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The Volkswagen Emissions Scandal Case Solution

Solution Id Length Case Author Case Publisher
2329 1407 Words (9 Pages) Luann J. Lynch, Cameron Cutro, Elizabeth Bird Darden School of Business : UV7245
This solution includes: A Word File A Word File

The problem was the emission scandal which was imposed on Volkswagen for using diesel cars by which there was the release of an enormous amount of nitrogen oxide and polluting the atmosphere. Due to this scandal, Volkswagen lost their market share and were facing lots of issues related to pricing, supplier trust, financial losses, etc., and was in the eye of regulatory authorities for investigations in multiple countries. So below are some of the recommendations for Volkswagen to implement in order to regain their market share and adjust their financial losses.

Following questions are answered in this case study solution

  1. Environmental Analysis

  2. Internal Analysis

  3. Sustainable Competitive Advantage Analysis

  4. Problem Statement

  5. Questions for presenter

Case Analysis for The Volkswagen Emissions Scandal

2. Internal Analysis

i. Competitors Analysis

Volkswagen have huge competition and the major ones are: General Motors, Toyota, Suzuki, Ford, Honda, FCA, Mercedes, and BMW.

General Motors

The purpose of General Motors is continuously investing in technologies that would transform the future of mobility and also would be working on cost efficiencies to further get into the future opportunities. In order to have success for generations, it is critical for GM to manage both well. General Motors projects strong earnings of 2019-2020 and continuously launching the all-new portfolio of the trucks in the US and the crossovers globally. For General Motors, the Cadillac will be the lead electric car brand. 


Toyota Motors-the Japanese firm wanted to electrify their whole lines by 2025. In the next 08 years, their plan is to launch more than 10 electric cars. With the increase of commitment of battery-powered cars, Toyota is expecting to sell around 5.5 million battery-electric cars and hydrogen fuel-cell cars, which also includes electrical cars.

Value Chain Analysis

The value chain analysis helps Volkswagen to identify its key strong or weak areas and develop such areas to achieve a competitive edge over the rivals. So each and every activity in the value chain analysis are superior based on the nature of the business.




General Motors

Marketing and Sales

Volkswagen uses a double marketing concept for positioning its brand and its top priority is turning consumers into the most satisfied customers.
This activity is superior because it contains distribution, advertising, management of sales force, and management of customer relationship.

Toyota’s major investment is in the market and sales and invested more than 4 billion US dollars in advertising to reach the huge market segments with their new and current offerings.

General Motors wanted to reach their customers in a very cost-effective manner so they started “Hot Button” Marketing program where they will be giving away 1100 vehicles by participating in this program.

Follow up services

This is the final activity and this activity adds value to the products and comprises of customer support for the sake of the product to the customer and that’s superior for customer retention.
Volkswagen has Proactive Maintainainance Management where they have worldwide 1400 state-of-the-art points high-quality specialist tools and modern diagnostic systems.

Toyota works on its principle of “Customer always comes first” and this principle is reflected in all business procedures and practices.

Logistics Manager in GM are focusing and concerned about return handling, and it has grown in importance in recent years that emphasized on the Hazardous and recycling material handlings. GM products are considered as Extended products it means they are sold with after-sales service.

ii. Financial Analysis

As per (Hans), the liquidity ratio of Volkswagen was declining by some points since 2013 from 1.03 in 2013 to 0.98 in 2015, a decrease of 4.85%, it means current assets are less than the current liability and that’s a bad sign because that signals that may be company would not be able to pay off the debt if this trend continues. Whereas, the ROE of Volkswagen in the case shows that it was declining at the highest rate which is 11.19 in 2013-2014 but jumped -1.67 in 2015 due to that emission scandal. Moreover, the Net Profit Margin shows that part of revenue remains after all deductions. In the case of Volkswagen, it was constant till 2014 at 4.5% but suddenly dropped to -9.8% in 2015 and contributing to the losses.

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