Sample Essay

1)      Automobile industry was once a booming industry in the world and it has progressed through leaps and bounds. In the current era certain companies are progressing in this industry however there are certain organizations that are facing difficulties in this industry due to industry regulations and environmental hazards. In general the industry is facing difficult situations because of the slow demand and the tight rules on emission that are laid down by European regulators.  The demand is decreasing on luxury items therefore the automobile is facing the turmoil. As far as Volkswagen is concerned the company is facing same issues and experts believe that company might face difficult circumstances in the current era. As far as the automobile industry is concerned Volkswagen is treated as the European market leader.

The competitors of Volkswagen are Peugeot and Renault. The biggest external challenge the company is facing is the high cost of labor and they are working hard to reduce the labor costs by making the workers work more in the same cost. The competition is getting fierce and Volkswagen is facing problems with the workers because they believe that their bargaining power is relatively high and due to inflation they want more wages. These issues are serious threats to the company in both the short and the long run.

2)      The rising issues of Volkswagen are high labor costs, lack of demand, environmental issues, bargaining power of the workers etc. A forward looking approach must be developed organization in order to deal with these issues. The external analysis of Volkswagen depicts that issues like high labor cost and bargaining power of the workers are the threats to the company. However, lack of demand and environmental issues can be a viable option to penetrate in the market. Demand can be created amongst the consumers through proper branding and brand activation strategies. Positioning a positive attitude in the minds of the target consumers would definitely generate demand among the consumers. Demand can be created through number of options and this is definitely an opportunity for Volkswagen. Effectively dealing with environmental issues can develop a positive frame of mind amongst the consumers. Developing cars that are free from emissions is definitely an opportunity for the organization and the company can cash on this issue and can treat this issue as an opportunity. High labor cost is a threat to the organization because company can’t reduce it due to the rising trends of inflation. Similarly worker unions would intervene in these matters and they might stop working for the company on low wage rates. Therefore, these issues are the concerning ones for Volkswagen.

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