They are investing in foreign countries to explore potential resources existing in these nations. They use innovative business strategies to enhance the profitability of business and quality of products and services offered to the customers. Undoubtedly, this improves the competitive advantage of the company and helps it to acquire a competitive position in the market.
To develop a better understanding of globalisation and its impact on contemporary business environment; an in-depth analysis of business environment of China will be conducted. This analysis will help to identify the motivational factors as well as the obstructions faced by the international company. This analysis will also assist in understanding features of national innovation system existing in China’s automobile sector which help to attract high amount of foreign direct investment. And finally, the strategy to be followed by Volkswagen will be discussed to introduce innovation in the existing business process.
This report basically discusses the globalisation strategy to be selected by one of the well know international brand, Volkswagen for expanding its business. The company was established in 1937 by the Nazi trade union in Germany. The term “Volkswagen” means “peoples car”. With time, the company diversified its market and became an international brand (Volkswagen). As per the market data, Volkswagen has a dominant position in China. In the second quarter of 2010, China was the most profitable market of Volkswagen (Cremer, 2010). The data published by the company reflects a sharp increase of €172m in operating profit during Q3 in China market (Schäfe, 2010). From January 2010 to September 2010, the company performed well in China, registering a stupendous growth both in terms of volume and profitability. In the last three quarters, Volkswagen sold 1.48 million cars in China; a growth of 39 percent on y-o-y basis. This