Abstract
Chinas automotive industry growth reflects on China's economy, with it being one of the most dynamic and promising industries in the country. Volkswagen Group entered the Chinese economy thirty years ago, and therefore played an important role in shaping this industry. After giving the reader a quick overview of the current Chinese economical situation and its implication on the country's automotive market, this paper will examine Volkswagen Group's immediate industry and competitive environment before evaluating its related diversification strategy and cross business strategic fits along the value chain. In particular, this paper provides a study of the competitive strategies that the Volkswagen Group implemented to gain a sustainable competitive edge and become the market leader worldwide, including in China.
To remain a leader in the global market, Volkswagen Group's success story is one to be told. Volkswagen Aktiengesellschaft, often abbreviated to Volkswagen AG (VW AG), is the parent company of the Volkswagen Group; according to IHS Automotive, the biggest automotive manufacturer in 2011, with 8.44 million units sold1. Volkswagen hereby, has surprisingly soon, surpassed its two key competitors: General Motors and Toyota, both respectively number 2 and 3 in the world.
