In the decades conservation and sustainability has become a great concern for most of the countries. Global warming and its repercussions for human kind has been a topic impossible to avoid, people has finally realized that our natural resources may have an expiration day and we are responsible for it.
In an attempt to protect the environment since 1970s EPA has announces continuously more restrictions on emissions produced by vehicles with special attention on the amount of nitrogen oxide emitted by vehicles reducing permitted emissions from 1.25 to 0.07 grams per mile. Emitted nitrogen oxide endangers human life and triggers deceases as asthma, respiratory, cardiovascular, bronchitis, and pre-mature death (Mansouri N., 2016).
Surprisingly, in 2015, Volkswagen was announce to have been rigging emission test to make diesel vehicles seem emitting less pollution than what they really emit (Mansouri, 2016). As result of the scandal the company has spent billions on fines and recalls of affected vehicles no to mention the damage to their image and the fall in sells follow by the criticism of customers who have lose faith in the company.
What is Volkswagen’s Strategy 2018 originally announced in 2008? During 2008 announcement about their Strategy 2018, Volkswagen’s strategy was to “become the most successful, fascinating and sustainable automobile manufacturer” (Volkswagen, 2019, p. 9). 2018 Strategy clearly shows company purpose, what it wanted to accomplished and how was planning to do it. In Volkswagen’s mission statement we can see the purpose and aspirations of the company, what they seek to accomplish and the way they planned to do it (The University of Minnesota, 2010). List the Key elements of Volkswagen’s Strategy 2018 (Volkswagen, 2019, p. 10)
- Increase market share
- Increase productivity (as measured via return on sales)
- Become a top employer in order to build a first-class team.
A strategic plan gives you goals to focus on, helps to direct energy and guide staff toward a shared goal, and empowers employees to be more effective. Volkswagen’s strategy elements give a better idea of how they plan to provide valued to its customers, and why they should choose them over the competition (dummies, n.d.).
In order to execute Strategy 2025 (which supersedes Strategy 2018) in response to an emissions scandal, what was suggested in the article and why was it suggested? The article suggesting cutting costs in the upcoming years will be crucial for Volkswagen to execute its new Strategy 2025. CEO Mueller has suggested significantly reducing the number of models it makes and reducing almost $9 billion in annual spending that resulted from the $18 billion plus bill to cover the costs associated with the emissions scandal (Volkswagen, 2019, p. 10).
Volkswagen has segmented its customers by a mix of demographic, psychographic, geographic variables to supply to the needs of existing customers as well as emerging economies. The company operates 12 independent brands design for each one of its segmented markets (Marketing91, 2017). The new strategy will need funds to be executed and basically reducing the number of models will help to fund 2025 strategy.
What is the overarching vision driving Volkswagen’s Strategy 2025? The overarching vision driving this new strategy is to become a world-leading provider of sustainable mobility (Volkswagen, 2019, p. 10). The name of their strategy for 2025 is “Shaping mobility for generations to come”. The goal for this new strategy is to become a word-leading provider of sustainable mobility. They planned to work on electric drive, digital networking and autonomous driving, focusing in making the automobile clean, quiet, intelligent and safe. (Volkswagen, n.d.). They are trying to regain customers’ trust by engaging in producing a more ecological mobility at an affordable price.
Looking to sell a more “environmentally friendly” image in an effort to overpass the emissions scandal and recover brand credibility. In their strategy they remind us about climate change and the challenge this may represent for humankind and how important is to stop global warming for all us, they claimed themselves as part of solution in preventing ecological disaster, trying to engage customer’s attention in global warming so they forget about emissions scandal.
With the new strategy they take environmental responsibility and offered themselves to guide our way to a more ecological society in an effort to preserve the planet for future generations. The company cited as its highest principles; integrity, the observance of rules and laws, the safety of customers and dealing with errors in order to remedy and avoid them in the future (Volkswagen, n.d.). List from the article the initiatives designed to transform certain areas of Volkswagen’s core business, outlined in their strategy 2025 (Volkswagen, 2019, p. 26)
- Sharpen positioning of brands
- Vehicle and drivetrain portfolio
- Streamline modular architectures
- Partnerships in the economy segment
- Self-driving system and artificial intelligence
- Battery technology as a core competency
- Best-in-class user experience
- Implement model line organization
Core business is set of functions, processes and capabilities that produce most of the value created by a firm. Ideally, a business will devote most of its resources and creative energy on core business. Core values are the guiding principles that help to define how the company should behave in business and perhaps beyond (simplecable, n.d.).