Volkswagen Strategic Shift Analysis: Mini-Case Study Essay Example

such as Honda, Toyota, Mazda, Nissan and Ford. Despite this change, the Board continues to believe that extending the warranty period could demonstrate Volkswagen's confidence in their vehicle quality to their customers. They view this as a potential strategy for transforming a probable disadvantage into an advantageous opportunity.

By enhancing its image with regards to quality, Volkswagen could not only elevate public perception but also gain a competitive edge. The Board acknowledged the essence of customising their existing models to align well with the American way of life. However, they expressed reservations about the potential risk of "over-Americanizing" these models. They feared such a move could harm the brand and result in a net loss in their American market share. The Rabbit model and Routan minivan's history served as examples, as both models underwent significant damage post attempts at "Americanization".

The illustrations underscored a previous shortcoming of Volkswagen, where they misjudged the American market by attempting to sell a vehicle designed for European preferences. However, the Board was quite receptive to Volkswagen's strategy of focusing on the Latino demographic in the United States. Volkswagen's brand and car models have enjoyed considerable success in Latin America, which is one of their key strengths. The Board concurred that they could elevate their market presence in the U.S. by pursuing this Latino-centric approach within the country.

The Board had challenges in grasping the feasibility of attaining a goal to sell 800,000 vehicles annually in North America. The US car industry experienced a drop of 33% from 2007 to 2009, resulting in approximately 5.7 million less car sales each year. Predictions indicate that it might take several years for the US automobile

sector to recover to its pre-recession level of selling 16 million cars annually. Considering that Volkswagen managed to sell only 213,454 units in the US during 2009, the board deemed that meeting the target set for North America was both unlikely and unattainable.

The Board identified the need to adjust their marketing strategy for expanding demographics. They realized the necessity of not only aiming at the diminishing market but also focusing more on the burgeoning Asian markets along with the Latino market in the United States. The Board also pointed out the insufficient attention paid to Volkswagen's green technology in their Marketing Plan, one of their most substantial fortes. Volkswagen's endeavors to elevate efficiency have led to them creating the Polo, the globe's most fuel-efficient five-seater vehicle. The board underscored that this green technology is a draw for American clientele.

The firm has successfully capitalized on this in various global regions, and The Board profoundly believed that if the present Marketing Plan were to be carried out, the company would fail to emphasize a crucial element of its brand. A potential risk for Volkswagen might be Toyota's strategic reaction, possibly through price reduction. However, considering the quality issues that Toyota had in the recent year, it might not be feasible for them to decrease their prices as it would likely lead to the perception of inferior quality. In fact, their priority should be to rectify these quality issues to meet their customer expectations.

Toyota must take steps to preserve its reputation as an honest, transparent, and accountable auto manufacturer, effectively handling recalls and customer quality issues. Maintaining the loyalty of their existing customers is crucial for Toyota amidst

recent challenges. Simultaneously, it needs to devise strategies to reduce prices without negatively impacting public perception further. Expanding and securing their market share in burgeoning Asian markets should also be a priority for Toyota.