The primary purpose of the case is to enable students to learn how firms should re-strategize their businesses during crises and adopt measures for business transformation in the context of China, a major emerging market for Volkswagen (VW).
During the in-depth case analysis, learners should take away the following key learning points:
LO1: To develop a holistic perspective on the major business challenges faced by Volkswagen.
LO2: To study the impact of different factors driving business transformation in Volkswagen.
LO3: To apply some of the theories of strategy to understand the context of Volkswagen.
LO4: To evaluate the alternatives and analyze their best fit for the business strategy of Volkswagen in China.
Oliver Blume, the newly appointed chief executive officer of VW Group, had just emphasized the company’s commitment to an ongoing plan aimed at transforming the German automaker from the bottom up by introducing the ACCELERATE strategy. This was aimed at expediting business transformation through digital and product portfolio transformation. Volkswagen in the post-COVID-19 era, especially in 2022, was still grappling with major business challenges in terms of cost, sales, competition, the fallout from the “Dieselgate” scandal in the backend and the race among major players toward electric mobility. In the fiscal year 2024, VW’s gains and losses in the emerging markets were uneven. Volkswagen, being Germany’s mightiest company in the automotive industry, might have had to close some of its plants for the first time in its 87 years of existence due to fierce competition from one of its highest-selling markets, China. Plummeting sales and low returns in emerging markets had played a major roadblock in VW’s growth. VW was pumping €35bn into the shift to electric vehicles and into becoming the world’s largest electric carmaker by 2025, while remaining flexible in orienting its digital transformation to the needs of emerging markets.
In recounting the Volkswagen story, the case offers a detailed overview of the VW Group’s major historical developments, its current operations, the dilemmas in management decisions and the major challenges the group faces. This case study will help students understand VW’s flexible approach to digital transformation for its survival in the automotive industry.
This case can be taught in the area of General Management and Strategy to teach the concepts of Business Strategy and Business Transformation. It will be more relevant and better understood when students have learned the basic concepts of strategy and some understanding of business transformation. This case can be used as teaching material in various courses:
Undergraduate students of Management, Business and Marketing, particularly final year students.
CSS 11: Strategy.
