Volkswagen Strategic Management - Case Study Example

VW group have 8 automobile brands with 44 vehicle and component production plants in European countries as well as in six countries in America; Asia & Africa. Sales operations spread around 150 countries across the globe. The group has eight major brands of vehicles namely Volkswagen passenger cars, Audi, Bentley, Bugatti, Lamborghini SEAT, Skoda and Volkswagen commercial Vehicles- each deal autonomously with their own vehicle business includes development and production to marketing & servicing (Accessed from the website www.

volkswagen.com). 1. As part of the corporate governance and strategic management, VW group has adopted various strategic choices. Strategic fit is developing strategy by identifying opportunities in the business environment and adopting resources and competences to take advantage of these (Porter, 1980). Strategic choices are concerned with decisions about an organization's future and the way in which it needs to respond to the market pressure and influences. At different level of organization, executives are faced with choices as to how to meet the expectations of stakeholders' whilst satisfying the needs and expectation of the users, often-in competition with other organizations.

Hannan & Freeman (1977) suggest that as organizations, adaptor of a particular environment they become less flexible. Organization's choices are constrained not only by an explicit cultural dimension in the sense of what we believe around here but also by what skills and resources are available and in what context those skills and resources become valuable. Prahalad & Bettis (1986) argue that organizations have dominant logics and that these logics are based on the mental maps developed in the organizations core business.

Michel Porter's (1985) five forces strategies low cost strategies and strategic choices are some of the strategies have been adopted for competitive advantages for the organizations. Campbell-Hunt (2000) suggests that differentiation can take on number of forms based on marketing variables, sales variables, quality reputation variable and product innovation variables. Sustainable competitive advantage depends on companies being able to develop and protect resource advantages by focusing on particular market position.

Finally, organization's ability to succeed in a business arena depends on is ability to develop a market position that is supported by appropriate assets and capabilities. Strategic choices include corporate strategy, Business or competitive strategy and directions and methods of development. Corporate level strategy (Andrews, 1987) is concerned with the overall purpose and scope of an organization and how value will be added to different parts of (business units) the organizations. Corporate level strategy includes portfolio decisions extent of diversity and management and control of subsidiaries.

The second level can be thought of in terms of business unit strategy (Hall, 1978) which is about how to complete successfully in particular markets. Business strategy includes sustainability, competitive advantages competitive strategy and strategies in hyper-competitive conditions. Finally, the directions and methods of development include market development, product development, diversification, acquisitions alliances as well as critical success criteria. It also includes the concept of suitability, acceptability and