II. Situational Analysis
III. Theoretical background
IV. Conceptual Model
V. Research Design
According to James R. Healey (2011), reporter for USA Today, customers have lost confidence in Volkswagen’s quality. Volkswagen has been subjected to a real loss in the perception of its customers regarding its cars quality.
This situation results mainly from a quality problem. In fact, according to Marty Padgett (May 14, 2007), for the website www.thecarconnection.com: “The CEO of Volkswagen of America admits the company generated a lot of ‘venom’ with the massive quality problems it experienced earlier this decade.”
This position is emphasized by a Hallmark representative who observed: “Volkswagen representatives point out that the company's scores are improving, which is true. But so is almost everyone else's. Shame on us that we haven't moved up the ranking.”
Volkswagen had difficulty recognizing the problem as evinced by Trahan’s 2010 position on this matter. He was effectively thinking that the brand did better that it got credit for.
Nevertheless, according to James R. Healey (2011), for USA Today, the company now seems to be taking the problem seriously since the beginning of 2011. "We have some trouble in IQS that we have to fix" remarked Trahan earlier this year.
In the 2011 IQS, Volkswagen owners reported an average of 131 problems per 100 cars, putting the company into a tie with Mini for 29th among 32 brands. The best was Lexus at 73/100, and the worst was Dodge at 137/100. Volkswagen’s score in 2010 was slightly worse than Dodge’s in 2011 at 135/100. That said, the company is still struggling to improve his score. According to the 2010 IQS report, Volkswagen score was only slightly worse than the 2011 one, with 135 problems per 100 cars.
Historically, Volkswagen has been known for the quality of its cars; quality is measured by a car’s reliability and its ability to make life easier for owners.
To improve Volkswagen’s IQS score and thus reverse the trend in the US, the brand should reevaluate its quality standards that originally established its reputation. By doing so, Volkswagen could maintain its leading position in Europe while improving its market share in the US. This could enable the company to remain the most profitable automotive brand.
What position should Volkswagen take on the current quality situation? What are the causes of such loss? What departments should Volkswagen restructure to avoid the quality problems?
II. Situational Analysis:
The brand has always been known for its reliable cars. Jason Chavis (2010), contributor for the website www.ehow.com, easily stressed it out by reminding that, throughout the eighties and the early nineties, Volkswagen was plagued by a number of quality control issues, particularly in its American market. This resulted in a new goal for the company. Volkswagen wanted people to know that driving was fun again. The famous “die deutsche Qualität” motto results from this. Nevertheless, things have changed; the quality of Volkswagen products is recently decreasing.
The Volkswagen Annual Report 2010 made obvious that Volkswagen does not really realize that its Quality Assurance is not as reliable as it used to be. The report clearly explains that the aim of Volkswagen is “to secure a pole position in terms of customer satisfaction and brand loyalty”. The problem is that Volkswagen needs to do more than securing a pole position. Volkswagen needs to reach this position. For instance, the J.D. Power - a website providing consumers information by using consumer satisfaction data collected to help them in their buying decisions - and Associates 2011 Initial Quality Survey illustrates this situation quite well: Volkswagen reports 131 problems per 100 vehicles. This is very close to the last one, Dodge, with 137. To make a good comparison, Lexus is first with 73 problems per 100...