Wednesday, April 3, 2013

Shanghai Volkswagen: Time for a Radical Shift of Gears

1 Apply SWOT-Analyses to SVW in 1985 and 2004 and evaluate the Match between SVWs Strategies and its inner(a) and External Environments at both Time Points.

1.1 SWOT digest 1985

1.1.1 Strengths

In SVWs early days, the availability of an existing net hightail it to undertake gross sales and distribution was an advantage to the joint venture. SVW had blind drunk relationships to the government, since SAIC was under the governments supervision. That helped to influence a big market share in china and get large contracts with the government, related companies and taxi fleets.

With the technology and know-how of VW, SVW had a big plus point compared to other local producers.

1.1.2 Weaknesses

SVW utilize a simple-technology and simple-product strategy. Furthermore there was quite a high up cost structure, while sales and the production team where weak. How-ever it could work as long as there were no strong competitors on the market.

1.1.3 Opportunities

There were just a handful of state-owned car plants that produced a few outdated models in a low-tech ineffectual environment. There was no company that produced safe passenger cars with an modern design. Since there were no foreign car pro-ducers in China, SVW could social occasion the first-mover advantages.

Another opportunity is related to the infrastructure of China.

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If the government im-proves the infrastructure, the Chinese passel are going to see a sense in buying a car in future.

1.1.4 Threats

Many doubted that it would be contingent to produce and sell at least 100.000 units per year in China in order to achieve the economies of scale needed to produce a re-turn on investment. Furthermore experience in other developing countries suggested that a gross domestic product per capita had to reach $ 4000 to $ 6000 onwards large-scale family car buying could take place. When SVW started to produce the GDP stood...

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