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Joaz Williamson

How can Volkswagen lose its competitive edge? Evaluate the strategies they could employ to regain their former position.

Nuffield Economics & Business AS level portfolio

In this coursework I’m going to investigate competitive edge and how this can improve a Business and its financial situation. The company I’m going to assess is Volkswagen, who recently came across a slump in their financial situation and who are also beginning to loose their competitive edge.

Volkswagen's relationship with the UK dates back to 1952, when the first two Beetles were sold. In 1953 Volkswagen Motors Ltd became the official UK importer, and the brand went from strength to strength.

Today Volkswagen UK, as part of the Volkswagen Group, is one of the country's largest importers of vehicles, employing nearly 600 people nationwide, with the Volkswagen brand employing 174 in Blakelands alone. Volkswagen also has 260 retailers throughout the UK.

Financial situation

Volkswagens general out look makes it seem like a very financially stable and innovative company. However from inspecting their 2005 Annual report these innovative ideas don’t seem to be enough. The increased prices of raw material and steel have been a set back for Volkswagen. Their range of cars have become similar to that of other large European automakers and in North America, VW faces an unexpected challenge to maintain its relevance. After rising significantly between 1998 and 2001, Volkswagens sales began to fall sharply, leading to a huge 2005 loss of around $1 billion for its operations in the U.S. and Canada.

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The reliability of the company's cars appears to take some of the responsibility for its huge slump. By 2005, its models sat near the bottom of Consumer Reports reliability ratings, and VW were ranked 35th out of 37 brands in its initial quality survey.

Innovation is however said to be the core focus of the 2005 annual report, improvements to things like engine design concepts and attractive new interior are just a few innovative ideas VW are aiming to include in their new schemes.

Innovation

The Automotive business face’s considerable pressure, seeking both growth and cost reduction’s to give ...

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