Volkswagen Group South Africa & Raymond Ackerman Business Case Study & Financial Report Writing, Pick & Pay Strategy - Management Assignment Help

Assignment Task

Case study 1
A South African insight: The people of Volkswagen
What do a surfer, a quality auditor, a speed freak, a fitness fanatic, and a Girl Guide have in common? Why, Volkswagen, of course! Volkswagen Group South Africa employs about 4 800 people. Most of these employees work at the company’s manufacturing plant in Uitenhage, Eastern Cape, South Africa. The sales and marketing personnel operate from Sandton, Gauteng. There is also a Parts and Accessory Distribution Centre in Centurion, near Pretoria. Sales and field staff work independently in the Cape Town and Durban metropoles. The dedicated Customer Interaction Centre, which is based at the Uitenhage plant, responds to general queries, customer concerns relating to products and services, and requests for information about dealer networks. Since the first Beetle was produced in 1951, Volkswagen has become one of the leading manufacturers of passenger cars in the country. It has successfully produced models such as the Golf, the Kombi, the Audi, and the Polo. The Uitenhage Plant builds in excess of 100 000 vehicles per year, and exports to Asia and Europe. The company makes use of cutting-edge technology and design and keeps up with local and global trends. This is in line with its vision of being the most innovative brand in the world. To ensure the highest possible quality, every part made at Volkswagen is subjected to hours of rigorous testing and continuous research and development. All parts have a twelve-month warranty.

Volkswagen Group South Africa supports equality of opportunity and the continued development of people, suppliers, and dealers to achieve globally competitive standards in quality, service, and delivery. The group has five executive directors and two non-executive directors. Two of these positions are filled by black people, including one female. Of the group’s employees, 82% belong to previously disadvantaged groups. The company’s extensive Employment Equity Programme focuses on training and development initiatives, succession plans, and departmental targets that are strictly enforced. It aims to increase black and female representation at the executive and senior management level as well as to achieve management and equity targets set out in the Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice.

Volkswagen Group South Africa has used local as well as international education and training partners to develop the skills of its employees. It piloted the first Autotronic Learnership in 2003 to provide certified multi-skills training to artisans. In 2009, it established five learning academies to provide advanced training for employees in production, leadership, technical, and commercial aspects, and sales and marketing. A Matric certificate is the minimum requirement for all the employees, with a related tertiary qualification giving applicants a distinct advantage. Employees are professional, dynamic, and results-driven people with a real passion for the Volkswagen brand.
Volkswagen Group South Africa encourages the well-being of its employees by offering a Health and Wellness Programme consisting of the following components: Comprehensive Occupational and Primary Health Care, HIV/Aids program, an Employee Wellness Programme, and Health and Wellness Interventions.

Volkswagen Group South Africa is proud of its record as a responsible corporate citizen of South Africa. It is actively involved in various social initiatives intended to uplift the community. Welfare projects that the company participates in include One Hour for the Future (a fund-raising project for Aids orphans) and the Ulusha Soccer Bus project (an educational program that teaches life skills, including HIV/Aids prevention, to young people). It is also involved in sports development and sponsorship, focusing on soccer, cycling, and hockey. In addition, it has sponsored two South African bands: The Parlotones and Freshly Ground.

Some of the topics which may emerge from the case studies are Case Study 1:
• International trade: special focus on exports, the importance of exports to the economy.
• Department integration: How a company integrates its dispersed departments.
• Competitive advantage: Definition, ways to build competitive advantage.
• Marketing communication tools: Importance of marketing communication tools.
• Human resource development: The importance of human resource development, identifying skills gaps and ways to fill skills gaps in an organization.
• B-BBEEE and Codes of Good Practice

CASE STUDY 2: Pick n Pay moving forward
Raymond Ackerman was the founder of the Pick n Pay group in South Africa in 1967. The group concentrates on food, clothing, and general merchandise and is divided into three divisions, each with its own management board. The South African retailing operations consist of Hypermarkets, Supermarkets, Clothing Stores, the Pick n Pay franchise operations, liquor stores, pharmacies in the Hypermarkets, and Score supermarkets that are presently being converted into family stores. A successful retail business is dependent on a skilled workforce. Good skills ensure effective and efficient management and delivery of our products and services, and better customer service. Staff who develop their skills are able to advance more quickly through the organization and are more likely to stay with the Group. Pick n Pay to offer over 330 training programs to employees, ranging from basic literacy and numeracy through to computer-based training and management and leadership programs. They operate a robust career development framework to help the employees to meet their career goals.

Pick n Pay holds all four principles of the marketing concept. It follows the consumer-orientation principle because it is portrayed as the homemaker’s friend. Their price checks show that Pick n Pay offers customers exceptional value, and they project an image of offering a better shopping experience at no extra cost. Regular surveys are also conducted to determine customer satisfaction with the goods and services offered. Pick n Pay also supports the profit orientation. This is clear from the increase in turnover for the Pick n Pay Group for the year ended by 9,8% to R54,4 billion. Pick n Pay and Boxer grew by 11.5 %. The principle of organizational integration is also followed since all the different departments work together to achieve objectives and to satisfy customer needs. Pick n Pay shows its responsibility towards society by sponsoring various educational and charitable events. It sponsors the Comrades Marathon, the Knysna Oyster Festival, and the Argus Pick n Pay Cycle Tour.

The strategy of Pick n Pay regarding its target market was spelled out in its Financial Report. It focuses on the following areas:
• Defend and grow in its market share in the top LSM grouping (Living Standard Measure is a method used to segment the market into different categories based on different criteria such as income and access to different assets). This is seen as the core market for Pick n Pay, and they profess to meet and exceed the needs and demands of this group of consumers. To do this Pick n Pay focus on getting in-store delivery right, focusing on value for money, and getting their fresh products right.

• Getting market share in the lower LSM grouping which is traditionally in the township areas. The feel and product range in the townships should be similar to other areas in South Africa.
• Focusing on getting across through marketing communication that the Pick n Pay product prices are low. Pick n Pay also has a solid reputation with the upwardly mobile middle class.
• Investing to improve the supply chain operations of Pick n Pay. The objective is to distribute the majority of the merchandise from a central warehouse to its retail stores. This will improve the on-shelf availability and instore space utilization, and achieve cost efficiencies that will eventually provide even lower costs. The aim was to reduce the supply chain costs through further improvements at Longmeadow and to roll out the concept of central distribution to the rest of South Africa. The central distribution outlet in Longmeadow increased volumes by 57% and reduced the cost per case by 15%. Five more distribution centers are envisaged. There has been a lot of investigation on the success that Pick n Pay’s biggest competitor (Shoprite) had with the central distribution. Pick n Pay was the leader in direct distribution, where the manufacturing delivered directly to the shore. The net effect of this was that every store had to have massive loading and storage areas, in some instances up to 40% of the total area, which was not a productive selling area.
There is also a lot of discussion about the franchising route that Pick n Pay is actively growing. Only the future will tell if the franchising route that Pick n Pay is following will be the correct option.

Some of the topics which may emerge from the case studies are Case Study 2:

• Human resource development: The importance of human resource development, career development, identifying skills gaps, and ways to fill skills gaps in an organization.
• Retailing: definitions, types of retailing, the impact of the retail sector, etc.
• Marketing implementation, evaluation, and the control process.
• Marketing mix: 4P’s & target market.
• Marketing communication and the tools of the marketing communication mix.
• Concepts such as market share, LSM & market segmentation.
• Supply chain management practices.For more information on Volkswagen Group

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