Business management can be referred to as the art, craft and science of implementing, evaluating or formulating cross functional decisions, which enable the organizations to achieve their long term objectives. In simpler terms, it can be defined as a procedure of specifying any organization’s vision, mission as well as objectives on developing policies or plan (Armstrong et al., 2015). The report discusses about the business level strategies of the Volkswagen Group for the long term success of the firm. Moreover, it throws light on the corporate level strategies for the firm’s success and the competitive environment. In addition to this, the strategies are being compared at each level and how they differ in the slow cycle or fast cycle markets. Volkswagen Group, often known as Volkswagen AG is a multinational automobile manufacturing company of Germany. It manufactures, distributes and designs commercial and passenger vehicles, engines, turbo-machinery, motorcycles and other services like leasing, fleet management and financing (Volkswagenag.com. 2018).
Business Level Strategies
Volkswagen Group has overarching vision, which is to become the leading provider of mobility all across the world. Their mission is to offer tailor made solutions of mobility to its customers. They serve their target market in accordance with their diverse demands and needs, along with a portfolio of stronger brands. Their responsibilities regarding the social, safety and environmental issues are highly satisfactory. Moreover, the company believes in acting with integrity, reliability, passion and quality as the foundation of their activities. The company’s strengths are its customers’ trust, excellent employers, sustainable growth and competitive profitability. The company is considered to be the role model for safety, integrity and environment (Wesseling et al., 2015). Moreover, Volkswagen Group’s business strategies are to achieve greater success as the aim of their products relies on best consumer analysis. There business strategy aims at achieving stronger customer value proposition and according to the internal and external analysis; the company has greater strategies for their long term success.
In addition to this, the company has implemented a number of functional strategies in order to achieve the consumers’ desires and demands. This includes manufacturing strategies, source strategies that is establishment of the domestic funds and continuously improving the quality of the product. The consumer relationship programs and other strategies are being implemented by the company for their long term success. The well developed strategies include four dimensions, which are well product market investment strategy, strong value proposition of the customers, assets as well as core competencies and lastly, good functional area strategies. These strategies of the company help in analyzing the external as well as internal factors affecting the industry (Charles Jr, Schmidheiny & Watts, 2017). Moreover, they stress on developing a strong consumer value proposition and identify their needs through market analysis as well as research.
Corporate Level Strategies
A well developed corporate strategy should address the strategic choices, organizational structure, primary concerns of the people and dimensions of organizational culture. The Volkswagen Group has identified the differentiation strategy as its major corporate or marketing strategy. Developing these strategies has helped in improving their products’ quality and expanded services, which go beyond the normal standards of automobile manufacturing. The company focuses on their quality strategies, which is seen as a part of the whole differentiation strategy. The differentiation strategy is being undertaken in order to differentiate the company’s products or services from its competitors and compete on the international platform (Ephraim, 2016). The management of the company assigns its employees to the particular value creation projects as well as roles, which are linked together in order to create a framework. This helps in increasing quality provision, responsiveness, effective service delivery, competitive advantage and innovation (Li et al., 2018).
Volkswagen Group has succeeded by integrating the efforts its employees all across the company’s structure, business sections and functions just to specify the set of strategies that are being achieved by the company. Moreover, the organizational culture is also very flexible along with all the roles and responsibilities clearly mentioned and allocated to the staff members. The organizational structure has been one of the most contributing factors for providing effective implementation of the strategies, where each and every employee know his/her job expectations as well as descriptions. However, the development of the corporate business strategies should take into consideration, all the public involved into the procedure. This can be done by ensuring the fact that the production is of good quality along with the services in order guarantee target consumer satisfaction (Bayçu & K?l?nç, 2017). In order to achieve this, Volkswagen Company has been installing certain programs for training its human resource managers prior and also after the strategy is implemented and devised.
Comparing both the Strategies
Both the strategies have been designed in order to achieve the desired results or outcomes. On comparing the business level and corporate level strategies, it can be said that the Volkswagen Company is more concerned about speculating the future environment of competitiveness as well as meeting the needs of its target consumers. Moreover, it has developed these strategies in order to develop its products or services, which will be able to compete under favorable conditions with their competitors. The strengths as well as weaknesses and opportunities and threats are being considered, while designing the component. The definition of these strategies enables in executing their business as well as corporate strategies, while ensuring that both the units are being integrated together for easy management. The competitive contacts are more concerned regarding the opportunities and threats of the business and coordinating the usage of the company’s resources, the company formed its corporate relationships and activities as well (Rhodes, 2016).
The differentiation strategy undertaken by the Volkswagen Company is the most successful one and it will benefit the company on the long run. The company will be able to differentiate its products from its competitors and leverage their internal strengths as well as potential for the operational efficiencies. The choice between decentralization and centralization of the corporation needs more and more considerations so that the external factors do not affect their competition level. In addition to this, the company will get benefitted in terms of availability of the resource as well as workforce. This strategic choice, principles, organizational culture and designs will help the company in shaping their employees’ behaviors, values, beliefs and norms as well (Crane & Matten, 2016).
Differentiation strategy in slow and fast-cycle markets
In order to understand the differences of the differentiation strategy in the slow and fast-cycle markets, it is important to know what a market cycle is. The most significant competitors of the company are Ford Motor Corporation, Toyota Motors and others. The competitors depend upon the condition of the markets as well as market cycle. The cycle can be divided into three different parts that are slow-cycle, fast-cycle and standard-cycle market. If the company is in the slow cycle, then most of the competitors will be different from its fast cycle market (Miranda-Agrippino & Rey, 2015). It can be mentioned that in slow cycle markets, Volkswagen Group’s differentiation strategy needs to increase its strategies alliances into the restricted market, in order to maintain their market stability. The competitive advantage of the company can be attained by gaining an understanding regarding the copyrights, patents, ownership of the IT resources as well as geography (Haldane, 2015).
The competitive advantage of the differentiation strategy in the fast cycle market can be attained by protecting, maintaining or extending its competitiveness and segregating its products or services as per the consumers’ demands or desires. However, in the slow cycle market the company can get back towards the actions of competitiveness by launching some new strategies or objectives. On the other hand, it is seen that the competitive advantages of Volkswagen Group is more protected from imitation in the slow cycle market, as in fast cycle markets imitation takes place very fast. The competitive advantages of the differentiation strategies undertaken by the company are less sustainable during the fast cycle period. The company can use innovative technology of higher quality products or services in order to take the competitive advantages within the fast cycle markets. On the contrary, it is seen that the slow cycle market is less violent than the fast cycle market due to the rapid decline of the prices in organizational products, which also tend to decrease the overall profitability (d'Amato, 2015).
To conclude, each and every organization need to look carefully as their intended business level as well as corporate level strategies are being compared to that of their competitors. It helps in leveraging their internal potential and strengths for the operational efficiencies as well as effectiveness. Poor strategies of any company may lead to the downfall of the organization and malign their brand image as well. The report throws light on the business level as well as corporate level strategies of the Volkswagen Group and after comparing both, it is found that the differentiation strategies adopted by the company would benefit it on the long run. In addition to this, the report has also highlighted the differences of the differentiation strategies in the slow cycle as well as fast cycle markets. It can be said that the slow cycle market is less violent than the fast cycle market, as it reduces profitability.
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.
Bayçu, S., & K?l?nç, Ö. (2017). Analysis of Volkswagen Emission Crisis in the Context of Crisis Response Strategies and Newspapers Framing. ?leti?im Kuram ve Ara?t?rma Dergisi, 1(45).
Charles Jr, O. H., Schmidheiny, S., & Watts, P. (2017). Walking the talk: The business case for sustainable development. Routledge.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
d'Amato, M. (2015). Income approach and property market cycle. International Journal of Strategic Property Management, 19(3), 207-219.
Ephraim, P. E. (2016). Transparency and Ethical Considerations in Business Organizations: A Comparative Case Study of Crisis Relations Strategies of Volkswagen and Mitsubishi Motors. International Journal of Online Marketing Research, 2(2), 1-9.
Haldane, A. G. (2015). Growing, fast and slow. University of East Anglia, 17.
Li, L., McMurray, A., Xue, J., Liu, Z., & Sy, M. (2018). Industry-wide corporate fraud: The truth behind the Volkswagen scandal. Journal of Cleaner Production, 172, 3167-3175.
Miranda-Agrippino, S., & Rey, H. (2015). World asset markets and the global financial cycle (No. w21722). National Bureau of Economic Research.
Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37(10), 1501-1518.
Volkswagenag.com. (2018). Retrieved from https://www.volkswagenag.com/
Wesseling, J. H., Niesten, E. M. M. I., Faber, J., & Hekkert, M. P. (2015). Business strategies of incumbents in the market for electric vehicles: Opportunities and incentives for sustainable innovation. Business Strategy and the Environment, 24(6), 518-531.