India is a country in South Asia which is the seventh-largest country by area with the next most population country with over 1. 2 billion of people. Discussing the India current economic climate, it's the world tenth largest GDP with average gross annual GDP expansion rate of 5. 8% and getting about 7% during 12 months 2000-2007 (UKessay. com, 2011). Besides that, it was also with the third largest purchasing power parity. Therefore, India became one of the quickest growing economies all around the worlds. As 12 months 2015, India purchasing ability is predicted will be the 3rd largest on the planet which after China and United Condition. (Dr Jagdish Sheth, 2011). Through the economy belief view, India was a great market for Volkswagen in long term as the growing of the current economic climate is rapidly 12 months to calendar year. Therefore, the household spending electric power is also alongside one another growing and has about doubled calendar year over year, which means the majority of the Indian find a way to purchase the luxury product. (UKessay. com, 2011)
Volkswagen had joined into India market in year 2007, the reasons that Volkswagen steps into India is because the growing potential of the auto market, In November 2009, they launched an integrated marketing campaign to conditioning the brand image. The task marketing campaign ends with conversations on the growth prospects of the business future. They can be targeting the abundant of Indian rural area because they had determined that they huge market are present in the rural sector in India and they be capable of buy an extravagance brand vehicles. (Partha Masanta, 2011). A surging economy and vehicle sales in India boom in 2010 2010, India possessed ahead lots of the growing country like Japan, Brazil and UK, and they're lagging and then China. ( TimesOfIndia, 2011)
Other than that, the large population growth of more than 20 million per year and the increasing living standards are two important signals that logically lead to an increasing demand for automotives in India. Therefore, the increasing in the living standard and people were the best reasons that attract Volkswagen steps into India to seize the sales of luxury brand vehicles from the customers with different living standard from premium classes to lessen classes since when the living standard is rising, the car is the position symbol for everyone, therefore, many people are demand an improved position of car like Volkswagen instead of Honda that is too common for everyone. The another reasons Volkswagen steps into is the amounts of individuals increasing as living standard increase, number of women driver increase, therefore, the better car technology is demanded like Volkswagen. (Ejvind Vogg, 2012)
India is currently one of the larger markets in the automotive industry and have been one of the fastest growing in conditions of economy on earth. Major big companies such as Honda, Mercedes Benz, BMW, Mitsubishi had already extended their businesses into the Indian car market. Volkswagen Groups had proven the Volkswagen Group Sales India Private Limited in India in the entire year 2001 to expand their businesses in to the Indian market.
Advantages of coming into India market:
Lower Cost of Production
In India, the expense of selecting labor is relatively lower in comparison to other countries. Average pay in India are almost less that 50% of pay in developed countries. This is due to a huge number of individuals in India who are residing in poverty in India. Most of the people in India are willing to take the work at lower pay as long as they are employed. Because of that, it decreases down the expense of creation of vehicles in India. Volkswagen Group will take the good thing about the lower production cost to sell their vehicles in India at a much lower and affordable price when compared with other automotive companies. This escalates the demands for Volkswagen vehicles in India and further escalates the income and revenue made from the increasing demands.
Generate High Income
Studies have discovered that there are a huge number of folks in India who are living in poverty. However, there's also a huge and growing number of people in India that happen to be categorized as middle class people. These middle class members command salaries between five and ten times the nationwide average. A lot of these individuals work in medical industry which is one of the key industry in India and are benefitted from pay raises per year. The India federal quotes that some 300 million individuals make up the center category people. By entering into this market section, Volkswagen Categories can make high income and further increases its revenue as Volkswagen can offer low price vehicles which these middle income people can afford.
Promote Welfare of Society
The unemployment rate in India is high. Volkswagen Teams market enlargement to India has contributed to minimizing the unemployment rate in India. Job opportunities for blue n white scruff of the neck workers receive to the population. The salary for these staff are also lower in comparison to other fast growing countries which lead to lower cost of development and dangers. With less expensive of development and risks, the business can create high income and this will attract foreign and local shareholders to purchase the business. Thus the marketplace expansion gives the firm a win-win situation where in fact the company advantages from the income generated and the society benefits from the job opportunity given.
Volkswagen Group has competitive gain in India over other vehicle companies. It is because Volkswagen Group can take advantage of the low cost production in India. Lower labor pay and lower priced resources added to the reduced production cost. Besides that, Volkswagen Group possesses a manufacturing plant in India which is with the capacity of producing in a big scale. Allowing Volkswagen Group to sell their car in a much lower price when compared with other car companies. The business has documented a sales progress of over 1000% in the entire year 2010. Which means that Volkswagen is highly demanded in India and has become popular among the Indian consumers and therefore, providing Volkswagen a competitive benefit to contend with other car companies in India.
Disadvantages of entering India market:
Cultural incompatibility is one of the troubles can be found in the India market as the culture that they practices are different from others. They could still practice their traditional social worth and desire to keep the unique relationship with it so it makes it a barrier for other country to adapt to their ways. Cultural incompatibility comes in the way of doing business and their idea. Different people have their own means of doing business so that it helps it be hard for other folks to follow and adjust to them so downside will occur. For instance, India might still use the original way of doing businesses and the other countries already adapting to the modern era so the cultural incompatibility is seen. The Indians expectation of work quality is completely different so there is a challenge to work with them. Besides that, they may have their own perception which will vary from one another so when one bring their own notion to converse or practice typical then misinterpretation or turmoil might happen.
Language is also another shortcoming to enter into India although the majority of them can communicate in English dialect but there continues to be a barrier whenever travelling overseas including the way of communication, the language dialect that makes people hard to comprehend although they are using proper terminology and there is also a misconception that Indians do not talk fluently in English so it relatively becomes the disadvantage to enter India market. As the words hurdle occurs, difficulty of overcoming the language barrier will happen so to hire a translation service might be costly as well and it creates it even hard to execute the business between each other.
In addition, cons might occur when there are myths or belief from people that Indians are not time mindful and does not adhere to deadlines which are the most crucial key of doing business and it will indirectly converts people away from working together. There is also a myth they are bad at job management this means they cannot take care of the task well so to cooperate with them is a real hard issue.
In competitive and troublesome monetary times like these, less priority is placed on retention for many companies because they are more give attention to more-immediate business concerns. There is a increase in the number of employees departing their companies when the marketplace conditions improve and even more job opportunities are open up. It is very important for an organization to get serious about retention now by giving employees opportunities to take on heavier responsibility, broaden their skills and cultivate a network of romantic relationships.
Volkswagen, the German auto company should place a solid emphasis on the similar opportunities. All staff hope to be treated reasonably. They need to know that if indeed they work hard they'll be rewarded by the business. It is very important to inspire your staff, because if it is not he or she would believe that even if they put in the effort they could be forgotten because of discrimination. Differences in ideas, perceptions, and attitudes that in the global overall economy of today is essential to generating progressive ideas. To be able the company to remain competitive or the other words agile enough to change, different methods to problems and situations have to be created. Thus variations should be embraced to the companys benefit.
Moreover, to expanding their leadership abilities, employees want to increase their value by acquiring knowledge of the procedures outside their areas of expertise. Volkswagen can come out with a special training to recognize and strengthen strategic key competencies. By applying the training, Volkswagen can go after its goal of reaching transparency in terms of requirements and future-oriented skills acquisition. New employees who show potential might be admitted into this elite circle where they'll be given a great deal of exposure to different departments and levels of hierarchy.
Tuition reimbursement techniques should be provided by Volkswagen. These techniques are meant to encourage employees new and old to update themselves. The company wants employees to become better skilled, more professional and they are willing to support them to achieve that. With all the tuition reimbursement after graduation employees who are better informed would want to get back to these businesses willingly because they will believe that the company values them. This sort of motivation becomes a solid connection that ties the employees to the company. And with more robust ties you can be reassured that output will definitely improve.
Furthermore, Volkswagen can also come out with an investment and savings plan as well. When the business shows such matter for even the financial health of its employees, staff will feel even more indebted with their management again spurring them to work harder. Finally, cultivates marriage. Networking is important to employees for few reasons. It establishes the cable connections that are helpful in searching a fresh position. Networking helps a company, not only by improving retention but also by enhancing the understanding and cooperation among the many business units.
The one obvious competitive advantages that Volkswagen has in comparison to their opponents is low priced production and the best way to maintain this competitive advantage would be to adjust to technology changes on the market. Each day there are new technologies out there that will help improve the creation of their vehicles. By adapting to them, not only they are able to reduce their cost of development, they are also able to increase the efficiency of their production process. This may eventually provide them with another competitive benefit over their competition and stay ahead of their competitors on the market.
Volkswagen have a good competitive gain through this season but gleam bad side of Volkswagen which customer that purchased will not feels satisfied with Volkswagen after sales service and quality of the vehicle. One of the goals approaches for Volkswagen is to deploy wise innovation and solutions to be world leader in quality of product and customer satisfaction . However there may be some bad review that may be found easily which is complaining about second-rate part off their vehicle compared to Europe market. It is known as Volkswagen Hate Club which highlights some issue through owner of Volkswagen . Furthermore there can be an article regarding customer service index on year 2012 and this article show that Volkswagen positioned in important thing . Volkswagen should improve their customer support and their quality of their vehicle in India. This is important to preserve customer from moving over to competition brand. Satisfied customer generally will repurchase their brand when there is certainly new model released because when they feel customer support is good, they comfortable and tend to be loyal. Customer service that not solve problem come across by vehicle owner will spread negative person to person and certainly would impact the brand which impact other consumer never to buy Volkswagen.
Volkswagen own a manufacturing facility in India and may produce their vehicle with lower cost therefore they shouldn't lower their vehicle price, as a low price vehicle generally give consumer a notion of poor. Volkswagen should established a standard of price that will not go too low beyond and commence to improve quality of the automobile. Beside, on the nice side there is certainly Volkswagen Fans Team that provides information and shared among Volkswagen vehicle owner . A lot of the owner could be referrer when they are satisfied with Volkswagen. There would be positive and negative information about Volkswagen could be on the enthusiast site. Therefore Volkswagen could improve client satisfaction by start a community forum for customer and assist them if customers face some trivial or significant problem. Through community forum, customer could post picture almost and get better view in comparison to on phone customer service which operator could not see the condition well by listening to customer problem.
In conclude, Volkswagen had moved into India in yr 2007 and got a good consequence for Volkswagen in India plus they had achieved a very good sales, it shows a rise for Volkswagen in India since 12 months 2007 and got a steady growth plus they be match in power with others luxury vehicle brand. Besides that, the client purchasing power provides a good illustration of the expansion associated with an India, and it appear to be the speediest growth on earth, which means it's the right time for Volkswagen to steps into India.
Besides that, regular of passenger cars in India has risen year to calendar year due to the rising of living standard and this implies that it is an chance of Volkswagen. In yr 2007, India was on producing and counted as on growing country, thus, the reach of Volkswagen in India experienced provided the job opportunities for the rural. Volkswagen kick off Volkswagen training academy, own a manufacturing plant and many others new initiatives, this purposely is to strengthening the Volkswagen in India. Volkswagen keep changing and launching new brand of vehicles to fulfill and hold on to their customer in India.
There are some suggestion that we had designed to against ethnical incompatible, languages, costs, and characteristics of Volkswagen in India, therefore, they need to take serious about the prevailing problem, complaint from customers and make a much better improvement for an improved future for Volkswagen in India. Last but not least, Volkswagen experienced made the right decision to enter India at the right time and had chosen the right place.
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