Volkswagen group- China's analysis in competitive strategy

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[...] Volkswagen Group has clearly identified that in order to be and stay competitive it is important to geographically cover the entire market. This applies even more to a company wanting to lead this industry, which explains why the Group bought one of the largest showrooms in HK (rents are extremely expensive), supporting this aggressive strategy. Finally, the importance of dealerships has been grasped, and if implemeted properly with the right partners, success on the new geographical areas is guaranted. Other special Strategies and Evaluations E-mobility Strategy E-mobility is a daily reality for the Chinese consumer and relevant government policy will become ever more crucial with the future challenges that China will face: China's rate of urbanization, traffic congestion and draining of oil reserves (increasing dependency on imports). [...]

[...] Volkswagen Group entered the Chinese economy thirty years ago, and therefore played an important role in shaping this industry. After giving the reader a quick overview of the current Chinese economical situation and its implication on the country's automotive market, this paper will examine Volkswagen Group's immediate industry and competitive environment before evaluating its related diversification strategy and cross business strategic fits along the value chain. In particular, this paper provides a study of the competitive strategies that the Volkswagen Group implemented to gain a sustainable competitive edge and become the market leader worldwide, including in China. [...]

[...] In 2008 Volkswagen Group China had 48 car models on showroom floors, of those 48 models 26 are manufactured in China. Effectively the biggest car manufacturer worldwide has sold 2.26 million cars in China last year, so an increase in sales of 17.7 percent from the previous year. Those numbers excel all initial anticipations and the Volkswagen Group reinforced its market leadership over its competitors. For many international car manufacturers, emerging markets and especially the Chinese automotive market play the role of saviours, as demand for vehicles in their respective home markets begins to shrink. [...]

[...] 5: Volkswagen in China, Dr. Winfried Vahland , 2010 4 Volkswagen Group in China, Dr. Winfried Vahland, 2010 7 Volkswagen Group's external environment analysis China's economy is growing rapidly, and the country is developing into one of the largest markets in the world. For the Volkswagen Group, China has become its biggest sales market and with its two joint ventures, Shanghai Volkswagen (SH-VW) and FAW-Volkswagen (FAW-VW), Volkswagen Group China delivered over 2 million vehicles (including Hong Kong) in 2011. That corresponds to an increase of over 15 percent5 compared to the previous year, with a tendency to rise. [...]

[...] Currently, Volkswagen Group's retention index is below its American competitors20. In consequence, the Group will have to make more efforts in keeping up, especially to its main competitor General Motors, who shows outstanding results in customer retention. By implementing a customer focused strategy the Volkswagen Group utilizes its resource appropriately, potentially resulting in improved customer satisfaction and brand image. This will help to better the retention 19 20 Market Development and Outlook, Weimning Soh, 2011 Automotive Dealership in China: Accelerating Performance, KPMG, 2007 21 index, a particularly important index because a car is usually a planned purchase often influenced by previous experiences (brand loyalty) or recommendations (word-ofmouth). [...]