The Sustainable Competitive Advantage of Volkswagen
Rugraff (1) stated that the global automobile industry has been suffering from unsteady competitive advantage for the last three decades due to changing the choice of the customers, market rivalry, outsourcing technological development, a new division of labor and increasing oligopolies nature of global component suppliers that generated new business opportunity and welcomed new entries.
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As a result, the automobile industry players looked for their competitive advantages on environmentally friendly technology and their internationalization through intensive investment in abroad while Volkswagen explored its competitive advantages through its expansion in the emerging market with 53% foreign employment and 76% of its revenue generated from foreign sales.
According to the Volkswagen Group (7) the company’s green mobility, eco-friendly production processes, continuous effort to develop resource efficiency, 62 production facilities all over the world, characteristic global labor relations including its brand image and prolonged culture have provided the company with stability and a clear competitive advantage than its competitors.
The company added that the appropriate utilization of competitive advantages provided the company huge opportunity to uphold its ecological principles, brand image, introduction of attractive vehicle models with low emissions targets, strong position in the global market, low fuel consumption, responds to the customers needs, and to fulfill the cost target of the regional customers.
Das Auto (3) added that German-engineering, strong resale values, fuel-efficiency safety, clean technology, carefree maintenance program covered by the total cost of ownership have generated further competitive advantages that provided the customer excellence, operational excellence for all brands, product-excellence with a variety of models, location excellence through local distributors and the customers identified it as a symbol of their dignity.
Growth Strategies of Volkswagen
Volkswagen Group (11) added that its growth strategy has based on gorgeous vehicles that plead the customers all over the world meeting different regional requirements linked with their cost targets through it innovation, quick implication, and improved efficiency with huge brands that facilitated the company at an unparalleled position in the global market.
Here the paper analyzed its growth strategies.
Market Penetration Strategy
Wen (52) pointed out that the market penetration strategy of Volkswagen Group has organized with three different modes, such as, Acquisition and Greenfield, Joint Ventures & Strategic Alliances with the local companies and Foreign Direct Investment in the emerging markets and the company has long evidence to practice all three strategies where they feel appropriate.
At present, the company holds at least seven famous brands and all of the brands have experienced successful acquisition Volkswagen starting from 1964 to 1998, later on, the company has taken cautious measures for further investment and condensed its acquisition activities shifting to the foreign direct investment and strategic alliances through the joint venture.
Market Development Strategy
The Times of India (1) reported that the global giant of Automobile manufacturers Volkswagen is a multinational carmaker in Europe has aimed to turn itself at the top of all automaker by 2018, through its market development strategy to address such challenges.
The marketing team of Volkswagen has focused on the further innovative approach of market development through communications and advertising to all prospective markets.
For instance, Volkswagen in India has introduced itself as a landmark automaker by its digitalized marketing campaign and introduced first talking newspaper using light-sensitive chips, while the readers turned the pages of the newspaper that readers regarding the products of Volkswagen, such digitalization has provided the company huge brand awareness measured at 38% to connect with customers.
Product Development Strategy
The Alternative Mobility Department of the Volkswagen Group has engaged to develop the conceptual framework for strategic product development keeping its close observation to the international and regional market integrating with new technologies, research, market trend and competitors analysis that brings future success by meeting customers demand while the product diversification strategy acts as an integral part of this strategy.
Das Auto. Volkswagen of America Corporate Fleet Sales. 2010. Web.
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Rugraff, Eric. The new competitive advantage of automobile manufacturers. 2011. Web.
The Times of India. Marketing Solutions: Volkswagen India Case Study. 2011. Web.
Volkswagen Group. Sustainability Report 2010. Web.
Wen, XiaoFeng. The Investigation of Volkswagen’s Entry Strategy in China’s Car Market. 2007. Web..