The case study for Volkswagen.
In 1937, the German government founded Volkswagen to a mass produce a low priced “people car”. Volkswagen has had its times of trial and prosperity. Hardly marking it through the end of World War II, this company has had many different executives, like Martin Winterkorn trying to take the company to many different directions, weather bringing prosperous growth or defeat and lost investment. Competition brought VW to its knees in the late 1980’s and early 1990’, and they faced defeat if they couldn’t turn it around to compete against the new Japanese manufacturing and production that decreased the costs of cars making them more affordable and appealing. In early 1993 Ferdinand Piech took over as CEO of Volkswagen, and began to implement his plan to turn their future around. Piech transformed VW into a powerful global player buying out other well-known car brands, such as Bentley, Bugatti, and Lamborghini, to add them to the Volkswagen industry. By the year 2000 Volkswagen was the first to sell over 5 million cars worldwide increasing its word market value by 12.4 percent from the previous year. It is recorded to have highest profits, reaching 2.9 billion euro, which at that time it was calculated as almost 3.5 billion U.S. dollars. “WHEN Ferdinand Piech arrived as Volkswagen’s chief executive in 1993, things looked dire. The carmaker was overspending, over manned and inefficient, and had lost its reputation for quality” (economist.com). They needed to find a more efficient and less costly was to produce the different models of Volkswagen. They needed a strategy that would fix their current problem and also be able to adept easily to changes in the future to allow for growth market. Piech took the idea of using platform development. Platform development is used in production of vehicles, and the basic principle is that all the Volkswagen models would have the same basic structures. Having consistency in the...
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