TASK 3: INDIVIDUAL ASSIGNMENT

FORD MOTOR COMPANY’S

AND

VOLKSWAGEN IN GERMANY

INTERNATIONAL BUSINESS

BY:

WAN MUHAMMAD DANIAL BIN AMRAN

(M23301129)
Introduction

Ford Motor Company’s

Henry Ford founded the Ford Motor Company in 1903, and it has since grown into a major
player in the automotive industry and a global powerhouse. Ford, known for inventing
assembly line manufacturing, transformed the auto industry by lowering the cost of cars and
increasing their accessibility for a wider audience. Ford's global reach has grown significantly
over time, spanning multiple continents in order to satisfy a wide range of market demands.

Ford wants to be more responsive to local needs and save expenses as part of its overall plan.
Thus, the German operations are essential to accomplishing these goals. We may learn more
about Ford's commitment to efficiency and coordination by looking at its organisational
structures throughout the world, with a particular emphasis on its activities in Germany.
Gaining insight into Ford's strategies for navigating the automotive business, particularly in
light of its European expansion, can help one better understand the company's competitive
posture and its efforts to maintain its leadership in the rapidly changing global market.

Volkswagen

Volkswagen was founded in 1937 and is based in Wolfsburg, Germany. It is one of the major
international participants in the automotive sector. Volkswagen has a long history, characterised
by classic models like the Beetle and the Golf, and was founded with the goal of making cars
accessible to the general population. The company is well-known for its innovative and
excellent engineering, and it has come to represent German automotive workmanship.

In light of its global operations, Volkswagen's strategic position in Germany is particularly

significant. Volkswagen's global endeavours are based on its home country's excellent
manufacturing capabilities and automotive knowledge. The corporation has demonstrated a
dedication to modifying its operations to satisfy a range of regional demands by expanding into
numerous overseas markets, most notably Latin America in recent times.
In this investigation, we want to identify the organisational frameworks that Volkswagen and
Ford Motor utilise to manage their global operations. Evaluating how modern these
arrangements are and how they affect productivity is essential to comprehending how big
multinational automakers negotiate the challenges of a globalised market while attempting to
keep prices down and remain competitive.
Organizational Arrangement

1. Ford Motor Company

The iconic car manufacturer Ford Motor Company has long used a vertical
organisational structure to simplify its global operations. Decision-making power in
this hierarchical system is distributed from upper management to different
organisational levels.

The company's overarching strategic goals and objectives are set by the top
management. A unified vision and strategic alignment are made possible by the top-
down, centralised decision-making process in every area of the company. Despite being
a part of the greater corporate structure, regional or divisional units have a great deal of
autonomy. Lower-level decision-making is decentralised, which gives it the ability to
quickly adjust to local market conditions, legal needs, and customer preferences.

Ford's vertical organisation makes it easier for top-down communication to occur and
guarantees that the corporate strategy is applied uniformly throughout the company's
many areas. Because each unit has the authority to decide in response to local needs, a
flexible and responsive work environment is fostered.

However, striking a balance between regional autonomy and the requirement for global
consistency may provide difficulties. Ford's vertical organisational structure works well
because it strikes the correct balance between decentralised autonomy and centralised
control, which enables the business to successfully negotiate the challenges of the
international car industry.
2. Volkswagen Company

Volkswagen, a titan of the automotive sector, has wisely adopted a vertical

organisational structure to efficiently manage its vast international activities. Decision-
making power is concentrated at the top of this hierarchical organisation, where senior
executives determine the overall corporate strategy and direction.

The mission, vision, and long-term goals of Volkswagen are formulated at the highest
level by top management. A single vision and strategic alignment between various
business divisions and geographical areas are made possible by this centralised
decision-making. Volkswagen assigns divisional and regional leadership to make
decisions, but retains a centralised approach at the top levels. Local organisations are
empowered by this decentralised approach to react quickly to local market demands,
legislative changes, and customer preferences.

Effective channels of communication between the corporate and operational levels are
guaranteed by Volkswagen's vertical organisational structure. A certain amount of
autonomy is granted to each division so that it can respond to particular market
situations while still following the overarching company plan. Due to its careful
balancing act between centralization and decentralisation, Volkswagen is able to
successfully negotiate the difficult global automotive scene.

However, the corporation may have difficulties in maintaining this delicate balance as
it works to allow for localised adjustments while maintaining global consistency.
Entry Strategy for Ford into Germany: Wholly Owned Subsidiary

Given Ford's recent European expansion particularly into Germany a calculated approach to
entry is essential for success in the regional car industry. Creating a completely owned
subsidiary stands out as a wise decision among the various possibilities for a number of reasons.

1. Market Management and Flexibility:

With a wholly owned company, Ford would have complete control over its German
activities. This control is essential for adjusting to the particular requirements of the
German car industry, which is distinguished by its picky consumers and exacting
standards. Due to its subsidiary structure, Ford is able to act freely and quickly in
response to market changes and local needs. This flexibility is crucial in an industry
where customer tastes and legal frameworks are subject to sudden changes.

2. Leveraging Global Expertise:

Through a wholly owned subsidiary, Ford's extensive heritage and worldwide
automotive industry expertise can be effectively utilised. The company's established
procedures and technological innovations can be easily incorporated into the
German market thanks to this framework.

3. Brand Consistency:
Ford's worldwide identity depends on maintaining brand consistency. Ford's global
standards are met by a wholly owned subsidiary in terms of the brand messaging,
product quality, and customer experience. German consumers view the brand more
favourably as a result of this constancy.

4. Long-Term Investment and Profits:

Ford's decision to establish a long-term presence in Germany by entering the
country through a wholly owned subsidiary is indicative of this. Even though the
initial outlay can be high, there is a sizable chance for long-term earnings and
market share expansion.
 5. Risk Mitigation:
Ford has total operational control over its wholly owned business, which lowers the
risks involved with relying on outside partners. This control encompasses general
corporate strategy, quality control, and regulatory compliance.

The creation of a fully owned subsidiary fits with the general tendency of multinational
corporations (MNCs), particularly manufacturers like Ford, aiming to maintain as much
control as possible over their worldwide operations, even if it may require significant
organisational and financial resources. With this entrance approach, Ford will be well-
positioned to successfully negotiate the complexity of the German market, promoting
flexibility, brand coherence, and long-term success.

Volkswagen's plan of entry into Germany: joint ventures

In light of VW's introduction into the German market, a calculated approach to entry is essential
for successfully navigating the regional marketplace. A joint venture stands out as a wise course
of action among the alternatives for a number of reasons.

1. Local Knowledge & Expertise:

By entering Germany through a joint venture, Volkswagen is able to take advantage of
the local partner's market expertise. This is especially helpful for figuring out how to
navigate complicated regulations, comprehend customer preferences, and build a strong
local presence.

2. Sharing of Risks:
Through joint ventures, Volkswagen and its local partner can share risks. This is crucial
in new markets where there are a lot of unknowns. The risks involved in starting
activities in a foreign nation are lessened by shared financial obligations and resources.
 3. Quicker Entry into the Market:
Partnering with a local company makes it easier to enter the German market more
quickly. Volkswagen can enter the market more quickly and effectively by taking
advantage of an established partner's pre-existing distribution networks, infrastructure,
and market connections.

4. Sensitivity to Culture:

Germany has a unique corporate culture, and working with a local partner can give you
important insights into local customs and consumer behaviour. For VW to forge
connections, comprehend client needs, and blend in with the German business scene, it
may be essential to exhibit this cultural sensitivity.

5. Efficiency and Cost Sharing:

Joint ventures facilitate the sharing of investment and operating expenses, hence
augmenting overall cost effectiveness. This is especially helpful because it supports the
aim of cutting expenses, which is a typical ambition for international companies.

6. Acceptance in the Market:

Volkswagen's acceptance in the German market can be improved by collaborating with
a regional organisation. Customers frequently value enterprises that work with local
companies, and VW's operations in Germany may benefit from this favourable view.

The joint venture approach strikes a compromise between control and the benefits of local
knowledge and shared risks, whereas wholly owned subsidiaries offer the greatest degree of
control. Volkswagen may take use of synergies, expedite market access, and efficiently traverse
obstacles by utilising a Joint Venture entry approach, especially considering the subtleties of
the German automotive market. With this strategy, VW may take use of a local partner's
advantages and create a solid and competitive presence in Germany.
Scope of Operation of Ford Motor Company’s

As part of its worldwide strategy, Ford's activities in Germany are essential because they
support the company's dedication to satisfying local demands and supplying a variety of
markets. Germany presents Ford with strategic benefits as a major player in the European
automotive scene.

1. Production and Manufacturing:

Ford has a significant manufacturing presence in Germany, where it produces a variety of
automobiles for the European market. To guarantee that premium automobiles that meet
German automotive standards are produced, the company has made investments in state-
of-the-art manufacturing facilities. Ford's emphasis on local manufacturing helps them cut
expenses, effectively meet customer requests, and abide by local laws.

2. Employment and Economic Impact:

Ford's activities in Germany go much beyond simple manufacturing; they also have a major
positive impact on the regional economy. The organisation has a sizable workforce that
includes experts in R&D, sales, and marketing in addition to trained labourers in
manufacturing facilities. The effect of employment on the economies of the areas where
Ford operates is positive.

3. Market Presence and Distribution:

Ford has had a significant impact on the German market by utilising a wide-ranging
distribution network to efficiently connect with customers. The dealerships, service centres,
and sales locations of the corporation are positioned strategically to improve accessibility
for clients in Germany. With a strong local presence, Ford is able to maintain its
competitiveness in the ever-changing European automotive industry and build strong
relationships with its customers.

4. Innovation and Research:

Ford conducts research and development in Germany to be on the cutting edge of
automotive technology and innovation. Ford works with local talent and capitalises on the
nation's engineering prowess to produce innovative technologies and solutions that satisfy
changing customer demands and legal constraints.
 To sum up, Ford's activities in Germany include manufacturing, creating jobs, being
present in the market, and innovation. The firm's dedication to the German market is a
reflection of its global expansion strategy, which places a strong emphasis on local
responsiveness and bolsters the economies of the areas in which it conducts business.
For up-to-date and comprehensive details, please see Ford's official publications and
announcements.

Scope of Operation of Volkswagen

Due to its roots in Germany and its global prominence in the automobile sector, Volkswagen
(VW) has a significant and diverse presence in the nation.

1. Production & Manufacturing:

With its headquarters located in Wolfsburg, Germany, Volkswagen continues to have a
sizable manufacturing footprint in its native nation. The corporation has multiple
production facilities located around Germany, where a wide variety of vehicles,
including premium models and compact cars, are manufactured. Germany is known for
being a major centre for the production of automobiles, in part because of these
manufacturing enterprises.

2. Employment and Economic Impact:

With a sizable and diversified workforce, Volkswagen is one of the largest employers
in Germany. The company's activities generate employment in R&D, administrative,
manufacturing, and other supporting fields in addition to production. This significant
increase in employment has a good knock-on effect on the German economy as a whole,
promoting stability and prosperity.

3. Innovation and Research: Volkswagen conducts extensive research and development

in Germany in addition to its production activities. The business makes investments in
cutting-edge technology, eco-friendly transportation options, and the development of
driverless and electric cars. VW wants to be at the forefront of automotive innovation
and is working with Germany's strong engineering talent pool to achieve this goal.
 4. Market Presence and Distribution:

Thanks to a vast network of dealerships, service facilities, and retail locations,

Volkswagen is able to sustain a significant market presence in Germany. The company's
automobiles suit a wide range of customer tastes and are well-integrated into the
German automotive scene. Volkswagen is able to maintain its competitiveness and
adapt to the changing needs of German consumers thanks to its local market presence.

5. Initiatives for Sustainability:

Volkswagen gives operations a high priority in terms of sustainability. The corporation
has made steps to lessen its influence on the environment, improve manufacturing
energy efficiency, and support environmentally friendly transportation options. These
initiatives support Germany's dedication to sustainability and enhance VW's favourable
reputation there.

To sum up, VW's activities in Germany include manufacturing, creating jobs, innovation, and
sustainability. The company's prominent position in the German automotive sector
demonstrates both its longstanding ties to the nation and its continued dedication to advancing
both the regional economy and technological development. It is advised to consult VW's
official publications and communications for the most recent and comprehensive information.
Which is more modern?

Thanks to technical developments that redefine driving and solve global concerns like
sustainability and connectivity, the automobile industry is undergoing a significant shift. In this
regard, a comparison of Ford and Volkswagen, two massive players in the automotive industry,
reveals subtle distinctions in their approaches to technical innovation.

Ford Motor Company:

Ford's adoption of electric and hybrid car technology is indicative of its ongoing commitment
to technical innovation. The launch of Ford's all-electric SUV, the Mustang Mach-E,
demonstrates the company's commitment to environmentally friendly transportation options.
Ford has also made investments in connected car features and autonomous driving
technologies, incorporating smart connections and sophisticated driver support systems into its
most recent models.

Ford has a clear focus on innovation, but its strategy frequently strikes a balance between
tradition and modernity. The company's strategy of combining existing market sectors with
new trends is demonstrated by its focus on trucks and SUVs as well as its foray into electric
vehicles. With this strategy, Ford can serve a wide range of customers and progressively adjust
to the changing automotive market.

Volkswagen:

Volkswagen, on the other hand, has demonstrated a dedication to environmental principles by

embracing electric transportation and making significant advancements with its ID series.
Volkswagen's aspirational plan to shift to electric vehicles and establish itself as a frontrunner
in the electric mobility domain is reflected in the ID.3 and ID.4 models.

Volkswagen has made significant technology improvements in areas other than electric cars,
such as connectivity and autonomous driving. The company's commitment to modernising its
vehicle range is demonstrated by its investments in digital services, software development, and
the Modular Electrification Toolkit (MEB) platform.
Comparative evaluation and conclusion:

Ford and Volkswagen both demonstrate a dedication to electric mobility, connectivity, and
autonomous driving in their quest of technical innovation. Nevertheless, it seems that
Volkswagen has adopted a more assertive approach towards the adoption of electric vehicles,
as seen by the creation of a specific electric vehicle platform and a selection of ID models
tailored to satisfy the needs of a quickly evolving automotive market.

In conclusion, Volkswagen is positioned as a leader in the shift towards sustainable and

connected transportation due to its more assertive embrace of electric mobility, even if Ford
and VW both show a commitment to technological innovation. Given its strategy alignment
with shifting customer tastes and the global drive towards sustainability, Volkswagen looks to
be a more modern and technologically advanced company right now in the automobile sector.
But the sector is dynamic, and both businesses will continue to be crucial in determining how
mobility develops in the future thanks to their cutting-edge technical advancements.
Customer-Centric Design in the German Market:

Germany's Ford:

Like many other international automakers, Ford understands how important it is to customise
their products to the unique needs of the German market. This could entail being aware of
things like lifestyle decisions, driving preferences, and subtle cultural differences. To improve
the features and design of its cars, the corporation might survey consumers, study regional
trends, and perform market research.

Volkswagen in the German market:

Volkswagen, a German carmaker, is quite familiar with the regional market. The business is
probably going to use a customer-centric design strategy, accounting for the performance,
engineering accuracy, and environmental awareness preferences of German consumers. The
Volkswagen Golf, a popular model in Germany, is an example of how the business tries to
adapt its models to suit regional preferences.

A Productive Method for Customer-Centric Design

Effective Approach Qualities:

The efficacious method places a strong emphasis on adaptation and flexibility. Using this
method, firms don't start with a predetermined aim; instead, they experiment, making use of
available resources and reacting to new opportunities and difficulties.

Utilisation in the Design of Automotive Vehicles:

An effective strategy in car design can test prototypes, iteratively incorporate user feedback,
and refine designs in response to real-time market feedback. It enables businesses to co-create
with clients, adjusting to evolving tastes and technology breakthroughs.
Comparative Evaluation:

It is probable that Ford and Volkswagen will include input from customers and market research
into their design procedures. The design decisions made by both firms may be influenced by
the German market, which is recognised for its appreciation of engineering innovation and
brilliance. German car designers probably take into account sophisticated technology,
performance, and sustainability when creating cars.

In conclusion, it is anticipated that Ford and Volkswagen would create automobiles for the
German market using customer-centric design methodologies. An effective method can be a
part of their strategy, but the general tendency in the automobile business is to customise
products to match the individual preferences of various markets.
Complex VS Complicated

Germany's Ford:
Complexity Management: Ford in Germany probably takes a more emergent and adaptable
stance when handling complexity. Given the dynamic nature of the automotive sector and the
speed at which technologies are developing, Ford might place a strong emphasis on ongoing
research, experimentation, and teamwork in order to manage uncertainty.

Volkswagen in the German market:

Complexity Management: Given its prominence in the automotive sector, Volkswagen
probably takes a cutting-edge stance on difficult problems. The organisation may utilise agile
processes, foster cross-functional collaboration, and encourage new thinking to mitigate
uncertainties pertaining to developing technology, consumer preferences, and market
movements.

In contrast:

It is anticipated that Ford and Volkswagen would utilise an amalgamation of contemporary

methodologies to handle intricacy and intricacy within their respective establishments. The
focus on flexibility, creativity, and teamwork implies an understanding of the necessity for
contemporary solutions.

Determining which company accomplishes something "better" is difficult in the absence of

precise performance measures or real-time data. Ford and Volkswagen are both sizable, well-
known companies with advanced management techniques. Effectively handling intricacy and
intricacy is contingent upon a multitude of aspects, such as adaptation, organisational culture,
and leadership.
Conclusion

There are both differences and similarities between Ford and Volkswagen when comparing
their approaches to technical innovation, customer-centric design, scope of operations, entrance
tactics, and complexity management in the German market. Both businesses have carefully
adjusted to the particular requirements of the German automobile sector, taking sustainability,
legal requirements, and consumer preferences into account.

Ford chooses a wholly owned subsidiary as its entry approach, stressing control and flexibility,
whereas Volkswagen favours joint ventures, stressing the value of local expertise and risk-
sharing. Notwithstanding these variations, both approaches show a sophisticated
comprehension of the nuances of the German market.

Within their respective areas of business, Ford and Volkswagen exhibit a dedication to German
manufacturing, employment development, innovation, and market share. The emphasis on
sustainability and the effect on local economies are consistent with the worldwide trend
towards ethical corporate practices.

Both businesses are committed to autonomous driving, connectivity, and electric mobility in
terms of technological innovation. Nonetheless, Volkswagen is positioned as a leader in the
transition to sustainable and connected transportation thanks to its more proactive approach to
electric vehicles, as seen by its dedicated platform and ID series.

Regarding customer-centric design, it is probable that Ford and Volkswagen would utilise
tactics that take into account the inclinations, way of life, and cultural subtleties of German
consumers. The design process's emphasis on flexibility and adaptation shows a dedication to
satisfying changing consumer demands.

Both businesses must apply modern approaches to handle complexity, encouraging flexibility,
teamwork, and creative thinking. Given how dynamic the automobile industry is, it is
imperative that we conduct continuous research and adjust to changing circumstances. Ford
and Volkswagen seem to understand this.

The common dedication to customer-centric design, sustainable practices, and adjusting to the
ever-changing automotive landscape is indicative of the convergence of management methods.
The increasing similarity of management methods, particularly within transnational
organisations, can be attributed to several factors such as global competitiveness, cross-border
partnerships, international business education, and rising norms. Ford and Volkswagen are two
examples of multinational companies that use methods to succeed in a variety of markets by
striking a balance between local responsiveness and global uniformity.
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