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This is the second of a two-case series (302-021-1 and 302-022-1). Volkswagen AG has been one of the most dynamic companies in Europe. The case series describes 10 years from Volkswagen''s initial purchase of Skoda shares to the time it takes total control of the company. The (A) case traces the venture from 1989-1993 and demonstrates how the two companies merge their cultures, competencies, and ultimately create a car competitive in West European markets. The (B) case traces the venture from 1993-2000 and has indepth information on the venture''s success and its various functional strategies for implementing its overall strategy. The cases also illustrate how Western companies manage the unique risks of doing business in Central and Eastern Europe. The cases are best taught together and positioned at the end of a strategy course, as a study in mergers and acquisitions, or in a course on firm behaviour and strategy in emerging market economies. A video ''Volkswagen''s Purchase of Skoda Auto AS (A) & (B): Interview with Frank Farsky, Canada Region Manager'' (302-021-3) is available to accompany the case series.