LOVELY PROFESSIONAL UNIVERSITY

Name of the student: Anmol Sihag

Registration Number: 12213702

Roll. Number: RQ2218A16

Section: Q2218

Course Code: ACC301

Course Title: MANAGEMENT ACCOUNTING

Academic Task No: 01

Date of Allotment: 04-02-2024

Date of Submission: 19-02-2024

Maximum Marks: 30

SCHOOL OF: MITTAL SCHOOL OF COMMERCE AND MANGEMENT

NAME OF THE FACULTY: DR. NISHA YADAV

DECLARATION:
I declare that this assignment is my individual work. I have not copied if from any
other students work or from any other source except where due acknowledgement
is made explicitly in the text, nor has any part been written for me by any other
person.
 Volkswagen Group

Company Profile
Volkswagen, often abbreviated as VW, is a renowned German automotive
manufacturer that stands as one of the leading and largest car producers
globally. Established in 1937, Volkswagen has built a rich legacy in the
automotive industry, consistently delivering a diverse range of vehicles
that combine innovation, performance, and iconic design.
The company's commitment to quality and innovation has made it a symbol
of reliability and excellence in the automotive world. Volkswagen has a
comprehensive product portfolio that spans across various segments,
including compact cars, sedans, SUVs, and electric vehicles. With a global
presence and a strong emphasis on sustainability, Volkswagen has been at
the forefront of developing eco-friendly technologies, evident in their
electric and hybrid vehicle offerings.
Volkswagen's dedication to safety, cutting-edge technology, and a
customer-centric approach have earned it a loyal customer base
worldwide. Beyond its commitment to producing top-notch vehicles, the
company also places a strong emphasis on corporate responsibility and
environmental sustainability, aligning its operations with the evolving
needs of society.
As a pioneer in the automotive industry, Volkswagen continues to shape
the future of mobility through its forward-thinking initiatives and a
relentless pursuit of excellence, ensuring that it remains a driving force in
the dynamic world of automobiles.
Vision
This organization's vision statement aims to begin global portability
improvements through its products. The following segments are included
in the announcement:

• Reaching a global audience

• Increasing adaptability and maintainability

Through its expansion, VW has proved its ability to touch people all around
the world. These German gadgets are now available in almost every corner
of the globe. They are also modified to the diverse situations, allowing VW
to satisfy the demands for mobility and maintainability irrespective of
where the cars are used.

Mission
The study is done in two different ways based on the two sorts of goals that
Volkswagen has, while having an environmental mission statement but not
a direct one:

• Analysis of Overarching General Objectives

• Environment Analysis of the Mission Statement

General Objective Analysis

This organization's goal encompasses everything the company undertakes

to achieve its vision. Its main focus is on maintaining a level of quality that
outperforms all other competitors in every way. The following are the
important sections of the announcement:

• Well-known quality
• Exceeding expectations

Volkswagen's mission statement illustrates the fundamental rationale for

why it has remained at the top for further than 80 years. All cars have been
meticulously designed to provide the finest possible driving experience.
The Atlas Cross Sport and the Arteon, for example, are likely the latest
models that any customer would require.

Analysis of the Environment Mission Statement

Changes in the environment: Volkswagen is focused on adhering to the

United Nations' Paris climate agreement. By 2050, the goal is to become a
CO2 – independent financial institution Volkswagen intends to create an
example for a cutting-edge, simple, and successful organization by
introducing and testing feasible management frameworks that extend the
natural impacts of its flexibility methods over the whole life cycle stages.

Business of the company

Audi

Bentley
 Skoda

Lamborghini
 SEAT

Volkswagen Beetle
 CUPRA

Management of the company

Board of Directors
Competitors
• 1. Honda
• 2. Toyota
• 3. Nissan
• 4. Chevrolet
• 5. Fiat
• 6. Mitsubishi
• 7. Maruti Suzuki
• 8. Tata Motors
• 9. Skoda
• 10. Hyundai
• 11. Volvo
• 12. Ford
Comparative Balance Sheet :
Common Size Balance Sheet
Strategic Plan Analysis
Report

Past strategic choices of Volkswagen Group

The company’s past strategic choices made include; Developing new state-of-
the-art products, increased innovation, enhanced the R & D department,
increased partnership, and acquisitions, improved marketing efficiency, and
aggressiveness, and expanded to the international market. Volkswagen Group
has implemented these strategies to help the company overcome the issues
that arise from Porter’s Five Forces. The European market demands smaller,
more fuel-efficient vehicles. The company has risen to meet this challenge in
its manufacturing facilities. The fifty-percent growth rate in sales Volkswagen
Group experienced between 2003 and 2008 precipitated the need to initiate
new strategies to maintain and continue growth. Volkswagen group had to
face Porter’s force of rivalry among competing firms. One way Volkswagen
group was able to overcome a bit of the competition was collaboration and
realizing new brands to the market.

Their sales took off significantly between 2003 and 2008. An estimate for the
future showed the Volkswagen group was anticipated to reach sales goals as
high as 9 million units in 2008. The company’s concern during this period
wasn’t so much Porter’s forces of the threat of new entrants or rivalry among
competing firms (Ackoff, R. L. 1979). The company was determined to
become customer-focused in its efforts to reach a point of dominating ten
percent of the global portion of the market by 2010.

During the past five years, Volkswagen group made strides in the European
market with its green technology in the production of cars. Much of the
competition had only just begun to design hybrid models. They used the
emotional impact of customers surrounding beliefs about “green issues” to sell
hybrid cars. This gave them little cause to worry about substitute products or
services coming in to override their launch into the hybrid market. They were
one of the first to launch into the market giving them a competitive advantage.
Also, Volkswagen group expanded its manufacturing facilities to ensure
growth in sales. The first Volkswagen group manufacturing facility in China
was completed over the same period. Within three years of opening the
facility, Volkswagen group had expanded plant operations throughout Asia.
They had increased production from 200,000 cars produced to 500,000 cars
produced by the end of the third year. Also, Volkswagen group had expanded
into producing cars in India and Africa by the end of three years. The company
has struggled with its image for the large expansion. They have been trying
not to appear as a “European invader” in the Asian market.

The company systematically opened a new plant four times between 2003
and 2008. In 2005 a Volkswagen group car plant was opened in China
scheduled to produce 500,000 cars per year. Also, three plants were opened
before 2007. A petrol engines plant was opened as well. Mini-cars have been
another strategic market Volkswagen group has expanded in through Europe,
America, Asia, and Africa.

Also, in setting pricing they made efforts to gain interest for young people
between 18 to 30 years old. Financing was made fairly easy since interest
rates were set according to a buyer’s age. Additional money and effort were
put into training sales associates to target this age group. Most sales
associates had dealt with a much older crowd.

Current Strategies
The key reason for the success of Volkswagen is that they have focused on
their weaknesses and threats and trying to minimize them however threats
related to the economy and competition remain a major factor in Volkswagen.
Therefore it is continuing to offers products and services to consumers at
competitive prices and also recruiting new customers to gain market share.
Horizontal integration between departments and managers such as moving
experts to its underperforming operations to turn it into a profitable business
unit (Weitzel, W. & Johnson, E. 1989).

The current strategies that are used by the Volkswagen company in their
success include diversification of its products to meet the needs of customers
in all the countries they operate. another factor or strategy is the expansion of
its product base in the countries they operate in as well as reducing cost by
outsourcing their business activities to make them remain competitive. In
selecting these strategies the company has the following suitability, feasibility,
and acceptability (Johnson G, Scholes K, and Whittington R, 2008).

There is the number of suitable strategies mentioned above which will

increase Volkswagen group markets share as well as revenues to maintain
return on capital employed. The winning strategies should be Joint Venture,
acquisition, and expansion as well as technological investment. This will
minimize the risk and meets the criteria of suitability, acceptability, and
feasibility (Johnson G, Scholes K,a and Whittington R, 2008).

Volkswagen group have been growing at a faster rate therefore they need to
grab the opportunities that will provide them additional benefits. Joint-venture
or acquisitions in countries such as India, China, South Africa, and Brazil
where the economy is booming will provide long-term benefits.

Although Volkswagen cars have been increasing its customers due to the
research and development carried out by the company, their rivals are
performing even better therefore they should merge with other manufacturers
to increase their profitability and market share. And by implementing this
strategy they will not just gain market share but also gain experience in the
Indian, Chinese, and African markets which will provide the first step towards
a successful future of becoming a successful company in those countries
thereby increasing profitability.
Risk Management

Companies take risks. That is part of every business activity. The important
thing is to deal with them responsibly. We are convinced that only those who
identify opportunities and risks at an early stage and actively deal with them
will achieve sustainable success.

Our risk management system focuses on corporate and divisional goals. We

manage risks in our business processes with the internal control system. Both
systems are based on the internationally recognized COSO framework. In this
way we aim to cover all areas of risk as comprehensively as possible. To this
end we operate a risk quarterly process which focuses on acute risks. We
keep an eye on process-related risks with the annual standard ICS control
process. The business continuity management system provides the
framework for continuing critical business processes in the event of
disruptions.

Our principles help us to deal with risks in a uniform manner throughout the
Group:

• Integrity, corporate values and compliance are particularly important.

• Risks are to be dealt with actively and openly.
• The orientation of the RMS/ICS is based on individual objectives.
• Risks are to be consciously taken and appropriately managed.
• The RMS/ICS must be effective.

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