Question

What can Volkswagen AG do to turn their weaknesses into strengths and threats into opportunities?

Can Volkswagen AG develop new functional, business, or corporate strategies to accomplish this change?

Answer 1

Answer 1.
Weakness to strengths-
1. Volkswagen should rebuild its brand image which was tarnished by the diesel scandal. The famous diesel scandal in the year 2015 had caused a great loss to the image of Volkswagen. The company should take steps to immediately rebuild its image. Rebuilding its brand image will cause the trust of the customers on the brand. This will increase the profitability of company.
2. The company has paid around 25 billion in fines and penalties for painted vehicles. The company should take immediate step to reduce the operating profit due to the increased compliance issues. This has caused serious effects on the operating profit of the brand..
Threats to opportunities-
1. This company is facing heavy competition in the automotive industry. The competition is intense especially in the premium segment. In order to cope with this the company has to to focus on its USP which is its brand image. The company although has a wide range of portfolios it also sells Financial Services. The financial service include dealer and customer financing, leasing, direct bike insurance etc. The wide range of portfolio in this brand sometimes leads to decline in sales across any one of the categories. The company should ensure consistency in high sales in all of which brand and services.
2. The company has created legal issues for itself which has force it more than 25 billion US dollars. It has suffered a huge amount of financial loss. Company should take actions to avoid getting itself into legal issues. If the company is able to avoid itself from legal issues the financial stress which the company is facing will be reduced and the operating profit will increase.
Answer 2.
Yes Volkswagen AG has to develop new strategies to accomplish this change. The brand has done well in spite of facing difficult situation around the world. The company's reputation affected by diesel scandal and other several various ups and downs ,still made it the best selling brand in the year 2016. The company has made several strategies to turn itself into profit making organization. It had partnership with China and IT sales has gone up in South Asian and Asian Pacific market. The company needs to restructure its business management by making changes in the problems it is facing, including this changes will make the company grow faster.
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