VOLKSWAGEN TNC case study

Strategies

+To create a specific market. E.g. manufacturing cheaper cars in less wealthy countries such as +Brazil but they will not sell these cars in the more wealthy countries such as the USA

Where does it operate?

-Head quarters in Wolfsburg, Germany -Production facilities: 120 production plants in 20 European countries and a further 11 countries in the Americas, Asia and Africa. -Rand D across the world including: fuel cell development in Canada and group research in China

Markets

-Largest in china - large in europe - many other continents

What does it do?

-One of the world's leading manufacturers of automobiles -Largest carmaker in Europe -330 automobile models

Strategies

-VW group made up of 12 brands from 7 European countries: eg. audi -Developed a strategy of diversification focused on both quality and performance _

Positive corporate responsibility

Employee policies include family friendly and gender equality policies. Programs include the Compass program, which encourages women with high potential into management positions. The Career with Children programme helps mothers and fathers on return from parental leave to help continue their career effectively as possible. The Management Mentoring programme also aims to support women who are moving into management positions.

Strategies

Offshoring - manufacture outside of Germany because: +Cheap labour +Some of the joint brands' are established in other countries +To create a bigger market due increasing their market share and selling more cars to more people

Country of origin

Originally established in 1937 in Berlin, Germany

Controversies

The 'Dieselgate' scandal within Volkswagen began in Sept 2015, when the EPA noticed that they had violated the Clean Air Act by intentionally programming their diesel engines to only activate their emission controls during emissions testing, which meant they emitted 40x the amount of NOx gas than the US legally permitted. This feature was exhibited in 11 million cars worldwide, with significant global impacts.

Positive corporate responsibility

They also have quotas of the number of women they are trying to put into management to increase gender equality in the form.

Positive corporate responsibility

They are currently promoting the progress they've made in terms of creating greener vehicles - including zero-emission electric vehicles. The company has environmental goals, such as the 'zero waste to landfill' (excluding construction waste).

Positive corporate responsibility

They are minimising their carbon intensity alongside increasing their renewable energy capacity by building one of the largest roof-mounted solar schemes in Britain.

Joint venture

Volkswagen Group and Chinese manufacturer JAC sign joint venture agreement New 50:50 joint venture The aim will develop electric vehicles together and launch them on the hotly contested Chinese mass market.

Positive corporate responsibility

Works to support charities including : The RSPCA - they donated 6 Crafter transportation vans, saving them £250,000 a year in boarding fees.They also support the Milton Keynes charitable foundation and have done for 30 years, in total raising over £1 million for them, by helping vulnerable members of the community.

Conserquences

→ The stock price of the brand fell by ⅓ in the days following the incident → The CEO of Volkswagen Martin Winterkorn resigned and other employees who were involved in the research and development aspect of the company were suspended.

Conserquences

→ Volkswagen planned to refit all affected cars in part of a recall campaign. → VW had to plead guilty to criminal charges, in which 6 executives were charged and they had to pay $4.3 billion in penalties.

Conserquences

→ it was estimated by researchers at MIT that 1200 people died early deaths due to the excess NOx pumped into the atmosphere by VW. → Volkswagen announced plans of spending $7.3 billion(later increased to $18.32 billion) on rectifying the emission issues they caused.

Conserquences

→ triggered discussion over higher levels of pollution emitted by diesel, henceforth causing further scandals within car companies such as Volvo, Renault and Jeep in which there were investigations into their emissions.