Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.
Automobile industry was once a booming industry in the world and it has progressed through leaps and bounds. In the current era certain companies are progressing in this industry however there are certain organizations that are facing difficulties in this industry due to industry regulations and environmental hazards. In general the industry is facing difficult situations because of the slow demand and the tight rules on emission that are laid down by European regulators. The demand is decreasing for luxury items therefore the automobile is facing the turmoil. As far as Volkswagen is concerned the company is facing some issues and experts believe that company might face difficult circumstances in the current era. As far as the automobile industry is concerned Volkswagen is treated as the European market leader. The competitors of Volkswagen are Peugeot and Renault. The biggest external challenge the company is facing is the high cost of labor and they are working hard to reduce the labor costs by making the workers work more at the same cost. The competition is getting fierce and Volkswagen is facing problems with the workers because they believe that their bargaining power is relatively high and due to inflation they want more wages. These issues are serious threats to the company in both the short and the long run.
The rising issues of Volkswagen are high labor costs, lack of demand, environmental issues, bargaining power of the workers etc. A forward-looking approach must be developed organization in order to deal with these issues. The external analysis of Volkswagen depicts that issues like high labor costs and bargaining power of the workers are the threats to the company. However, lack of demand and environmental issues can be a viable option to penetrate the market. Demand can be created amongst the consumers through proper branding and brand activation strategies. Positioning a positive attitude in the minds of the target consumers would definitely generate demand among the consumers. Demand can be created through number of options and this is definitely an opportunity for Volkswagen. Effectively dealing with environmental issues can develop a positive frame of mind amongst the consumers. Developing cars that are free from emissions is definitely an opportunity for the organization and the company can cash on this issue and can treat this issue as an opportunity. High labor cost is a threat to the organization because company can’t reduce it due to the rising trends of inflation. Similarly worker unions would intervene in these matters and they might stop working for the company on low wage rates. Therefore, these issues are the concerning ones for Volkswagen.
The major players in the industry are Volkswagen, Peugeot, Renault, Nissan, Toyota etc. Nearly all the players of the automobile industry are facing the same issues. The diminishing demand in the automobile industry is causing problems for all of them. The intensity of competition in the industry is moderate because all the rivals are facing with same opportunities and threats. The basis of competition in the industry is to generate innovative ideas and to cut the cost to achieve operational and organizational excellence. In the example of Audi which was treated as the luxury wing in the Volkswagen group the car is becoming popular in high-income sectors and the car is giving tough completion to successful brands like Mercedes and BMW.
The automobile industry is capital oriented industry and huge amount of capital is required to start a business in this sector. Although this industry requires specialized labor hefty amount of work and technicalities are dealt with by machines and robots. These machines and robots are quite expensive in nature and a layman can’t even think of buying them. The threat of new entrants is minimal in this industry and due to its high initial cost, the industry is safe from new entrants. But, China and India are posing the biggest threat to this industry. China with its efficient labor force and cost-affecting approach is capturing the automobile market. The cars developed by China are ecologically friendly as well therefore they are capturing the market. China is exporting cars to Africa and some parts of Eastern Europe. Same is the case with India because cost-effective automobiles are produced by them. Indian cars are effective in fuel consumption and they are making their way in the Asian markets. The barriers to entry in this industry are its high initial cost and different issues like environmental problems, labor issues etc. Competitive responses by firms like Volkswagen and Peugeot would be producing cars that are cost effective. Similarly, ecological friendly cars might be produced by them. Newer and innovative models after a certain period of time and proper brand positioning in the minds of the consumers might be the viable responses of firms like Volkswagen and Peugeot.
Certain factors are similar to all the producers of the automobile industry and they are known as the market commonality. The market commonality in 2006 was low demand, ecological issues, high cost of labor, booming outsourcing industry etc. Similarly the resource similarities were that all the producers were technologically enriched and they are working on the same principle as others do. Global recession and the lack of demands is the biggest issue that these automobile industries are facing and they have to create new business models in order to get efficient and effective results.
Do you need this or any other assignment done for you from scratch?
We have qualified writers to help you.
We assure you a quality paper that is 100% free from plagiarism and AI.
You can choose either format of your choice ( Apa, Mla, Havard, Chicago, or any other)
NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.
NB: All your data is kept safe from the public.