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Volkwagen recently revealed an aggressive strategy to become the top automobile manufacturer in the world. Currently, the company is third behind Toyota and General Motors. Volkswagen executives believe they can sell 1 million vehicles per year by 2018, but industry analysts see the company selling considerably less even under the best projections. The company’s strategy hinges on widespread acceptance of a vehicle it is not currently producing, dramatically increased sales of a crossover vehicle that is being outsold 8-1 by two other models, and reintroduction of a luxury vehicle that previously failed in the United States.

QUESTIONS:

M1. In what ways does Volkwagen’s strategy reflect multi-dimensional thinking? What role should strategic opportunism play?
M2. In what type of decision environment is Volkswagen operating? Given widely different interpretations about the company’s capabilities, what should VW executives do to improve their decision making?
M3. What decision-making error might explain why Volkswagen has an optimistic view of the chances to become #1 while industry analysts are less confident? The decision to reintroduce the Phaeton could reflect what decision-making trap? [Read the final section of the article for a hint.]

IB1. Consider the characteristics associated with globalization in the introductory section of Chapter 9. Why is the United States important to a company like Volkswagen? Is Volkwagen’s strategy, as outlined in the article, multi-domestic or true globalization?
IB2. What are some of the factors you believe to be driving Volkswagen’s “ramped up” strategy?
IB3. What type of competitive strategy is Volkswagen pursuing?

SOURCE: J. Healey, “VW Plans to Be No. 1 Car Seller in the World By 2018,” USA Today (Retrievable online at http://www.usatoday.com/money/autos/2010-09-03-vw03_CV_N.htm)

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