Volkswagen as an Entrepreneurship, Value Proposition, and Problems Faced by Company - Case Study Example

Business Name Institution Affiliation Entrepreneurship Entrepreneurship is the process of identifying, designing, launching and running a new business, which naturally begins just as a small company which offers a certain product or process a certain good for hire and sale. Individuals who are responsible for these actions are referred to as entrepreneurs. Volkswagen as an Entrepreneurship Volkswagen was founded in Berlin on 28th May in the year 1937 as a limited company for preparing the Germans peoples car. The main purpose of the company was to manufacture the Volkswagen car originally known as the Porsche. The Volkswagen Company has its headquarters in Wolfsburg, it started as a small company but with time it grew into the world’s leading manufacturer of commercial vehicles and automobiles in Germany. It is also the largest company that deals with car making in Europe (Schaltegger & Wagner, 2011). Problems Faced by Volkswagen Company Just like any other company dealing with a certain product in a particular locality, Volkswagen has gone through various major problems that it actually had to address for it to be able to survive in the car manufacturing industry, To begin with this company has been accused by the environmental protection agency of amending software on the three litre engines for diesel which are fitted for the VW models and the Porsche, these modifications causes high carbon dioxide emissions which can in turn affect around 800000 vehicles in Europe including vehicles which uses petrol. The collapse of Lehman Brothers brought about the largest bankruptcy for financial institutions ever which triggered the major financial crisis for various companies, this was another problem faced by the Volkswagen Company Oil spillage is another enormous problem encountered by the Volkswagen Company, which was addressed in many cases by the environmental protection agency. This issue led to a huge deterioration in the progress of the company. The nature of the Volkswagen scandal and the extent of its impacts brought about different difficult questions for those seeking assurance and justice that something similar will never happen again. This was another great problem faced by the Volkswagen Company Another problem is the inability of the company to convince its customers that the new technology of diesel will cater as a solution to make the most of fuel economy and performance as well as be able to protect the environment from any form of pollution compared to the previous one. Value Preposition by Volkswagen A statement that clearly identifies measurable, clear and demonstrable benefits that consumers tend to get when purchasing a particular good or service is referred to as value preposition Below is the value preposition by the Volkswagen company that is significant to the company, in terms of helping it out do its competitors and aid it make a lot of sales compared to the other companies of the same services and products in the same market. Value prepositions should be designed in a way that will enable it be able to convince its potential customers that its particular product or services are the best than the others that are available in the market. When this preposition is effective it can lead to a competitive advantage since consumers will choose that particular service or products and leave the rest Sales and Marketing The Volkswagen company has a very unique product range, the Volkswagen products is made up of twelve positive brands that have been highly embraced by millions of clients all over the world . In the year 2012 the company steadily reinforced the miscellaneous and the individual image of the various brands. This role played a big part in optimizing the brand position in the competitive market. Brand Diversity The Volkswagen company unites its three major messages that helps in distinguishing the Volkswagen passengers cars brand from other brands of vehicles since they are innovative, of quality and gives service of high quality to its customers while remaining affordable to its customers This is the competitive advantage of the Volkswagen Company, the company is also aiming to become the most innovative biggest manufacturer with the finest quality in each class for the longest period of time in the passengers’ car sector. Customers’ Satisfaction and Loyalty The sales activities of the Volkswagen Company is specialised to make their customers more satisfied, this is the main priority of the company. To increase the ability of satisfying the customer’s needs, Volkswagen has increased its services in the after-sales area For a company to gain the customers loyalty it first must be able to satisfy them in each area fully. Therefore the Volkswagen Company has been able to gain full loyalty from its customers by being able to offer products of their taste. For instance the Volkswagen passengers brand has been able to maintain high level of loyalty from its clients for a long period in the Europe market/ The Structure of Group Sales The brands in Volkswagen are all independent; this has been given back up by the company’s group multi-brand structure. Moreover the company is also focusing on sales activities which are cross brand so as to be able to increase its market share and volume of sales and also raise earning contributions and be also to decrease the cost incurred at the same time To increase the exchange of ideas and information among the Volkswagen Company and other dealers, Volkswagen has ventured into the IT system environment which has enhanced the distribution of network among various diverse dealers. Expansion of Fleet Customer Business The Volkswagen Company is characterised by having a long duration relationships with its fleet customers, this has acted as a guarantee for a more stable sales of vehicles than the private customers The extensive offering of products has enabled Volkswagen company to satisfy custom needs from a single source, this is due to the fact that Volkswagen has a big business for fleet customers that is based in Germany and the minor business being based in Europe. Efficient Management One of the Volkswagen strategy as from 2018 is to focus on providing professional management for its already used cars, businesses of used cars mainly offers a long term support to businesses of new cars with an intension of increasing the profit rate and also increasing the sales volume In order to control the rising complexity of businesses dealing with used cars and be able to flexibly react on the new markets development, Volkswagen has introduced a standardised and a co-ordinated IT system and processes for the business dealing with used cars. The Volkswagen Team The Volkswagen Company has strong, committed and reliable sales staffs that have a long year experience in satisfying the customers’ needs The Volkswagen Company also have a management group which comprises of nine members. Each particular member has an important role to play within the company for its efficient running. The work of the board of management is supported by other boards of the region and brand as well as other holdings and other group business for its smooth functioning. It. The Volkswagen Company is chaired by Matthias Muller There is also a supervisory board which is also responsible in approving and managing the essential corporate decisions All these teams are in place to ensure that the Volkswagen company is running effectively and it is offering products of good quality that satisfy their customers’ needs hence acting as a bridge towards gaining loyalty of its customers and also achieving its objective of realising profits by out doing the available competitors in the market. Sources of Finance Just like other companies, Volkswagen needs various sources to fund its day to day activity; to begin with the main source of funds for this company is buying selling its debt securities referred to as the COs in the capital market. The issuance of debt is governed by the finance agency’s regulations and it also responsible in authorising the company to issue its COs through the office of finance. The major liability of the issued COs is to provide funds for a particular brand Another source of funding is from investments described in the bank act, which includes securities that a trust fund may hire under the laws which govern it. Mortgages that are insured and have commitment or guarantee from a particular agency of the United States or the United States itself also act as a source of funding the Volkswagen Company Loan stock being a long term debt capital that is raised by a company of which a certain amount of interest is paid unto it acts as a another source of getting finance for the company Volkswagen Company has its retained earnings just like any other business, this retained earnings has an impact on the amount of dividends. The profit gained from the retained earnings is also used in funding the company. Borrowing from banks is another essential source of financing for various Companies; bank landing can either be short term or long term. The short term lending may be informed of short term loans or overdrafts. Another sources of finance is from the government assistance, the government may provide finance to companies in cash grants or other forms of direct assistance Volkswagen Company has also been able to get finances for its funding through hire purchase. It tends to sell its products in instalments; in this case the company remains the owner of the product until the last instalment is made the product ownership shifts to the customer Stakeholder Analysis A stakeholder analysis is a technique responsible in facilitating institutional and reform policies by accounting for the needs of those who have an interest in the reforms in considerations Company Ethics An area of analysis in the Volkswagen Company is the business ethics, this ethics are the organizational policies and culture of the company. It should focus on implementing the ethics and policies of an organisation. . The effective application of compliance policies and ethics in the company will play a role in preventing unusual behaviours in the company. Communication Another area of analysis is the crisis communication, since September 2015 Volkswagen has been under public inspection, this is due to the scandal it had been linked with, therefore the analysis dealing with corporate communication should be legitimate to cover a company when it is threatened by the results of a public scandal Corporate Governance Volkswagen is a one of the publicly listed companies and it has its headquarters in Germany with a system of corporate governance which involves employees’ participation. The key shareholders of this company are the founder Ferdinand Porsche, federal state of Lower-Saxony and lastly the Qatar state. Therefore the governance and solution to corporate governance is through employing a representative workforce and strong stakeholders The Stakeholder Management The stakeholder management designs aims that are responsible in creating value for all the stakeholders and assists in making all the relevant interests of the stakeholders to be put into account. For the Volkswagen, it offers possibility to learn urgency and dynamics of the diverse stakeholders’ claims. Legitimacy and Reputation The strategies of legitimation aim at defending and repairing the incident that has led to the loss of legitimacy. On this case the Volkswagen company analysis will provide a practical insight into the efficient use of such legitimacy more especially when comparing various institutional pressures with the environment. Industry and Technology How a company reacts to effects brought by scandals and threat to legitimacy depends on the environment in which the company operates. The scandal in Volkswagen allows other many scandals to compare reactions in other institutional settings; therefore there must be investigation objects like Renault the French car maker. Media Coverage The coverage of the scandal by the media can also be studied from diverse angles. This is when the scandal concerns a multinational organisation that is in various countries with diverse levels of participation as a major buyer, competitor, employee or manufacturers. This is evident in the Volkswagen Company which is the major manufacturer of vehicles in different countries having its headquarters based in Germany. Reference Schaltegger, S., & Wagner, M. (2011). Sustainable entrepreneurship and sustainability innovation: categories and interactions. Business strategy and the environment, 20(4), 222-237. Read More