Group must adjust to this change in the automotive industry if it wants
to remain relevant.

Legal Factors

Guidelines
Volkswagen may be impacted by legal aspects related to security, company operations, and
labour legislation. Given that the organisation has functions in almost 160 countries. Different
countries have different laws and rules. As a result, the automobile manufacturer should adhere
to local laws before launching its goods there.

Corruption scam
Volkswagen manipulated the diesel engine vehicle carbon emission test on purpose. The firm
produced automobiles employing specialised software to lower the pollution rate from 2009 to
2015 temporarily.According to the court, the vehicle manufacturer had cheated on the emission
test. The brand was ultimately fined 30 billion euros.

COMPETITIVE ANALYSIS

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 My company Competitor 1 Competitor 2

Product/services (Volkswagen) (Hyundai) (Ford)

and objectives
and strategies

The Volkswagen (VW) Competitor’s objectives Competitor’s objectives

Objectives
company has been The Hyundai Motor In 1903, the company was
producing automobiles in Company is a global South formally established and
Germany since its Korean joint venture that consolidated in the United
inception in1937. manufactures vehicles. States. In the same vein as
Volkswagen (VW), one Seoul is home to the other manufacturers,
of the largest organisation’s Portage offers agricultural
manufacturers inthe headquarters. Chung trucks and utility vehicles
world, typically produces Jurying drew up the plans under the Lincoln and SUV
12 million units each for the Hyundai Engine labels.
year, generating revenue Organization and its
of roughly 150 billion subsidiary, Kia Engines, in
euros. Seat and Skoda are 1967. Hyundai is a South
two of the brands Korean public company
included in its product with its origins.
lineup.

Organisational resources, Current strategy Current strategy

public favorability, and a
Current After Broad Engines,
strategy wide range of offerings
Hyundai faces stiff Portage is the annual
all contribute to the
competition from a wide number two carmaker in the
brand’s success.
variety of companies in the United States.
global market.

13
 It is a worldwide In 1975, the organisation’s As of the end of 2016,
Market share
corporation that employs most iconic vehicle, The Passage employed
around 650,000 people Horse, was completed and approximately 100 factories
and might be compared to sent to locations including and over 215,000 people
well-known companies. Ecuador and Canada. globally, generating $6
When Hyundai first began billion in operating profits
selling automobiles in the on revenues of $150 billion.
United States in 1986, the Furthermore, it claims a
Success was recognised as 10% ownership in Aston
one of the top ten goods in Marin and a 50% investment
the country. Hyundai now in Jangling, a Chinese
provides various products, company.
such as automobiles,
commercial trucks, and
motorcycles.

Despite fierce rivalry and Without its subsidiary Kia One of the most exciting car
Growth
challenging economic Engines, Hyundai Engine brands in the world is
conditions, it established was ranked the eighth Portage. In 1919, the group
a new benchmark for largest carmaker in 2008; was set up in the state of
2017 car sales. in 2012, Hyundai Engine Delaware.
was ranked the fifth largest
automaker worldwide.

Volkswagen Group, Apparently, in 2012, Section Motors was made

Target
audience which includes the Audi Hyundai sold 7.12 million when the Portage Motor
and Volkswagen brands, vehicles over the globe. It Association was bought.
is a significant carmaker may be the most well- Henry Portage set up the
across the world. recognised brand in the Portage Motor Association
auto industry. to make and sell cars.

14
 However, the scandal
Price structure
surrounding diesel
engines has not stopped
affecting the
organization's primary
focus.
In 2015, the company
began producing its own
line of high-end
automobiles under the
name Beginning Engines.
Portage Motors Association
is an all-around brand that
designs, makes, markets,
sells, and fixes a wide range
of vehicles, including
trucks, SUVs, electric
vehicles, and Lincoln excess
vehicles.

Volkswagen, which was The Aslan, Intonation, During the same time
Marketing
strategies severely criticized after Beginning, Age, Elantra, period, Portage sold
the diesel scandal of i20, I10, Marcia, St. Nick 1,123,416 retail trucks in the
2015, has made a Fe, Xcent, and Hyundai US. It also sold 867,909
comeback in the years Sonata are just some of the SUVs and 595,390 cars.
2016 and 2017. sedans, sports cars, and
hatchbacks available from
Hyundai.

Volkswagen is a Some examples of It could also be the most

Customer
satisfaction household name, but
that's not all: its
automobiles are also
among the finest in the
world.
commercial automobiles well-known brand in Asia.
are the Hyundai 1620 In 2017, it sold more than
metropolitan transport, the 2.5 million cars and trucks
Air City, the Melody, the in the US.
e-Strong, the HD160, the
Uber Truck, the Powerful
II, the Super Truck, and the
Universe Idea Vehicle.

15
 Two well-known
Strengths
manufacturers have been
doing very well recently,
with Skoda particularly
excelling in the lucrative
Asian market.
Hyundai achieved global The brand sold about
fourth-place in vehicle 6,607,000 cars and trucks at
production in 2016 and has a rebate level in 2017.
the world's best- Portage is a brand that is
coordinated automobile always thinking of new
assembly facility. things to do. I

Weakness Volkswagen Automobiles Production at the Ulsan Entry Wise Compactness

and Volkswagen
Financial Services are the
two primary subsidiaries
that make up the
Volkswagen Group.
factory in South Korea LLC and Central Store
may reach 1.6 million Undertakings are both parts
annualized units. of the Portage Motor
Association. The Portage
and Lincoln names are used
for cars made by Entry
Motor Association.

Opportunity Volkswagen's resources As a result of Hyundai's The car business and the
help it keep an eye on the faith in the quality of its money-related business are
most important parts of its own workforce and output, its two biggest business
business. Most likely, a the company has areas.
brand's assets, the established a presence on a
experience of its number of other continents.
representatives, the
uniqueness of its
products, and its slick
assets, like its image, are
what make it strong. From
the SWOT analysis, here
are Volkswagen's
strengths: Volkswagen
has a huge number of
cars, so customers have a

16
 lot of options.

Threats and competition The European facility in The company at the centre
Threats
at open doors Nosovice can only produce of the brand, Portage Motor

Volkswagen's SWOT 300,000 units per year. The Credit Association LLC,
company has also invested also offers financial
Analysis
in cutting-edge work services.
Volkswagen can improve
centres in major cities like
its market position with
Hyderabad, staffing these
SWOT analysis by
hubs with 450 experts to
focusing on building up
aid in vehicle design and
its strengths and key entry
development.
points while keeping an
eye on its weaknesses and
risks.

 New vehicle warranty of 2 Hyundai BuyRight Fords are Reliable

Key advantage Year / unlimited kilometers.
 3-year paint warranty.
 6-year anti-perforation
warranty.
 2 Year free RSA within the
warranty period.
 Free 7500km / 6 months
inspection at first instant.
Yet another one of the
Hyundai car advantages is Fords are built with a
Hyundai’s BuyRight minimum lifespan of
program, which lets car 100,000 miles, meaning it
buyers have a convenient, will likely take many years
comprehensive, tailored car for its parts to wear out,
buying experience. Car assuming that it has the
buyers can use the Hyundai necessary maintenance.
Express Shopping feature
to do research and pick
which model and trim suits
their needs. They can even
find out about trade-in
value before coming into
the dealership

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SWOT ANALYSIS

Volkswagen is one of the biggest automakers in the world. It is interesting to note that, despite
being the parent firm, Volkswagen owns several well-known brands. Lamborghini, Audi,
Bugatti, Skoda, Bentley BMW

Despite being one independent company, Porsche is famous throughout all social strata.

Volkswagen makes affordable, straightforward cars to appeal to the public. The classes can also
choose from high-range vehicles.

In terms of quantity, it sold almost 10 million automobiles.

Volkswagen is, without a doubt, one of the top automakers, and we have included some facts to
prove it.

Volkswagen is renowned for making strategic purchases; through acquisitions, the company has
acquired well-known brands like Audi, Bentley, Porsche, and others.

Strengths

A very well-structured umbrella brand – 

Volkswagen is a highly well-structured Umbrella brand, as was already mentioned; this is one of
its advantages. Most people know it also makes passenger cars, buses, and highly engineered
supercars. Volkswagen has a limitless array of products, but its organizational structure is
streamlined and practical, with each significant business unit in charge of its branding and
success.

Presence across the world is strong – 

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One of Volkswagen's benefits is that company has substantial financial resources, which have
allowed it to snowball. Being one of the oldest automakers in the world and having a solid
market position versus companies like Honda, Hyundai, Toyota, and others gives it many clouts.
Germany, where it is most prevalent, is where you will only see Volkswagen cars. However,
aside from that, the corporation operates in close to 150 nations and has 70 industrial facilities.

Excellent brand recognition – 

Volkswagen is a manufacturer that produces 26,600 cars every day. Naturally, if there is no
demand, you cannot produce many such vehicles. The Volkswagen brand is well-known in
Europe and the United States, and it is expanding its influence globally. It is currently listed as
the 57th-best global brand as of 2016. Be mindful that it fell significantly from its position of
18th the year before. However, the pollution scandal makes the decline obvious. The brand has a
19-billion-dollar market value.

Operations are well managed – 

In Germany, Volkswagen is practically the source of employment for entire towns. When it
comes to operations, the company is enormous. Managing logistics, supply chain, and other
activities while handling a daily production of around 27000 cars is difficult. Therefore, it may
be argued that Volkswagen has outstanding operations management. Accenture serves as
Volkswagen's consulting partner and manages its hardware and software needs. Volkswagen has
numerous other partners besides Accenture for supply chain, accounting, and other areas.

Research & Development– 

Volkswagen vehicles are renowned for their high level of technology and dependability.
Recently, Volkswagen has expanded its product line to include motorbikes and hybrid vehicles.
In addition, every subbrand's R&D results in items that go above and beyond expectations.

Weaknesses

The emissions scandal – 

A big-time scandal that thoroughly affected the leading umbrella brand. Nearly 5 million
vehicles were returned to the company, which is never good for the leading brand. Trust was
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shattered, mainly because this decision to install the wrong software came from the company's
top management. So what else are they hiding?

Competition eating away margins –

 Another issue with Volkswagen is that the same issue plagues all big automakers. Several other
brands are invading the market, and fierce price rivalry exists. As a result, while this competition
is good for consumers, it is not good for the brand. For instance, the company had to reduce its
pricing in India to increase its popularity drastically. As a result, margins were greatly reduced as
a result of competition.

India's positioning is weak. I can tell you that Volkswagen's brand positioning is terrible because
I am from India. Overall sales for Maruti and Hyundai are pretty strong, and Volkswagen cannot
compete with Maruti.

Opportunities

Purchasing power is rising –

Similar to other vehicle makers, one of Volkswagen's primary benefits is that consumers' ability
to purchase automobiles has risen yearly. Due to the different campaigns undertaken by
automobile makers and the loan and financing choices offered to consumers, automobiles that
were formerly considered pricey are now perceived as necessities. The consumer environment is,
therefore, prime for plucking.

Worldwide expansion Possible – 

Demand will only increase as GDP and product demand both increase. More and more nations
fall under the category of Emerging. Volkswagen's chances of going global increase as it makes
more extraordinary efforts to enter these emerging markets. Volkswagen must, of course, also
learn to adapt its goods to local demands and local markets.

Increasing Fuel Efficiency – 

The brand has suffered dramatically due to the emissions scandal; therefore, it is crucial to
bounce back just as strongly and develop some excellent fuel-efficient models.

Modern and innovative designs – 

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Automobile designs are generally the ones that get the most attention. Each company, therefore,
releases fresh designs every quarter to maintain its identity and attract new clients.

Hybrid cars / Fuel efficient cars / Auto driving cars – 

Future automobiles will consist of these three categories, and manufacturers that develop the
appropriate models on schedule will dominate the market. It is time for Volkswagen to gradually
start going in that direction, much as how Tesla has already made significant progress with self-
driving vehicles. Future customers and governments will turn to renewable energy sources as
gasoline prices rise, and hybrid vehicles will play a significant role at that point.

Threats

The damage to the brand reputation caused by the emission problems is one of Volkswagen's
biggest challenges. More than 5 million vehicles, including models from Audi, Volkswagen,
SEAT, and other automakers, had to be recalled. After returning their autos, individuals were
hesitant to buy another Volkswagen vehicle. To re-establish its brand's power, Volkswagen will
need to invest a sizable sum of money in brand development.

Competition is ever-increasing – The level of competition is only likely to rise shortly. No

laxity will be allowed on this front.

Various countries' governments have different rules and laws-

All governments prefer to safeguard and assist their domestic automakers over those of other
countries. Most nations adopt regulations that favour domestic automakers to preserve the
revenues inside their borders. International automakers are impacted by changes in government
policy since design adjustments are necessary to comply with the policy.

Innovation is being used everywhere-

Tesla introduced various hybrid vehicles. Additionally, they have introduced self-driving
automobiles considerably more quickly than any rival. R&D is well-established at other
companies, like Toyota, General Motors, and others, and innovation may originate from any
business. Volkswagen has to be conscious of this and ready with a top-notch R&D staff to
develop and produce in response.

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 Emissions-related problems –

Altering emission regulations would harm Volkswagen since more slip under the radar. We
know from experience that Volkswagen will break the law rather than adhere to the emission
standards. As a result, government organizations will not support it in the future and will give it
scrutiny. As a result, Volkswagen will incur higher costs anytime it needs to modify its engines
to meet the most recent emission regulations.

SEGMENTATION ANALYSIS

Market Segmentation

Volkswagen serves a diverse range of customers, some of whom belong to the middle class or
are considered to be in the middle class., and additional members of the upper class. The group's
premium brands, such as Audi, Lamborghini, and Bugatti, target the wealthier members of
society with their high-end automobiles. The intended market for passenger cars is middle-class
consumers seeking a dependable and secure vehicle at a price within their price range. To meet
the individual requirements of distinct clientele, Volkswagen employs segmented marketing and
divides its market according to a variety of psychographic, demographic, geographic, and
behavioural criteria. Volkswagen can thus maximize its profits.

Psychographic

Psychographic segmentation was used by Volkswagen to divide the market based on the values,
beliefs, interests, attitudes, lifestyles, personality traits, social status, and any other relevant
psychographic criteria of the customers. Volkswagen began by instructing the Indians on how to
correctly pronounce the Volkswagen brand name in order to make them more familiar with the
product. After that, they found that the majority of Indians used their cars as a means of
protection or as a place to hide from their families, so they made the car's level of protection and
size important factors. After that, they found that the majority of Indians used their cars to hide
from their families or find safety. As a consequence of this, they put safety features and vehicle
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size first. Volkswagen has divided its market according to the lifestyles and interests of potential
customers. In this regard, some of the customer subgroups that the company focuses on catering
to include people who only require mobility, fans, and comfort. Customers who only require
basic mobility or are primarily interested in the practical advantages of owning a car are best
served by Volkswagen's compact models. The cars that are sold to these customers have a
straightforward appearance and are cheaper to buy and maintain.

Demographic

The demographics of Volkswagen depend on:

• Most of their cars are made for middle- and upper-class people.

• Young professionals between the ages of 20 and 27

• Excellent transporter for small businesses

• People who adore cars with cutting-edge features • Customers who see owning a car as a sign
of their status

• A client who places a higher value on a more powerful engine and smooth operation.

Geographic

Geographic: Volkswagen’s extensive global presence enables the company to effectively

communicate with both its current and potential customers. Additionally, Volkswagen operates
assembly lines or manufacturing facilities in numerous nations around the world. As a result,
target markets experience minimal delivery, implementation, and service delays. In the case of
Volkswagen, there are six primary geographical regions that work well together to maintain a
steady growth rate and fulfil the particular requirements of their respective objectives. Following
that, the regions are divided into urban and rural areas based on the characteristics of each. It is
important to note that the regions in question are South America, China, Western Europe,
Eastern Europe, and North America. In total, Volkswagen operates in 153 nations around the
world.

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Behavioural

Volkswagen behavioural segmentation: There are two ways for businesses to focus their
strategies. Systems can be targeted with the help of mass advertising, explicit advertising,
separate progress, and micromarketing. William Stanton says that the most common way to
divide a product's markets into several sub-markets or sectors with the same important
characteristics is through market division. To meet the needs of its customers, Volkswagen uses
psychographic, fragmented, geographic, and sociological models to divide its market. By
evaluating customers' beliefs, interests, points of view, lifestyles, character traits, and social
position, psychographic division consolidates a market. Volkswagen focuses on the lifestyles and
interests of its customers. The organization targets clients who need opportunity, delight, and
solace. Volkswagen aspires to lead the way. Volkswagen sells itself as a company that makes
cars for different customers than other companies that make cars with the same features.

Resources and capabilities

Key resources included finance, technology, plant and equipment, location, distribution network, and brands.

Key capabilities include product development, purchasing, engineering, manufacturing, financial

management, R&D, marketing and sales, government relations, and strategic management.

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REFERENCES

• https://europe.arcelormittal.com/newsandmedia/europenews/2401/eur_vwfastlane
• (https://www.bloomberg.com/profile/company/7951302Z:CH)
• https://www.autocarpro.in/news-international/vw-picks-55-strategic-supplier-partners-fast-
initiative-20039
• https://www.automotiveworld.com/news-releases/volkswagen-honors-top-suppliers/
• https://pestleanalysis.com/pestle-analysis-of-volkswagen-group/
• https://www.mbaskool.com/pestle-analysis/companies/18034-volkswagen.html
• https://swotandpestleanalysis.com/pestle-analysis-of-volkswagen/
• Hyundai Motor Updates ‘Strategy 2025’ to Accelerate Transition into Smart Mobility Solution
Provider
• SWOT analysis of Volkswagen - Volkswagen SWOT analysis (marketing91.com)

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