After successful 20 years, North American subsidiary of Volkswagen (VWoA) started seeing decline in sales. To propel sales, the company introduced the “Rabbit” and “Jetta” – both prompted short-lived recovery before plummeting sales to a lowest point again. Since senior executives perceived next round of new models as a remedy to mitigate sales issues, to break this cyclical pattern, VWoA introduced new platforms of “Golf”, “Jetta”, “Passat” and “Beetle”, which skyrocketed sales into the 21st century, established new brand positioning and allowed the company to compete with more upscale brands.
In the early 2000s, senior executives came to realization that organization’s focus was on small cars, however, mid-sized, Sports Utility and special purpose vehicles were undervalued, which resulted in need of portfolio diversification and shift of focus from traditionally produces segments to matching the global demand for vehicles.
Major IT issues:
1. Undervalued IT knowledge and long term outsourcing of IT functions
2. Lack of support and synergy in automotive sales and marketing business units
3. Issues with IT project prioritization and lack of attention to importance of the Supply Flow project
Undervalued IT knowledge and long term outsourcing of IT functions
With primary focus on marketing and selling activities, in order to reduce short-term costs, VWoA had outsourced and s...
... middle of paper ...
...ligned and enterprise projects were created, business units needed to re-prioritize their proposals. Additionally, each business unit had to identify three critical projects among proposed earlier that were aligned with NGR goals. As a result, several projects, had to be eliminated, due to less value to enterprise goal achievement and some business units challenge the value of the new process for selection and prioritization.
Implementing the new strategy was a difficult task for Mutlovic, due to outdated IT architecture and budgetary constraints. Furthermore, poor decision to outsource IT in 1990’s fired back in 2000s when substantial IT investments were needed. And last but not least, Executive Leadership Team feared that IT department would drive business strategy, which on the contrary should work closely together to evaluate key issues facing the business.
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