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Volkswagen Case

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Volkswagen Case

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The decision that Volkswagen made was a strategic decision. The implementation of VWgroupsupply.com and IPAD concerning supply chain management of both direct and MRO materials is a major initiative in the company’s information technology. The implications of this decision will have an effect on how the business is run, both strategically and tactically. Due to the widespread nature of this decision, it was likely made at the executive level.

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The advantage to Volkswagen developing its own B2B site is that it streamlines the process of acquiring parts for the vehicles and managing the associated activities. This allows the employees to spend more time performing strategic actions such as negotiating better prices with the suppliers rather than the tactical management of parts. This system, presenting all info in one dashboard, allows the managers to make better decisions to give the firm a competitive advantage. Volkswagen chose this to the alternative of using a system that is currently on the market. Although purchasing and using currently available systems would have had lower start-up costs, the time saved by creating a single, customized system outweighs the additional start up cost in the long run.

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This marketplace helps Volkswagen reduce Porters threats to competitive advantage by reducing the bargaining power of suppliers. Volkswagen will be able to access all available products and prices in one database and dashboard giving them the power to negotiate with full information. All options will be readily available. The suppliers are forced to use the database, putting the power in the hands of Volkswagen. The generic strategy used by Volkswagen is that of ‘Differentiated Product’. Their products fulfil the same core functions as their competitors, but are also clearly different. Volkswagen combines brand, design and...

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