Volkswagen's Performance And Organizational Structure
Volkswagen's growth over the past three decades has been a roller coaster characterized by numerous ups and downs. In 2002, the company hired Bernd Pischetsrieder, the former BMW boss to help fix its problems. While the new boss developed strategies towards promoting Volkswagen's growth, the well established plans usually go astray. The company's poor performance is evident in the fact that is share price has decline with approximately 50% whereas its profits decreased by 36%. In addition, more than 50% of Volkswagen's 100 managers are not used to making decisions on their own. This is an indication of the huge problems at Volkswagen, which also requires changes in its organizational structure.
Volkswagen's Recent Performance
The decline in the company's share price and profits as well as a seemingly ineffective organizational structure at Volkswagen is an indication of the numerous problems it currently faces across all its operations. First, the firm's customers have decided that it would have to add more value to their money if they have to retain loyalty. This is influenced by the fact that Volkswagen has traditionally charged more for its products due to innovation, quality, and an indirect lifetime guarantee. The other factors include loss of competitive advantage to GM, declined sales in China's booming market, ineffective...
Volkswagen has a relatively small market share in the U.S., but has made infrastructure investments in order to address that. The company needs to make changes to its marketing program in order to support those infrastructure investments. Most important, this means changing the promotional program. The marketing message does not resonate with consumers, the media mix may not be cost effective, and overall spending may need to increase. This could
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The process would then need to continue so that the changes that can be seen in the environment can also affect the changes in entry strategies. Environmental factors, economic factors, political/legal factors, social/cultural factors and also technological factors should all be considered. The legal factors that need to be addressed include issues in employee law, monopolies and mergers legislation, environmental protection laws, and wider issues such as foreign trade regulations.
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