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Volkswagen (VW) Case Solution & Answer

Volkswagen (VW): Case Solution

Outsourcing should be properly evaluated as it saves in fixed overheads and most importantly, it improvesthequality and that the supplier should be properly evaluated.

Wastage and Advance Production Methods:

Wastage takes placein manual work, which is not a good sign for fixed cost of the company. Moreover, due to the storage of raw material or finished products, there has been a high storage cost which can be minimized through JIT (Just in Time Approach).

Volkswagen should do Process Automation, which indicates that manual tasks are automated, this usually leads to an improvement in speed, fewer errors, as well as the risk of automation is low as compared to manual process. Volkswagen should automate its manual tasks and if it works better for the company, then can be further improved through the use of latest technology, machines, and by focusing on continuous improvement of the business.

Competitor Analysis:

Volkswagen’s main competitor in the Automobile industry is Toyota. For Competitor Analysis, we have to analyze the SWOT of Toyota.

Strengths:     

  1. Innovative Culture
  2. High productivity and ranked # 1.
  3. Strong portfolio, therefore it is less risky.
  4. Leader in eco-friendly cars.

Weaknesses:

  1. Weak presence in emerging markets.
  2. China and India are emerging markets for theautomobile industry; there is a weak presence of Toyota in these countries.

Opportunities:    

1.Positive attitude towards ecological factors.

  1. Changing customers’ needs.
  2. Growth through acquisition, sinceToyota has successfully acquired many companies in the past.

Threats:

  1. Rising raw material prices, it is a huge threat to any company as thecosts have increased.
  2. Natural disasters.

Comparison between Volkswagen and Toyota:

 Volkswagen has a global presence, and it is the strength that Volkswagen is focusing on emerging economies such as China and India. Moreover Volkswagen has well-performing brands as well. The most significant difference between Toyota cars and Volkswagen is that Toyota cars are eco-friendly, especially since nowadays people want eco-friendly cars. Increasing raw material cost is a problem for both the companies, therefore it is recommended that Volkswagen should focus on its quality and eco-friendly cars to get the competitive advantage in the market.

Background of Automobile Industry Sector:

The automotive service industry is one of the most important economic sectors of the world because of huge revenues, however automotive industry does not include maintenance industry such as fuel shops and repair factories. The Automotive industry started in 1890; although steam-powered vehicles were produced earlier, the United States completely dominated the market till the mid of 20th century, and in the second half of the 20th-century, the European countries and Japan dominated the market…………………

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