The Investigation of Volkswagen's Entry Strategy in China's Car Market

MA MANAGEMENT DISSERTATION
XIAOFENG WEN
of labor in the organization.
3. Globally operating transitional company:
This period is between the 1980s and 1990s, Volkswagen began to shift more and
more from a simple multinational company to a globally operating transitional
company (Pries, 2001).
The changes happened in this phase relate to three dimensions, which are the product
structure & market strategies, corporate governance & profit strategies, and
production systems at both the headquarters and the periphery plants level. They
integrated new foreign companies and reorganized the overall corporate governance
structures. There is no longer a big fixed hierarchy between the centers and the
peripheries; the company searched for best production places and best practices.
They diffused knowledge among the periphery plants and the headquarters, although
the headquarters still owned the core strategic competencies such as R & D and
design, knowledge diffusion is much greater than before. They recently have opened
new plants as technical and organizational laboratories in the development of new
production systems and best practice principles. The strategic function of each plant
is to maximize the exploitation of all local idiosyncrasies and to optimize intra
consortium competition and learning processes (Pries, 2001).
Nowadays, Volkswagen has become a transnational car maker in real sense, and has
succeed with the most extensive and systematic transnational strategies in the world.
(Dicken, 2005).
4.23 VW’s Competitive Advantage
1. Leveraging international resources, assets and competences
VW has been trying to obtain access to cheap international resources through its
global production network; the group has 41 manufacturing plants in the entire world.
(Global Insight, 2006) The group has also built a brand portfolio that covers most
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