Discuss about the International Business Across Border for Business Service Industry.
The aim of every company is to make profits. Our project explain about the Volkswagen company.Birkinshaw et al.(2011 p.45) Volkswagen is a worldwide automobile manufacture which has more than 10 million sales of passengers cars and it manufactures more than 6 brands of cars .The company always provide the apt vehicles to the market .There are various brands of the vehicles that the company deals with such as the ;Audi, Volkswagen AG,Skoda,and also the Poescher.The company operates in many countries ranging from 25-30 countries through the world Birkinshaw et al.(2011 p.78) argues that the company has formulated strategies such as the Strategy 2025 which addresses the following;
Need to build trust within the company; For the company to regain on the trust for the consumers and to improve on the quality of the brands sold it was to recommend on factors that could promote the company’s values. Strategy 2025 of the company aims at coming up with the values that could sustain the customers at large. Dikova et al.(2010 p.67) focuses on coming up with appropriate campaign that will improve the stages for car manufacturing and also the adequate steps that the company takes to satisfy their customers at large.
Formation of the hybrid focus within the Volkswagen company. Through various research within the company, it was noted that the hybrid market was a key factor for the company to consider in order to move forward Verbeke (2013 p.45) noted that most of the hybrid engines in market fetched huge profits in the market and therefore the company was to come up with appropriate strategies that will focus in designing the hybrid products. The strategy was to market most of the Volkswagen products that is the hybrid vehicles and other new brands which could give large profits once released into the market.
The company is now operating in different regions of the world .In the global development it has tried to analyse different countries in order to come up with better results on the most viable ones .It has been noted that the company has ventured in different countries such as the India ,Thailand and also Indonesia which for now brings huge profits to the company due to the presence of the adequate customers Each of this countries have provided a potential for the Volkswagen to thrive and thus meeting its goals (Shenkar et al,2014 PP 56-57).
On checking on the implementation timeline of the company ,it has been realised that Volkswagen has a 10 year plan .The timeline begins from the whole procedure of designing hybrid vehicles ,coming up with appropriate hybrid programs and increasing the market .Volkswagen has decided to come up with the campaigns advocating for the formation of the new branches all over the globe and also establish new strategies that also could adjust with the local companies within the world Based on the appropriate criteria for the success ,the company also concentrates on the Strategy of 2025 which forms a vital procedure for the success. (Shenkar et al,2014 PP 106-107).
Volkswagen company has developed global strategies and measures that can help it to deal with their competitors. For instance, there are other companies in Japan which are manufacturing vehicles. This companies have formed a threat to the Volkswagen company and thus a need to devise measures and strategies to overcome them .(Binder (2016) indicates that Volkswagen targets to form long term strategies that will help company to step over their competitors (Chhokar, et al,2013 p.56).Competing all over the whole world needs to consider strategies such as ;checking on the vital projects in investments which always have negative ROI , use of financial performances measures that change in foreign countries, coming up with construction of various products facilities that are of either low or high labour cost in different countries and lastly viewing the market position country to another so as to have a wide portfolio on the fact that could determine whether to increase or decrease the profitability (Chhokar, et al,2013 p.156).
Volkswagen according to the research it has been using the following strategies to win their competitors all over the world.
1.Coming up with a global measure of its own.
Volkswagen have been in position to integrate all the world strategies that foster to give an advantage over their competitors in the whole field of the cost and its effectivenss. The company is now at a different position as compared to the time it started. This has been facilitated by its capability to come up with the global competitive strategy which has geared the existence of the company.According to Binder (2016 ). Currently its designing hybrid engines of high quality than their competitors Toyota company.
2.The willingness of the Volkswagen company to invest in the manufacturing sector.
Currently the Volkswagen company management has been in position to come up with the ideas on how to invest in the manufacturing field thus leading to the utmost exploitation in the economies of the scale in all the sales that the company is selling globally.
Most of the automobile companies all over the world gain huge profits basically by meeting the needs of their customers within the market (Binder, 2016 p.149). The company has been in position to understand on the taste of the different drivers within the globe and thus manufacturing more sophisticated vehicles which focuses on satisfying the customer needs. It has been in position to construct new centres and branches which are manufacturing large number of the vehicles daily as compared to their competitors. The whole body of the management is allocating adequate funds necessary to purchase materials adequate for designing improved products.
The existing organizational design structure and the control issues.
Volkswagen company is always based on different organizational design structure over the world. As the one of the largest automobile business company, Volkswagen utilises the strategies in the organizational structure to achieve the goals and the objectives of the company Stahl & Tung .(2015 p.68). The company structure is also connected to other European traditional structures used. The organizational structure is the key factor that have helped the company to achieve for the past 50 years in business. It always describes the Volkswagen company pattern and also the whole arrangement and usage of the resources within the company. It indicated that the overall image of the company leads to the effective and most efficient approach in the management sector.
In most cases the company tend to have a divisional form of the organizational structure. The company structure is always characterised by the following factors.
1.The global hierarchy. Volkswagen always keeps the hierarchical structure regardless of the challenges faced in their operation. Stahl & Tung. (2015 p.118) shows that today’s organizational structure framework, Volkswagen company has been in position to apply the policy of the decision making within the regional administrations and also the whole business sectors of the heads. However, the whole business decision making process has been reduced to centralized format. This means that all the superiors in various units and organs within the Volkswagen always give their reports to the main office or the headquarter within the company.
2.The geographical divisions structure. Volkswagen organizational structure is formed by different divisions all over the world. The company operates in countries such as the America, India, Japan and also China. All the heads within these countries always report to the headquarter of the company (Beugelsdijk and Mudambi, 2013 p.34). Through the geographical division of the company, it has led to improve on the quality of the vehicles manufactured depending on the needs and tastes of the different regions around the world.
3.The product based divisions organizational structure. This forms a key role in selling the products manufactured in the company. The company has 4 subsections that is the Volkswagen Lexus ,The Volkswagen number 1 which deals with the European countries, The Volkswagen number 2 which controls all the branches in the rest of the world and lastly The Core Unit Centre which operates on the quality of the engines designed ,the mode of transmission and the rest of the operation mechanisms used. This design of the Volkswagen company organizational structure always aims to improve the manufacturing of the quality vehicles and other related products (Beugelsdijk & Mudambi, 2013 p.123).
However, the use of this type of the organizational structure have improved on the levels of the flexibility within the company. This means that Volkswagen company will be in position to adjust itself to the needs of different regions within the world thus improving on the products. Also through the improved methods of the decision making, the company is now able to come up with new strategies on what to deliver to the market. The structure too has improved the growth and the resilience of the company internationally (Beugelsdijk & Mudambi, 2013 p.174).
Internationalization is a model which have been applied nearly by all large business enterprises. This means all businesses always seek to work in international markets. Every business always starts within a domestic spheres and as the time goes on the enterprise starts now to plan on how to venture into other markets outside the domestic markets Doz (2011). The reason to go for the international markets changes from a company to the other. Most of the company venture in international markets due to the fact that the domestic market is inadequate hence giving small profits for the enterprise. Also the economies of the scale within the company may not be used by the domestic market thus a need to look for new opportunities outside home. However, we have different entry techniques that most of the companies uses to go to the outside market. The modes are grouped into two that is the non-equity mode which includes the contract agreements and the export while the other mode is the equity mode in entry which always incorporates the joint and the subsidies ventures within the business. Doz (2011) indicates that in most cases the strategy that fetches the low market control and the risk is the export and import strategy while the mode with the highest market control and the risk mechanism is described as the return of the investment.
1.The licensing strategy. For every business to invest in foreign countries it must have a license. Volkswagen company uses license that comprises the company’s patent rights, the copyrights of the company, the trademark and the product to be dealing with. The production of the licensors products is always recorded in the This helps the Volkswagen company to market their vehicles and other related products. The company also pays the license fee and also the royalties connected with the sales return. Licensing is most authorised strategy which ensures the internationalization license (Forsgren K.& Johanson 2014 p.56).
2.Use of the franchising strategy. This tend to be same as the licensing but it focuses on the development and the whole control of the various procedures and the activities that always take place within the business. The company uses the franchises who pay a small fee to the main company, trade using their products in different countries all over the world. These franchises use the Volkswagen trademark and also the company’s selling formats and strategies to sell the products in other countries (Cambridge University Press,2013,p.27).
3.The use of the joint ventures. In most of the international enterprises, the joint ventures also have the equity position and also the management of the firm. Volkswagen company has partnered with the domestic country and this has facilitated to formation of a third party. By this strategy the company is able to sell products to the different nations.
4.Through the direct investment. This involves the total agreement that is based on the whole ownership. The Volkswagen company uses the direct investment strategy to enter to different countries Different countries have owned different products from the Volkswagen company(Stahl et al,2012 p.38).
5.Use of the export and the import strategy. Most of the firms uses this strategy to enter into different countries. This involves a process of selling most of the products or services manufactured by a company to the other countries all over the countries apart from the domestic market. Volkswagen company uses the technique since it sells the vehicles to almost the whole world. The company is involved in the wholly through the export and use of urgent in selling the vehicles (Stahl et al,2012 p.98).
In the production level the company uses the computers which reduces the most of errors that could be incurred during manufacture of new brands, also it reduces failures and also leads to the uninterrupted production .By use of the computerised ideas and use of software’s to analyse various components of the products in the Volkswagen it has facilitated to good quality ,consistent supply of the vehicles in the market and also reducing cases of recalls and delivery deadline within the market .The operational control of the company is all under appropriate personel.Every department within the company is under control by the administration (Okazaki and Taylor ,2013 p.58).
The supply chain management is mostly practised by the most of the automobile companies. The chain management is the network for the organization since it links different sections of the organization to the consumers. It integrates on various efforts needed by the company for the services and products to reach their consumers. Volkswagen company uses various supply chain management.
1.The tool management and operator model. Every worker within the company is always awa0re of what specific component is needed to manufacture a specific car The information within the company terminals gives a description of the important data that can be found in various shops and also the steps to be followed in chain supply of the vehicles to their customers. Also the data can inform most of the workers on the information to follow on usage of the tools (Okazaki & Taylor ,2013 p.148).
2.Application of the spare parts logistics model. The whole idea of spare parts logistics is important for supply chain management. Volkswagen company keeps adequate spares in their stocks which are supplied to the customers at the time of need (Tian, 2016 p.50).
3.The inbound production logistic chain of supply. There is flexible manufacturing and the availability of the sequential allocation of the various parts and components for the specific vehicles within the company. Each logistic within the company describes the steps needed in production level in different manufacturing fields within the company (Cambridge University Press,2013, p.27).
The management of human resource across the borders is done through;
1.Tracing the lifeline of the company. Volkswagen company identifies those measures that would lead to achieving of the goals. This measures would determine the lifeline of the company across the borders (Farndale et al,2010 p.49). The integrated teams within the human resource management check on level of competence of all the human resources within the company.
2.By building a world database to understand the talents and skills of the human resource personnel. Human resource management should determine the skills of every personnel within the company. Volkswagen has database that tracks every human resource within the company.
3.Constructing a mobility pyramid. Volkswagen company always evaluates the skills of the managers on their willingness to move to different areas of the experience. This leads to new opportunities within the company thus able to give various information for the company survival hence increased economies of scale (Farndale et al,2010 p.189).
Key issue for management within the company.
The opportunities for management within the company focuses on the following.
1.Training and creating awareness about the company. Volkswagen evaluates the effectiveness of every worker, maintain the appropriate records for all workers including their level of education the skills and level of the experience. It provides training to human resources across the bounders so as to increase production (Cristea, 2011 p.76).
2.Employee motivation and the empowerment. Employee satisfaction is the key factor that Volkswagen considers. The goal is to keep employees motivated and empowered so as to increase production level of the company.
3.Effective management of human resource. The company obeys the principles of the human resource management and it appreciates its importance (Cristea, 2011 p.76). The whole process of production within the Volkswagen company revolves the ethical measures found in human resource management. The cornerstone of the organization is within the measures of human resource.
The following factors will assist the Volkswagen management and also other automobile companies to improve on the products produced.
1.Using the available technology to connect with the supply chain within the company. Due to the changing world of technology in supply chain, it is very difficult to know on what is happening within the supply chain. Terzi (2016) shows the use of the appropriate technology it will be easy for the company to connect to various chains thus enabling the management to enter the relevant data regarding the product the customer is need of. Use of mobiles by the customers will help to formation database software’s with the needs of the customers by the management.
2.Considering on the quality of the product manufactured. Ineffectiveness and abnormalities for the products manufactured by the company should be avoided. The company ought to manufacture quality products with no defects. All the departments within the Volkswagen company should focus on the quality and also form suggestions that will always aim to improve on what is manufactured before being released into the market. This will not only aim to meet the satisfaction of the customers but also to increase the profits for the company (Poulis et al,2013 p.50).
3.Screening and investigating data to decrease cases of recalls and also the warranty cases. Automobiles company uses complex techniques for them to design vehicles. Management need to check on how the engineers are interpreting the data used to design different products. This will reduce warranty cases and also the recalls within the Volkswagen company The ability to internalize and synthesis the data used to design automotive vehicles is crucial and therefore a need for the manufactures to take into consideration every technique used so as to manufacture high quality products and self-vehicles (Poulis et al,2013 p.230).
4.Enhancing on manufacturing intelligence. Mostly all the information collected regarding a manufacturer should focus on how to improve the level of efficiency and also the standards (Gubbi et al,2010 p.95). The management should identify on levels of improvement within the company regarding the manufacturer intelligence
Conclusion
The company uses different measures to run the business all over the world. The human resource management organ considers the factors and vital procedure that will foster to satisfy human labour. (Gubbi et al,2010 p.135). Manufacturers need to be introduced to new opportunities like running different software’s which will basically aim to improve on the effectiveness. The top level managers should come up with various strategies and important policies that are new trends in order to participate actively in the success of the entire company and reach its goal framework at the end of the intended purpose of the company operations.
References
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