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Story of KMART & Wal-Mart How did Wal-Mart founder Sam Walton and his managers formulate and implement strategies that helped the company overtake Kmart If you were stepping in as Kmart’s new CEO, what strategies might you adopt to help chain survive? It is a process to help managers answer questions such as where is the organization now Where does the organization want to be What changes and trends are occurring in the competitive environment?
Global Strategy Companies might pursue a separate grand strategy as the focus of global business How to compete internationally?
Value Creation Value can be defined as the combination of benefits received and paid by the customer Exploiting core competencies & attaining synergy help companies create value for their customers A product that is low in cost but does not provide benefits is not a good value Delivering value to the customer should be at the heart of strategy Managers need to understand which parts of the Co. Corporate Level Strategy The level of strategy concerned with the question What business are we in?
Function Level Strategy The question How do we support the business level competitive strategy ?
Finally, the auto industry is having to deal intensively with the issue of climate protection.
The issue at stake is how the average limit value of 130 grams of CO2 per kilometer is to be best achieved. The important thing for us is that the premium manufacturers, in other words the strong brands from the German car industry, should not have to bear the entire onus on their own. Not only would this be a questionable industrial policy, it would also be ecologically counterproductive.
However, while at EU level efforts are being made to ensure a fair burden, some European countries have introduced CO2 taxes as they see fit.
For example I would like to see the specific product development and life cycles of the automotive industry taken into account.
The German automotive industry has done its homework on climate protection, and Audi has been more studious than most. And we do not need a new brand claim in this respect, as “Vorsprung durch Technik” is not a marketing slogan, but a deeply ingrained commitment. For instance, an Audi today uses 36 percent less fuel than it did in 1990 to develop 1 kilowatt of power and therefore 1.36 horsepower.
Our TDI will become the cleanest diesel engine in the world this year, thanks to its ultra low emission system. Our new products furthermore demonstrate again and again that efficiency and sportiness are not mutually exclusive. This is despite the fact that we launched our strongest model, the new A4 Avant, on the German market just two weeks ago. Since January 1, 2008 the employee total for the Audi Group has been 56,496 and is therefore 6.8 percent higher than at the same point in the previous year.
Revenue for the first quarter was only marginally below the previous year’s outstanding level, at almost EUR 8.3 billion, despite the adverse effect of exchange rate movements.
Meanwhile the Audi Group increased its operating profit by an impressive 28.2 percent to EUR 514 million, mainly thanks to the improved model and equipment mix and the ongoing optimization of product costs. International press representatives were able to test-drive our new A4 Avant on Ibiza last month. This performance SUV has been greatly awaited all over the world, and I am convinced that we have yet again delivered precisely the product that our customers want. The media and customers have also given an enthusiastic response to the Audi A3 Cabriolet, which arrived at many German dealers last week for test drives. We have been rolling out the RS 6 Avant in markets since April – the most powerful production model that Audi has ever built. The journalists are currently busy testing the new Audi TTS and Audi TT TDI at a dynamic driving presentation in Munich. And anyone who attempts to find something comparable on offer from the competition will be searching in vain!
It has long since become routine for Audi to leave awards ceremonies clutching an armful of trophies.
And the A4 earned the title of “Germany’s Most Popular Car” in a reader poll conducted by over 100 regional weekly newspapers. Audi again fared outstandingly in the recently published ADAC breakdown statistics for 2007.

We are constantly investing in innovative technology in order to carve out an even greater competitive advantage.
For instance with our new seven-speed S tronic dual-clutch transmission, wholly developed by the brand. We will shortly be bringing our new third-generation Multi Media Interface MMI onto the market.
We are actively promoting research into car-to-car communication and intelligent traffic guidance systems. We also aim to enhance vehicle safety through another innovation that we are currently working on.
We have become the first car manufacturer in Europe to adopt a new presentation technology – of digital cinematic quality – in Technical Development. In opening our new climatic wind tunnel, we have once again redefined the benchmark in order to assure top quality for our products. The tunnel allows us to test cars under realistic, natural conditions in icy cold or blazing heat and with wind speeds of up to 300 kilometers per hour.
This investment also helps us to continually improve the drag coefficient of our vehicles and thus to enhance their fuel consumption and eco-friendliness.
In March, we inaugurated the new engine testing center at Audi’s Neckarsulm plant following its successful trialing.
To do this, our sales strategy will include putting exclusive dealerships in large metropolitan areas around the globe.
Expanding our dealer network in dynamic growth markets such as China and India is of strategic importance for us. Here are a few examples of new locations in China, which we will be realizing in the course of this year. Given the current value of the dollar, we stand to benefit tremendously from having our own local production facilities.
Allow me to summarize: In 2007 Audi again achieved record figures in terms of vehicles sold, revenue and profit.
And countless innovations will help us expand our “Vorsprung durch Technik” when it comes to efficiency.
Despite the wide many different external challenges, we look to the future with confidence – Audi is, after all, a strong, successful, forward-looking brand. A basic question confronts the managers of any org that competes in more than one national market: To what extent should the org customize features of its products and marketing campaign to different national conditions? Strotbek has shown, Audi is in a very good position to tackle the challenges of the future. This year, the euro has already exceeded the level of 1.60 dollars – whereas back in 2002 one euro cost only 86 US cents.
In some instances this is done so as to ensure that their own industry suffers as little as possible. We look at our entire vehicle fleet when seeking to boost the efficiency of each individual model. Investments in new generation of engines, with TDI and TFSI, with turbocharging and Audi valvelift system (AVS) Aerodynamics and design DL transmission technology, based on the modular longitudinal platform Hybrid technology with the goal of driving using electric power. This increase is mainly due to the fact that the Brussels plant and its 2,200 workers are now included in the consolidated figures. We manufacture our cars to suit our customers, tailoring them like made-to-measure outfits. Over 550 journalists from almost 30 countries tested out this gem of a new car – and were deeply impressed. This emotion-packed product increases our presence in the SUV segment, in which we have been operating very successfully for the past three years with the Audi Q7. The order books are brimming, and this convertible will give further impetus to our successful A3 model family. Audi has opened up a new chapter of diesel technology in unveiling the first twelve-cylinder diesel engine in a high-performance roadgoing sports car. For instance the Audi R8 won a double victory at the “World Car of the Year Awards” that coincided with the New York Auto Show.

We are attracting more customers from other premium brands than we lose to them – and we have the youngest customers in the premium segment.
It will offer a wide range of attractive new features, such as a three-dimensional navigation view of buildings and routes.
This is an area in which we can contribute a great deal towards safety, traffic flow and climate protection. Driver monitoring, based on detection of eyelid closure, warns the driver as soon as they become tired or even experience micro sleep.
It is possible to analyze our future vehicle models realistically and in detail in the design check and the Data Monitoring Centre at our Virtual Reality (VR) Studios even before they have been created.
We are also currently investing over EUR 17 million in a new toolmaking shop, again in Neckarsulm. This is evidenced by the founding of an association to promote the development of the Ingolstadt region in tandem with the city, the district authorities and other companies. And we will exploit our growth potential to the full in existing and above all in new markets. To that end we are sounding out options for cooperating with Volkswagen on the construction of a new plant. Until now, the growth that we have seen throughout the world has not translated into growth on the U.S. And the oil price has doubled from 57 to around 114 dollars over the course of the past year alone. We will implement further internal engine modifications which will help to reduce fuel consumption in various model lines by as much as 18 percent in 2008.
The year-on-year comparison shows that sales of Audi vehicles have reached a new record level and again generated excellent profits. Incidentally, the sales figures for the A3 Sportback and the three-door A3 for the period January through March were up yet again by 2.5 percent, to 62,021 units. Among other things the fenders, the single-frame grill and the exterior mirrors have been modified.
This 170 hp TDI engine consumes an outstanding 5.3 liters of fuel per 100 kilometers and has CO2 emissions of just 139 grams per kilometer. The low level of friction boosts efficiency and thus cuts consumption by around 0.3 liters per 100 kilometers. Virtual tracking shots around the exterior and through the interior of the car allow engineers to accurately assess the vehicle geometries developed on the computer. Its aims include promoting innovation in research and development throughout the region, and enhancing its appeal for visitors and prospective residents and employees. At the same time, we realize that the automotive industry faces challenges from external sources and that these challenges have become much stiffer this year. But I hope that our decision-makers are aware that our vehicles are on average over eight years old and that customers are currently showing no interest in buying because they are unsettled. Overall, this will bring our fleet emissions down by an average of 10 grams of CO2 this year. But its dynamic handling was also very well received, as is evident from various articles and TV and radio features.
Audi will be introducing the new S tronic into multiple model lines as standard during the course of this year.
The various materials – from the luster of the paintwork to the fine leather details – look real and true to life. Another new development is that an S3 version of the A3 Sportback is now available, as illustrated here.
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