Volkswagen Strategic Management and Business Strategy - Case Study Example

?Business Strategy The value proposition for the company is to convert dreamers into s for the company and then holding onto these s.Volkswagen has introduced the concept of ‘Ride free’ whereby prospective dreamers of the Volkswagen brand are provided free ride which enforces the feeling and desire to own one someday (Corporate level strategies, 2007). The work is to realize the dreamers and target them efficiently. The top bracket executives of the company has realized this and used the consumer sentiments to company’s advantage. Giving consumer the feel of the original product actually reinforces the desire among the consumer or the customer to own the product. This is the strategy initiative taken by the company Volkswagen to target customers (Global Strategy for Volswagen, 2010). The company has historically based the organization on the basis of differentiation as its strategy. They bought a same product in differentiated form for niche audience. After the global economic crisis company has started focusing on cost leadership so that they can provide customer with the same product at a better price. This is done keeping in mind the economic scenario across the globe. Analysts have considered this to be a move whereby company will hamper its brand image which is company’s biggest asset. The management of the company believes they are not playing with the brand image they are just focusing on streamlining some costs so that they can focus the saved money on enhancing brand image and various other promotional activities for the brand Volkswagen (Volswagen Strategies, n.d.). Brand image is the biggest asset for the company and has created what Volkswagen is today. For any normal car buyer Volkswagen is not into the consideration state. The company’s biggest strength is its brand image which it has created by forming an emotional bonding with the youth of the world. Customers of Volkswagen are brand loyal because of the perceived image of the brand. It is the emotional bonding and association with the brand which results in repeat sales from the customers. This is why relationship marketing becomes so important for Volkswagen. The whole framework of the company is based on relationship marketing (Alkhafaji, 1995). Right Relationship with right Customers-Brand Image The objective at Volkswagen has always been on having right relationship with right customer segment. They have assured this over the long run by keeping right people and using right marketing and relationship management techniques over the long run. The world knows Volkswagen as a brand which not all people can associate with and this is done over the years by connecting with the youth of America (Corporate level strategies, 2007). There target advertisements and strategy has always focused on American youth and its dynamism. The company’s biggest strength is its brand image which it has created by forming an emotional bonding with the youth of the world. Customers of Volkswagen are brand loyal because of the perceived image of the brand. It is the emotional bonding and association with the brand which results in repeat sales from the customers. This is why relationship marketing becomes so important for Volkswagen. The whole framework of the company is based on relationship marketing. Volkswagen Strategic Management Volkswagen is known for creating a stream of customers who are an elite bunch of people and have their own level of desire for car. The main objective of Volkswagen has been to maintain the brand image in the eye of the consumer so that the customers don’t ever feel the image to be diluted. It is the experience that the customer goes through makes the bond special. Company has integrated its supply chain so well that consumers gets to interact directly with the suppliers and get the car as per his requirements (Global Strategy for Volswagen, 2010). It creates a long term bond towards the company from the customer side. This is the single most important strategy adopted by Volkswagen to create successful relationship marketing with the customer. It makes the customer loyal towards the brand. Marketing personnel’s of the company are very well trained so that they can understand the actual needs and want of the customer, and assure the desired output from the supply side of the company (Strategy Level, 2009). It is said that the company does not only sell car but they sell a complete ownership experience. This is possible only because of the employees of the company. The advertising strategy of the company has focused on showing how the car belongs to elite class and not everyone is made for the product. Customers perceive that the product is made for them and it is the actual fit in their personality trait. It is nearly impossible to describe a Volkswagen car buyer. It ranges from high class executive to a blue collared worker of an organization. It is the breed which is apart from normal car buyer. Long term association with the customer is also supported by having Volkswagen communities and clubs. These clubs helps creating a sense of belonging among the customers. The company has historically based the organization on the basis of differentiation as its strategy. They bought a same product in differentiated form for niche audience. After the global economic crisis company has started focusing on cost leadership so that they can provide customer with the same product at a better price. This is done keeping in mind the economic scenario across the globe (Alkhafaji, 1995). Analysts have considered this to be a move whereby company will hamper its brand image which is company’s biggest asset. The management of the company believes they are not playing with the brand image they are just focusing on streamlining some costs so that they can focus the saved money on enhancing brand image and various other promotional activities for the brand Volkswagen (Startegic Management at Volswagen, 2011). Volkswagen is known for creating a stream of customers who are an elite bunch of people and have their own level of desire for car. The main objective of Volkswagen has been to maintain the brand image in the eye of the consumer so that the customers don’t ever feel the image to be diluted. It is the experience that the customer goes through makes the bond special. Company has integrated its supply chain so well that consumers gets to interact directly with the suppliers and get the car as per his requirements. It creates a long term bond towards the company from the customer side (Volswagen Strategies, n.d.). This is the single most important strategy adopted by Volkswagen to create successful relationship marketing with the customer. It makes the customer loyal towards the brand. References: (n.d.). Retrieved Mar 17th, 2011, from Customer Relationship MAnagement: http://www.customerthink.com/forum/to_delight_customers_requires_an_appropriate (n.d.). Retrieved Mar 17th, 2011, from More is not value Proposition: http://sinekpartners.typepad.com/refocus/2009/01/more-is-not-a-value-proposition.html Alkhafaji, A. F. (1995). Competitive Global Management. Prentice Hall. Auction site. (n.d.). Retrieved MAr 17th, 2011, from Harley Davidson Value: http://harleyauctionsite.com/Harley-Davidson-Value Corporate level strategies. (2007). Retrieved Mar 23, 2011, from www.corporatelevelstrategy.org: http://www.corporatelevelstrategy.org/books-on-corporate-strategy/ Global Strategy for Volswagen. (2010). Retrieved Mar 24, 2011, from en.reingex.com: http://en.reingex.com/en115volks.asp Impact Factory. (2010, Feb 2nd). Retrieved mar 17th, 2011, from http://www.impactfactory.com/p/customer_relations_skills_training/snacks_1715-2103-64508.html Startegic Management at Volswagen. (2011, Mar). Retrieved Mar 23, 2011, from www.volkswagenag.com: http://www.volkswagenag.com/vwag/vwcorp/content/en/innovation/fuel_and_propulsion/strategy.html Strategy Level. (2009). Retrieved Mar 24, 2011, from www.referenceforbusiness.com: http://www.referenceforbusiness.com/management/Sc-Str/Strategy-Levels.html Volswagen Strategies. (n.d.). Retrieved Mar 24, 2011, from wehner.tamu.edu: http://wehner.tamu.edu/mgmt.www/NAFTA/spring98/Groups/03/Assignment3.htm Read More