Strategic Gap Analysis Of Volkswagen: An Overview

Overview of Volkswagen

The report helps in the overall strategic gap and analysis of Volkswagen Motors wherein the operational policies, operational criteria which are inclusive of the products and services, pricing and value, communications, distribution channels, strategic positioning along with product life cycle is required to be identified in an effective manner. The strategic gap analysis has been done in order to analyse the overall effectiveness of the company in an appropriate manner.

Volkswagen is one of the German automakers which was founded in the year 1937 and the headquarter of the company is situated in Wolfsburg. The number of employees working in the organization is 117400 and the net income which was earned by the organization €4.353 billion and the areas served by the organization is worldwide. The revenue which has been earned by the organization till the year 2017 is €76.729 billion and the products manufactured by the organizations are vans along with the automobiles.

Strategic Intent

The strategic intent is defined as the compelling vision statement that discusses the different aspects which are required to be achieved by them in the long-term. In launching the future program of 2025, Volkswagen has tried in kicking off the largest process in the entire history and the overreaching ambition of the company is to become the world’s leading provider of the sustainable mobility in terms of the different cars along with the services provided by them. The entire path will be dominated with the harmonious kind of coexistence and this will be achieved by them till the year 2025 (Autoblog.com. 2018).

Strategic reality

In the present scenario, this can be seen and analysed that due to the emission scandal of Volkswagen, this has affected the main umbrella brand thoroughly. There were more than 3 million cars which were returned to the organization and this affected their brand image in a negative manner as there was lack of trust among the customers (CleanTechnica.com 2018). Furthermore, there is weak positioning in the Indian market as Maruti and Hyundai have excellent strong sales figure and Volkswagen is not able to compete with them in an effective manner (Greentechmedia.com. 2018).

However, on the other hand, the strong brand recognition of Volkswagen is the present strategic reality of the organization in the entire market wherein they are handling production of more than 27000 cars in a single day with proper logistics along with supply chain (Ford Talks Progress. 2018).

Strategic gaps

The changing laws related to emission is hurting Volkswagen in a negative manner as the customers in the market feel that Volkswagen will be indulging in different kinds of illegal aspects instead of following the emission standards. The major strategic gap in Volkswagen is the other existing and the new competitors in the market which can invent similar kinds of cars in the market and this can prove to be dangerous for Volkswagen in a negative manner (Forbes.com. 2018).

The strategic intent of Volkswagen is to be competitive in nature in terms of pricing and value without compromising on the quality and the company needs to focus mainly on the quality of the cars and the services which are provided by them to their customers in the market in order to avoid the current allegations which are against them (Investor 2018).

The strategic reality of the Volkswagen Company is that the company uses the premium pricing policy which only caters to the needs of the niche group of customers in the entire market (Machinery.co.uk. 2018). The spares of the cars are expensive in nature and this is not affordable by the other group of customers in the market which is one of the major shortfalls which is being faced by the company Volkswagen in comparison to the other competitors in the entire competitive market namely Toyota which are selling various cars of different ranges and this is affordable by the different group of individuals (Robson 2015).

The customer base is required to be widened in nature with proper effort as the premium priced cars are being afforded by the high net-worth customers in the market. The after-sales service is required to be taken care of by the company in case of any kinds of discrepancies. The geography regions are required to be widened as well which will be helpful in nature in managing the change in an efficient manner (Seekingalpha.com. 2018).  

Selling: Strategic Intent

In case of the selling, proper adoption of the direct along with personal selling, this will be beneficial for the gaining of sustainability. The sales representative should meet the client in person in order to become more successful in selling their products to the customers and there will be customer satisfaction as well (Volkswagen.com 2018).

As per the strategic reality, this can be seen that Volkswagen is mainly concentrating on the pricing technique and attract customers through proper advertising in different social media channels wherein it can be seen that there are some portion of the society who are not so involved in the social networking. This is the strategic reality and this kind of selling is attracting niche group of customers (Volkswagen.com 2018).

The major strategic gap in the respective aspect is relating to the advertising technique wherein the positioning is not correct and this has affected the overall efficiency of the company in a negative manner. Volkswagen needs to focus on the different group of customers which will be beneficial for the overall society and this will help them in gaining competitive advantage (Di Benedetto et al. 2018).

Strategic Intent

Volkswagen needs to analyze the percentage of the different customers who are focusing mainly on the social media channels in order to check out the different deals which the company is offering to the customers. The coverage of sales plays a major role in managing the different sales and profitability of the company (Providencejournal.com.  2018).

The strategic reality of Volkswagen is that the company is not using the customer business solutions and this has affected the sales and profitability of the organization in a negative manner. The sales coverage is mainly less in nature in terms of the competition in the market and this is affecting the overall sales of the company negatively as well (Volkswagen.com 2018).

Strategic gaps

The strategic gap is related to the market coverage wherein this can be seen that the company is not successful in their advertising of the different products and services which are being provided to the customers (Conwaydailysun.com. 2018).

Strategic Intent

The strategic intent of Volkswagen is different training events along with promotional activities which will be beneficial for the success of the firm. The industry based promotion will be beneficial for the overall success of the firm in a proper manner.

Volkswagen is forceful with the different ad campaigns and this is attracting a specific group of customers in the entire market. It has been seen that Volkswagen uses the aggressive social media networking which attracts the customers and this deprives the other group of individuals in a negative manner.

The strategic gap is the coverage of the market is less in comparison to the other competitors in the market which is Toyota in the market. The sales coverage of the company is required to be analyzed in such a manner which will be helpful for Volkswagen in attracting a more percentage of the customers in the market effectively as well (Volkswagen.com 2018).

The distribution can be essentially described as the manner in which the products of the Volkswagen reaches out to the different customers at large and the channels which the firm prefers to adopt in order to sell its product in the external market.

Channels

Strategic Intent

Volkswagen is currently aiming to ensure that it is able to increase the different channels to which it has access to and increase its own outlets and see to it that these outlets are using artificial technology to ensure success.

The channels as used by Volkswagen are majorly the distribution through the direct channels whereby the firm has a production facility in the countries of its choice as well along with making use of the indirect channel which means that many of its cars are available through different dealers as well. The direct channel serves to be more popular than the indirect channel as there exists no involvement of the middlemen and this means a larger share of profit for the company.

The gap is that at present exists is that the channels are more indirect in nature and this needs to be improved at large.

Services

The company aims to introduce artificial intelligence in their different services which will ensure that there will exist less errors and thereby ensure better services.

The company also provides a large number of services to the company which thereby assist it in ensuring that the customers are able to drive their cars successfully without facing any problems (Automotivelogistics.media 2018). There are various dealerships of the company around the globe which help in attaining success. The company makes use of a Group Logistics service which then makes the dealer network stronger and helps the company in providing first class service.

The gap which exists in this case is that there have been many complaints against the service as provided by the firm at large and this aspect needs to be improved.

The strategic positioning can be rightfully stated to be the current standing of the organization at large and thereby assists in understanding the placement of the firm at large.

Operational Criteria: Communications

Strategic Intent

The company aims to improve the customer satisfaction index which will thereby ensure that the firm is successfully able to generate larger sales in the company.

Strategic reality

The customer satisfaction can be stated to be an aspect which is widely popular in the country and in lieu of this the firm will be able to ensure that it is able to gain a larger number of customers (Automotivelogistics.media 2018). The Volkswagen makes use of a platform named Mopinion, whereby it takes into consideration the feedback of the different customers and thereby sees to it that the customers are satisfied with the services of the firm.

The strategic gap which exists is that at present the customers are quite happy with the services of the firm but there exists considerably scope for improvement.

Figure : The Product Life Cycle Stages

(Automotivelogistics.media 2018)

The company aims to increase their current growth rate so as to ensure that they are able to last longer in the market and engage in considerable competition.

At present, Volkswagen can be stated to be in the Maturity stage of the Product Life Cycle. The company has been in existence since the last 80 years and experienced huge growth in the year 1970-2000s. At present it can be stated to be in the Maturity stage whereby the growth rate of the company has stabilised over the time (Volkswagenag.com 2018).  With respect to this, the company, needs to adopt adequate strategies which shall ensure that its growth sustains.

At present the growth rate of the company has slowed down considerably and hence, with respect to this the company aims to ensure that the growth rate of the company is worked upon and improved (Automotivelogistics.media 2018).

Strategic Intent

The Volkswagen aims to ensure that the firm is successfully able to engage in competition with the different companies and change their design which will allow the firm to succeed in the future.

As the automobile industry in which the firm operates is highly competitive in nature, Volkswagen ensures that it is able to engage in considerable differentiation with the help of which it will be able to ensure that it is successfully able to make a good positioning statement in the market. In this aspect, Volkswagen differentiates from the other companies by engaging in quality (Hbr.org 2018). Volkswagen offers one of the best cars with the ultimate design and quality which lasts long and thereby fulfils the needs of the purchaser.

The firm faces considerable competition from the various companies but it has an aim to ensure that it is able to engage in design differentiation and ensure that the strategic gap is overcome.

Conclusion

Therefore, this can be concluded that proper strategic gap and overall strategic analysis have been conducted for Volkswagen which has helped the companies in managing their effectiveness in the entire market. The strategic intent has been analysed that has played a major role in gaining competitive advantage in the overall competitive scenario. Volkswagen is one of the biggest companies which have different brands such as Audi, Lamborghini, SEAT and Skoda.

The strategic positioning has helped the company in gaining competitive differentiation and the strategic positioning of the company in the market has been successful in nature in promoting their brand. On the other hand, this has been noticed that there have been different issues relating to the violation of the laws due to emission and this has caused negative impact on the brand image of the company. The competition in the market has been creating negative impact on the brand image and this can be reduced with proper implementation of the different strategies which is inclusive of increasing the distribution channels effectively and appropriately. From the above, this can be seen that the strategic intent, reality and the gaps have been discussed which provided a major view on the different strategies effectively as well.

References

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