Globalizing VolkswagenBACKGROUNDSince its inception in 1938, when the German government laid the foundations of the first Volkswagen factory to build a "People's Car", Volkswagen has had its times of testing and prosperity. Barely making it through the end of World War II, this company had several leaders who took it in many different directions, some bringing prosperous growth and others defeat and loss of investment. Competition brought VW to its knees in the late 1980s and early 1990s, and it faced defeat if it failed to turn around to compete with new Japanese manufacturing and production that diminished costs of cars by making them more accessible and attractive. In early 1993 Ferdinand Piech became CEO of Volkswagen and began to implement his plan to change the company's future. Piech transformed VW into a powerful global player by purchasing other well-known car brands, such as Bentley, Bugatti and Lamborghini, to add them to the Volkswagen industry. In 2000, Volkswagen became the first to sell more than 5 million cars worldwide, increasing its global market value by 12.4% compared to the previous year. It is said to have recorded the highest profits in history, reaching 2.9 billion euros after taxes, which at the time amounted to almost 3.5 billion US dollars. STRATEGY In 1993, when Piech took over, he faced some serious problems in being able to produce a profit in the years to come. One of the main concerns was production costs. They needed to find a more efficient and less expensive way to produce the different Volkswagen models. This is the largest area where they were losing the competitive battle: the cost of their product. They needed a strategy that solved current problems and was also able to easily adapt to future changes to enable a growing market. Piech had the idea to use platform development. Platform development is used in vehicle production and the basic principle is that all Volkswagen models have relatively the same basic structures. Consistency in structures allowed for faster production of parts for assembly and less complexity in differences between models. Piech, however, wanted Volkswagen models to remain distinct in their styling as buyers progressed towards customizing their cars..