In the present competitive business world, it is important for organisations to use the available ideas and strategies to achieve their goals financially. For this, companies all over the world conduct brand audit analysis which helps to know the current status of the company in the market. It manages to provide the strengths and weaknesses in order to build up strategies for the future. Following Toyota, Volkswagen is the second largest automaker in the world. This report will focus on the brand audit analysis which will evaluate the external and internal situation along with strategic and tactical recommendations for Volkswagen, the German automaker which is globally superior for its performance and innovation.
Table of Contents
Introduction
Executive Summary
External Brand Audit
Macro Analysis
Political
Economic
Social
Technological
Legal
Environmental
Consumer Analysis
Demographics
Behavioural Segmentation
Geographical Segmentation
Competitor Analysis
Internal Brand Audit
Financial Review
Brand Strategy
SWOT Analysis
Strategic Key Challenges
Recommendations
Brand Plan
Conclusion
References
Introduction
In the present competitive business world, it is important for organisations to use the available ideas and strategies to achieve their goals financially. For this, companies all over the world conduct brand audit analysis which helps to know the current status of the company in the market. It manages to provide the strengths and weaknesses in order to build apt strategies for the future. Following Toyota, Volkswagen is the second largest automaker in the world. This report will focus on the brand audit analysis which will evaluate the external and internal situation along with strategic and tactical recommendations for Volkswagen, the German automaker which is globally superior for its performance and innovation.
Executive Summary
According to Jerevicius (2013), the German automaker VW was established in the year 1937 by the government of Germany with its headquarters in Wolfsburg to produce people’s car with low cost at a mass and rapid rate. Forbes (2016) mentions that the enduring top selling cars of VW include the Golf models and Jetta. VW Beetle cars were manufactured with rear engine design and VW also launched more models with modern and improved mechanism which attracted the people of younger generation.
Volkswagen group functions 125 production plants in 20 European countries and an additional 11 countries in America, Asia and Africa (Portrait and Production Plants). There is a total of 153 countries in which VW sells its vehicles (Volkswagen 2015). Many employees of Volkswagen worldwide produce vehicles, or work in vehicle related service fields. According to Forbes (2015), VW has brought forth a net income of $268.55 billion US dollars and a market capitalisation of $126 billion US dollars in the year 2015.
External Brand Audit
Macro Analysis
– To analyse the current business position of a company, PESTLE analysis is used extensively to examine the political, economic, social, technological, legal and environmental factors which impacts the business. This is an essential analysis required for automakers like Volkswagen as it assists to figure out the dynamic nature out in the market and helps make progress in its business.
Political
As per the latest updated news from the government of UK, the nation plans to cut down the fuel (petrol and diesel) vehicles with the year 2040 (MBA Team). In replacement of the diminishing petrol and diesel vehicles, the government plans to introduce half electric and fully equipped electric vehicles which will have a lower emission and consumption rate. Organisations are under a huge stress to diminish the pollution and emphasis on sustainable eco-friendly sources of energy (Sierzchula & Bakker, 2014).
Economic
Economic factors affect the business and demand in a direct way such as luxurious cars of Volkswagen may experience a dent. Economic fluctuations occur due to varied reasons globally and this has an impact on the reduced demands and losses. However, certain factors that are in support of the sector are an increase in GDP, rise disposable income, demand for affluent way of living, less expensive basic models and comfortable monthly payment options (SWOT & PESTLE.com, 2020). In the economic perspective, the German brand has opened up in developing and developed countries such as India in Asia, and parts of the African continent.
Social
The type of car people choose depends on their needs and in countries like Singapore, the market has more love towards sedan cars compared to hatchbacks. The lifestyle and preferences of people when purchasing a vehicle changes from person to person. In India, the market is mixed and VW has introduced Polo which is a great hit in the market. If vehicles of the Golf series enter the Indian market, it would be a tough competition for the rivals like Hyundai, Suzuki and Honda brands to compete with Volkswagen.
Technological
In the present era, automatic cars, electric cars, self-driving cars have started to boom and this has increased the sales incredibly by giving a great hit in the market. Younger generation automobile users are keener on these types of vehicular segments. Self-driving cars are already on road such as Tesla and the future years could see a lot more brands enter into this segment if all goes well. However, the process and experience of this is not fully compliant and would differ globally according to each country’s standards and interest of buyers.
Legal
In 2015, the German brand went through a tough period as it had violated the norms and regulations posed by the government of US Environmental Protection Agency. The vehicles were manufactured with engines that failed the emission test. According to Farooq (2019), the primary contention was that the engines of VW produced less emission during the tests, and more during regular use by consumers. So, in order to avoid such allegations, Volkswagen needs to wholesomely work on its products to be environmentally friendly which will make it stand in the limelight soon.
Environmental
The main issue of global climate is the threat that most of the car manufacturers are facing. The standard engines are being replaced with further thoughts along with implementation of modern engines with the use of technology that produce fewer emissions that will have lesser impact in the atmosphere. Farooq (2019) mentions that ultra-low-emission vehicles are progressively prevailing in the market, and introduction of such models makes the automotive companies enter into a new era of automobile technology.
Consumer Analysis
Demographics –
The consumer analysis in the perspective of Singapore will be discussed in this report. The consumers age group is between twenty-five to fifty years in which 80.5 % of people are educated. The gender of consumers portrays an equal share as more people are educated and the country is well developed, both men and women choose to work.
The mean income of consumers in S$4,000 along with other perks and benefits which allows them to plan and save for essential necessities and requirements like cars and the country has 32.3 % of people who own degrees (Volkswagen, 2016). The size of a general family consists of three to five, which makes them opt for a comfortable sedan vehicle.
Behavioural Segmentation
Vehicles have become a necessity in the present generation in terms of quick transportation, as people need to reach their destination in an efficient manner. Rindell and Iglesias (2014), mention that a strong image sets out reliance, constancy and distinction in a brand, particularly when the market is passionate and competing. After the purchase of a VW product, the consumer builds up a strong bond with the car and at least retains the it for a minimum of three to five years as the consumer feels it strong and mechanically sound depending on the usage. When it comes to purposes there are various reasons such as comfort, luxury, strong build and so on. VW cars are used for city drives and also highway drives as the German automaker designs GT sport engines in some of its models like VW Golf and Polo and this is liked by many people as when it comes to highway, the turbo kicks in instantly. A VW consumer gets attractive financing concepts and direct support from the brand during arousal of issues. Furthermore, VW’s service before and after sale is of remarkable quality with precise resolutions to customer necessities (Kiron, 2018). Among the global car manufacturers, VW has gained strong brand loyalty, placed behind Audi, which is also owned by the Volkswagen group. According to a research from Rocket Fuel (My Customer, 2015) mentions that 41% of VW customers have chosen the brand repeatedly over the past five years when compared with other brands.
Geographical Segmentation
Volkswagen group functions 125 production plants in 20 European countries and an additional 11 countries in America, Asia and Africa (Portrait and Production Plants). There is a total of 153 countries in which VW sells its vehicles (Volkswagen 2015).
Competitor Analysis
The major global competitors of VW include Suzuki. Ford, General Motors, Hyundai, Honda, Nissan, Chrysler and BMW. Apart from these general automakers, electric and hybrid car rivals such as Tesla from America are prone to pose threats in the near future as recent research states that people may tend to opt for electric and driverless car in the upcoming years which not only makes the environment greener but also seamlessly easy for customers.
Internal Brand Audit
Financial Review
Volkswagen group has generated sales revenue of €252.6 billion between the months of January and December in the year 2019, and when compared with 2018, there has been a hike of 7.1% in the financial figures (Volkswagen Group, 2019). The information indicates that there have been fruitful sales in the year 2019 with healthy numerical figures. Around 11.0 million VW group vehicles have been delivered to customers globally with a hike of 1.3% when compared to 2018. However, the negative impact VW had was the exchange rate trend that had an offset during the period. The Gross profit increased by €2.8 billion, taking up the total value to €49.1 billion.
Brand Strategy
The brand strategy consists of two elements known as brand portfolio and brand positioning. Volkswagen conglomerate group comprises of twelve brands from seven European countries such as passenger cars of VW, Audi, Seat, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, commercial vehicles of VW, Scania and MAN. The above-mentioned brands have their unique identity and popularity in the market place with customers showing love and craze for these sporty and luxurious sound machines. The points of parity (PAR) of VW include motorsport history, global presence and huge communication budget in terms of advertising (Bellanger et al., 2014). VW is present in Formula 1 with expanding its international market across the world so that is it is easy to beat the rivals. The points of difference (POD) of VW include the German quality in terms of innovation and performance, production of premium cars and its major home production i.e., even though the cost of labours in Germany is expensive, VW manufacturers significant number of vehicles there (Bellanger et al., 2014).
SWOT Analysis
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Source: Jurevicious, 2016
Abbildung in dieser Leseprobe nicht enthalten
Source: Jurevicious, 2016
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- Quote paper
- MR PRASANNA VENKATESAN MEENAKSHISUNDARAM (Author), 2020, Brand Audit Analysis for Volkswagen - The German Carmaker, Munich, GRIN Verlag, https://www.grin.com/document/1234490
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