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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 |
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
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Environmental Analysis
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Internal Analysis
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Sustainable Competitive Advantage Analysis
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Problem Statement
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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
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.
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Volkswagen |
Toyota |
General Motors |
|
|
Marketing and Sales |
Superior |
Superior |
Superior |
|
Follow up services |
Superior |
Superior |
Superior |
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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