History / Background 1930s Ferdinand Porsche designed first Volkswagen "Volkswagen" means, literally, "peoples car” 1940s Beetle - known as Volkswagon Type 1 - economy car - company's signature platform

History / Background The VW Beetle

History / Background 1950s Type II Volkswagen introduced, originally known as transporter or bus or camper. The Volkswagen Bus, still today known to many as the "VW Bully".

History / Background 1955 Continual growth for about 20 years,sales of Beetle grew, company's total worldwide vehicle sales past $1 million. Employees and dealers from Germany and abroad celebrate the production of the one millionth Volkswagen Beetle in Wolfsburg. Volkswagen of America (VWoA) was founded. It is the US subsidiary of the Volkswagen automobile company in Germany. 1960s 1969 high point of Beetle's sales

History / Background 1970’s Beetle popularity declined in US, importation was discontinued Production of Beetle continued into 1990s in Latin America Beetle remains the best-selling car of all time On February 17th, 1972 Volkswagen breaks the world car production record,with 15,007,034 units assembled, the Beetle surpasses Ford Motor Company's Model T, popularly known as the "Tin Lizzy", between 1908 and Passat introduced 1974 First Golf built 1977 Rabbit introduced 1979 Jetta introduced -small family car

History / Background The "Himalayas Chart"

History / Background Changes by Executives Executives wanted to break the pattern of sales. Began a more proactive approach to developing & introducing new models (New Golf, New Jetta, New Passat, & New Beetle). Sales rose into the 21st century. New brand positioning & effective advertising helped move VW into competition with other upscale brands.

History / Background Early 2000s Senior Executives began to broaden their view of the traditional VW Group portfolio of vehicles VW Group chairman, Dr. Bernd Pischetsrieder initiated a strategy of diversifying the product offerings New diversification strategy would create a portfolio that matched the global demand for vehicles. Pischetsrieder consolidated VW Group automotive brands into two groups: – "Classic" - Bentley & Skoda – "Sporty" - Audi, SEAT & Lamborghini

History / Background Gerd Klauss, VWoA's CEO - Thoughts & Ideas If all models proposed in 2002 were approved and produced, VWoA would grow from importing 9 models in 2002 to over 22 models in 2008.

History / Background The Strategic Change

History / Background Instituted an organizational readiness program called "Next Round of Growth" (NRG)

History / Background VWoA Core Processes and Major Organizational Functions

History / Background Enterprise Goal Ranking for Project Prioritization

Responding to Internal Critics Matulovic is a member of the ELT Likely only ELT staff would challenge Much work on project's phases reflects his commitment

Existing Unchecked Projects BPTO established to tame difficulties with existing projects Matulovic used gedasUSA staff to create a top-level architecture Phase 1 ends with IT projects cut from 210 to 170 million ELT's team members can vouch for top projects due to them doing the prioritizing

Initiating Such an Undertaking Again? Multi-day meetings lead to overnight work which suprises returning DBC members Some members could report project daily status rankings to their ELT bosses Partially funded, multi-year SAP project needs another year and still little funds SAP project tested the outcomes of Matulovic's 3-Phase åprocess

Addressing Possible Concerns Can Matulovic organize the established units? Acronyms: NRG, BPTO, PMO, ITSC, DBC, and ELT Groups must scramble to convene and continually vote to achieve top 3 picks Realized that funding the top 3 exceeded budget

Executives Seeing Two Options Look for other projects with higher enterprise goals Challenge the merit of Matulovic's goal-selection methodology Matulovic might need to fold to take on a decision-maker who comes with ELT's ulterior motives Result: return to favortism for ELT pet projects