Sector Definition and Scope of Relevant VW Group activities This assignment is a continuation of your work on the Automobile car Industry in Set Industry. In particular that assignment describes the sector you are analysing as follows: ? Sector definition: The automobile industry is a large global market, incorporating cars, trucks, and motorcycles. For the purposes of your assignment, you should focus particularly on the car industry, although acknowledging any synergies or overlaps with the truck and motorcycle businesses. Typical traditional major competitors have included companies such as Toyota, Ford, Renault Nissan, Fiat, Hyundai, etc. Thus, in studying the VW group in assignment #2 you should focus on those activities in the VW group which fall directly within the automobile car industry. VW’s website states that its group “activities focus on its Automotive and Financial services divisions.” In reviewing the VW group structure please be guided by the following: • VW automobile car brands include broad scope brands such as VW cars, Audi, SEAT, and Skoda, together with narrow segment target brands such as Bentley, Lamborghini, and Bugatti. These brands (and the businesses they represent) all fall within the scope of the assignment. • VW’s truck and commercial vehicle brands include Scania and VW Commercial vehicles. In line with the “sector definition” note above, these brands fall outside the scope of the current assignment. • VW AG has substantial Financial Services activities in separate group divisions. These divisions obviously serve the automobile marketplace, but should be regarded as outside the scope of this assignment. • Like many large corporations VW operates globally through a complex web of legal entities, reflecting specific legal and tax requirements in many countries. You are not asked to analyse this legal web of companies (mostly shown under “other companies” on the website), concentrating instead on the elements of the group structure which support VW’s group automobile car brand structure. You are asked to analyse the VW group’s activities, limited to the automobile car industry as described above. As with many large corporations with complex operations, VW group faces a need to balance sometimes conflicting forces: 1. The drive for sales growth is achieved through a divisional focus on a coherent, distinctive branding strategy, complimented by a coherent product line strategy. The brands must be distinctive enough to appeal to a variety of target segments, thus maximizing potential group sales. For each of the target segments, the product line strategy must equally offer a range of personal transport solutions to meet a variety of practical needs (compact cars, family saloons, estates, MPVs, SUVs, sports cars, etc.) 2. Where, however, the opportunity exists to benefit from significant scale or scope economies, or, for example, from synergistic knowledge transfer, the VW group needs to ensure that separate divisions and distinct brands cooperate in the drive for efficient operations. For example, the website “Innovation” section talks of shared networked cooperation, “trendscouting” and “researches for (the benefit of) all group brands.” The implication of this is clear. Whilst you need to consider the VW group as a collection of businesses representing distinctive automobile car brands, these brands are supported and depend on operational resources and capabilities that reach across the whole group, and are intended to benefit the VW group’s automobile car activities as a whole. A final word of warning … the use of the word “brands” here, does not imply this assignment can be answered as a marketing assignment. Brand strategy is an important of VW’s business and corporate strategy, which is where our focus on this module lies… Reminder of administrative requirements Please remember that you must: 1. Include the name of your seminar tutor on the front page of your assignment submission 2. Include a copy of the U51062 feedback criteria and marking sheet (see module guide) with your name and number attached 3. Include the signed declaration page stating that your work is your own original effort, and has not been copied, etc. All of the above are requirements of the assignment. Failure to submit any one of these three may mean that your work will simply not be marked. Please ensure your hard work is not wasted – such measures have already been enforced on assignment #1.