management case analysis

Complete a case analysis of Case 11.2:  Car Wars at Wolfsburg found on pages 341 of your text.  Make sure you open & read the guidelines and rubric that you will find under the Syllabus link of the class.  Please note that the rubric follows the criteria outlined in the assignment guide and rubric.  

 

 

 

Case Analysis Guidelines                                                                          

 

 

 

The purpose of a case analysis assignment is to provide you with an opportunity to apply concepts from class to actual situations.  Your group case analysis should be professionally written, concise, and in APA format. Please be sure to incorporate theories or concepts from class, and outside research. Reference them appropriately.

 

Your case analysis should follow the model described below:

 

·      Read the case thoroughly in 1-2 readings.

 

·      Reread the case and begin your written analysis using the following format and/or headings:

 

·      Synopsis of the Situation:  Write a brief synopsis that describes the background information about the case, an overview of the case.

 

·      Key Issues:  Definethe key issues/factors and the roles of the Key Players.  You should include only those issues that impact the identified problem.

 

·      Define the Problem.  Identify one key problem.  While there may be several problems and a multitude of symptoms, attempt to identify one problem, the resolution of which would alleviate most of the symptoms found in the case.  The problem can frequently be defined around one of the key factors of marketing, target market, environment, or marketing mix elements (product, price, promotion, or distribution).

 

·      Alternative Solutions.  Develop two or more alternative solutions to the defined problem.  This should not be a laundry list of actions one could take to address every symptom, but alternative actions that could correct the problem at hand.  Identify the pros and cons of implementing each alternative.

 

·      Selected Solution to the Problem:  Select one of the alternatives and explain why it would be best.  Most of this work is already done if the alternative solutions clearly point out advantages and disadvantages to each.

 

·      Implementation/Recommendations:  Identify how to implement the selected solution and what the expected results (positive and negative) might be. Your job is to identify an action, not put off action.

 

 

 

CASE STUDY 11.2 CAR WARS AT WOLFSBURG:

 

By Steven L. McShane, University of Western Australia

 

 Over the past 15 years, Volkswagen Group (VW) acquired several fiefdoms—Audi, Lamborghini, Bentley,

 

Bugatti, Skoda, SEAT—that jealously guarded their brand

 

and continuously rebelled against sharing knowledge.

 

One member of VW’s supervisory board (the German

 

equivalent of a board of directors) commented that

 

 managing the company is “like trying to ride a chariot

 

with four or five horses, each of which pulls in a different

 

direction.”

 

 Then Porsche AG entered the fray. The luxury sports car

 

company, which relies on VW for some of its production

 

work, began acquiring stock in VW and eventually

 

achieved a controlling interest. Porsche CEO Wendelin

 

Wiedeking was aware of VW’s internal rivalries. “If you

 

mix the Porsche guys with the Audi guys and the VW guys

 

you will have trouble,” says Wiedeking. “Each is proud to

 

belong to his own company.”

 

 Yet Wiedeking stirred up a different type of conflict as

 

Porsche tightened its grip over VW’s supervisory board.

 

Through an unswerving drive for efficient production and

 

astute marketing, Wiedeking and his executive team transformed Porsche into the world’s most profitable and prestigious car company. Wiedeking wanted to apply those

 

practices at VW by closing down inefficient operations and

 

money-losing car lines.

 

 “Wiedeking is a Porsche CEO from another corporate

 

culture,” says German auto analyst Christoph Stuermer.

 

“He’s out to maximize profits by cutting costs. And

 

he snubbed everyone, telling off VW management, interfering with their way of doing business.” Ferdinand

 

Dudenhoeffer, director of Germany’s Center of Automotive Research (CAR), agrees. “Porsche is very successful in being lean and profitable. It’s not going to be

 

harmonious.”

 

 Particularly offended by Wiedeking’s plans was VW

 

chairman Ferdinand Piëch, who had a different vision of

 

Europe’s largest automaker. Piëch, whose grandfather

 

 developed the VW Beetle, placed more emphasis on

 

spectacular engineering than exceptional profits. For

 

 example, he supported the money-losing Bugatti brand,

 

which VW acquired several years ago when Piëch was

 

CEO. More recently, Piëch championed the Phaeton,

 

VW’s luxury car that broke new ground in innovation (it

 

boasts 100 patents) but did not achieve commercial

 

success.

 

 Wiedeking, on the other hand, believed that VW

 

could be more profitable if it stopped producing the

 

 Phaeton and Bugatti. “Piëch sees his vision endangered

 

by Wiedeking,” says Dudenhoeffer. “Wiedeking said that

 

there are no holy cows at VW, no more Phaetons, no more

 

Bugattis.” These ideas made Piëch’s blood boil. “Anyone

 

who says that VW should pull the Phaeton doesn’t

 

 understand the world,” grumbled Piëch, explaining that

 

luxury cars represent the only segment with double-digit

 

growth.

 

 There is an unusual twist in the conflict involving

 

Piëch, Wiedeking, and Porsche. Piëch is a member of the

 

Porsche family. He is a cousin of Porsche chairman

 

Wolfgang Porsche and owns a 10 percent share of the

 

Porsche company. Piëch began his career at Porsche

 

and became its chief engineer before moving to Audi and

 

later VW. Furthermore, in what many consider a blatant

 

conflict of interest, Piëch supported Porsche’s initial

 

 investment in VW. But when Piëch’s and Wiedeking’s

 

plans ended up on a collision course, that initial friendly

 

investment in the partnership turned into all-out corporate war. “There was always a cease-fire between Piëch

 

and the Porsches, but now it’s war,” claims auto analyst

 

Ferdinand Dudenhoeffer. “This is like Dallas and Dynasty in Wolfsburg [the city where VW has its headquarters]. No company in the world is so self-absorbed with

 

its problems.”

 

Postscript

 

 Ironically, Porsche CEO Wendelin Wiedeking’s plans backfired. Porsche had borrowed heavily to acquire its controlling interest in VW while maintaining its own business

 

operations. Some estimate that Porsche had loans of more

 

than US$14 billion. Furthermore, VW shares increased

 

substantially during the takeover process, so Porsche owed

 

massive taxes for the increased “paper profits” of the shares

 

it owned. The timing couldn’t have been worse. The great

 

financial crisis hit the world, which cut Porsche sales and

 

dried up funds, making it difficult for Porsche to pay interest on its loans and to renew loans that were coming due. In

 

 effect, it was on the brink of bankruptcy. In addition, a

 

unique law allowed one German state (Lower Saxony),

 

which had a 20 percent ownership in VW, to veto any important decisions in the company, including Porsche’s control of VW.

 

 Ultimately, Porsche agreed to give up its controlling

 

 interest in VW. Instead, it sold some of its business to

 

VW  and the Qatar government and, ultimately, agreed to

 

be acquired by VW (rather than vice versa). Wiedeking lost

 

his job as Porsche CEO, whereas Ferdinand Piëch (as chairman of VW’s supervisory board) would effectively be head

 

of both automakers. Complicated legal and financial

 

 matters have delayed the complete acquisition, but VW

 

 effectively manages Porsche today.

 

 

 

McShane, Steven; Von Glinow, Mary (2013-01-01). Organizational Behavior, 6th edition (Page 341). Business And Economics. Kindle Edition.