The Volkswagen recovery: leaving scandal in the dust

Abstract

Purpose

Following the diesel emissions debacle of 2015, Volkswagen Group has rebounded significantly in terms of sales and market value. When examining Volkswagen’s dramatic recovery, it is clear to notice four distinct elements that helped to bring about this rapid turnaround. To push through the public relations nightmare and regain sales traction, Volkswagen embarked on a four-step process that centered on four key words: Replace, Restructure, Redevelop and Rebrand. The purpose of this study is to examine that process.

Design/methodology/approach

This study is a case study examining the performance of Volkswagen Group and their recovery from the 2015 diesel emissions scandal. To achieve their significant turnaround, the company sought to: replace the leadership, restructure the organization, redevelop the strategy and rebrand the product. This study examines those four steps in the recovery process as a model for other firms.

Findings

To try and achieve an unprecedented turnaround, the company sought to: replace the leadership, restructure the organization, redevelop the strategy and rebrand the product. These four strategic elements formed the basis of a newly focused company and continue to push the company forward and further away from the scandal. This four-step process of recovery provides an excellent case study for other firms who may find themselves in the midst of turmoil and crisis.

Originality/value

To push through the public relations nightmare and regain sales traction following their 2015 emissions testing scandal, Volkswagen embarked on a four-step process that centered on four key words: Replace, Restructure, Redevelop and Rebrand. These four strategic elements formed the basis of a newly focused company and continue to push the company forward and further away from the scandal. This four-step process of recovery provides an excellent case study for other firms who may find themselves in the midst of turmoil and crisis.

Citation

Welch, J. (2019), "The Volkswagen recovery: leaving scandal in the dust", Journal of Business Strategy, Vol. 40 No. 2, pp. 3-13. https://doi.org/10.1108/JBS-04-2018-0068