Volswagen in the United States Case study Essay

Volswagen in the United States Case study - Essay Example The purpose of this paper is to analyze Volkswagens American operations, examine the effects of globalization on Volkswagen, and to describe the strategies that Volkswagen has developed in order to improve its position in the US. The paper is divided into three sections. The first section provides brief literature review on globalization within the context of the automotive industry wherein VW operates. This will be followed by background information on Volkswagen’s global operations, with a particular emphasis on its operations in America. The second section discusses globalization and the issues affecting Volkswagen with respect to its promotion and distribution strategies. The final section explores the international structure most appropriate for VW based on its current position in the world market. At its most fundamental, globalisation refers to the world as one big market and source of information. It is characterised by a free flow of goods, people and information around the world, an internationalization of economic processes and the emergence of world markets (Lemoine, W. and Dagnaes, L., 2002). Consequently globalization has given rise to new concepts such as global industries, organizations and strategies used to market and sell global products, brands and services. A global industry has been defined as ‘an industry in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall operations’ (Porter, 1980, p.275). The automotive industry has been recognized as a global industry in the sense that business activities or transactions made by a multinational automotive enterprise would not likely follow the business model from its host country. Shimokawa (1999) pointed out that these activities would include: On the one hand, an organization may generally be considered as global when it ‘operates in more than one country and captures R&D, production,

Public Policy Initiative Essay Example | Topics and Well Written Essays - 1250 words

Public Policy Initiative - Essay Example Another important factor is the rapid population growth which contributes more to the economic problem of scarcity and towards the selection of a public policy that has to fairly deal with all the related aspects. The next major aspect to be considered while designing a policy is the context of job development in the ever increasing global society. This containment should not only fulfill the white collar attitude instead it should look forth on a relatively larger scale thus improving upon efficiency and equity. The main critic on this approach is that in a perfectly competitive environment there can be a case that a firm might enable itself to drive away all other competitors thereby becoming a natural monopoly is an exception owing to the absence of the required many sellers that would set the so-called invisible hand of competition in motion1. To our concern and knowledge Adam Smith's laissez faire theory relies on this hidden hand to attain efficiency in markets. Why it is important is just because in an ideally competitive economy every firm tries to maximize social profits i.e. the concept of deriving maximum utility out of each resource or profit maximization, this could be called as the net benefits consumers and producers receive from participation in markets. Why to support Weimer and Vining is because there are a number of factors that make the Free Market approach much more effective than (government) regulated markets. They are; Production-motivation/Capital-attraction this means that there are just adequate monetary remunerations that make these economic agents to fulfill the customer demand at a desired price and this is well termed as the production-motivation. Through this approach, the supplier tends to keep on producing the desired product and eventually he tries to expand the scale for further remuneration thereby adding more to his incentives for profit maximization that is achieved by "economies of scale". Efficiency2 ensures that goods & services are provided at the lowest possible cost. Again, the concept is that the supplier tries to minimize cost and maximize sustainable profit. Demand Control & Consumer Rationing is essential to avoid waste of resources, this means that the market system can effectively limit consumption by individuals and only those who can afford enjoy the fruits. But this well leads to a failure as well because the market system fails to provide with some necessities that are termed as public goods as these do not provide with any fruitful remuneration to the producer so they are avoided within the market constraint. The rationing mechanism however allows the level of prices to achieve what economists call as the only real economic function of prices that have the ability to influence the