Globalizing Volkswagen:
Creating Excellence on All Fronts

BACKGROUND

Since its beginning in 1938, when the Germany government laid the foundations of the first Volkswagen factory to build a "People's Car", Volkswagen has had its times of trial and prosperity.  Hardly making it through the end of World War II, this company has had several different executives to take it in many different directions, some bringing prosperous growth and others defeat and lost investment.  Competition brought VW to its knees in the late 1980's and early 1990's, 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 became the first to sell over 5 million cars worldwide increasing its world market value by 12.4 percent from the previous year.  It is recorded to have the record highest profits in history, reaching 2.9 billion euro dollars after tax, which at that time calculated to almost 3.5 billion U.S. dollars.

STRATEGY

In 1993 when Piech took over, he needed to address some serious problems in order to produce a profit in the years to come.  A main concern was production costs.  They needed to find a more efficient and less costly way to produce the different models of Volkswagen.  This is the largest area that they were losing the comp ...