Volkswagen Business Strategy Analysis

This assignment examines the business challenges confronting Volkswagen, particularly concerning excessive machinery expenses and operational inefficiencies. It emphasizes the need for strategic planning to manage resources effectively and achieve cost efficiency. The analysis highlights the potential of SMART (Specific, Measurable, Achievable, Relevant, Time-bound) targets in guiding the company towards achieving its objectives.

BUSINESS-
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Evaluating strategic positioning with the use of organizational audit..............................1
2.2 Environmental audit for Volkswagen...............................................................................2
2.3 Value of the stakeholders in preparing of the strategies...................................................4
2.4 New strategy for Volkswagen..........................................................................................5
TASK 3............................................................................................................................................6
3.1 Suitability of alternative strategies which are linked with market entry and growth......6
3.2 Justification for selection of business strategy.................................................................6
TASK 4............................................................................................................................................7
4.1 Roles & responsibilities of personnel in strategy implementation...................................7
4.2 Resource requirements for implementation of new strategy for VWAG.........................7
4.3 Effort of SMART targets in business strategy.................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy are described as the action plans which are used by firms so that they
can become successful in achieving there goals and business objectives. It is the art which are
involved in various operations like planning, analysing, directing, controlling and monitoring all
the activities which are processing at business places. It is an important tool for mangers as it
help them to know all the cross function decisions that have been decided in order to effective
complete the task which are assigned to them (Astrachan, 2010). They are able to achieve
competitive advantages over the market areas and this helps in gaining strengths. Business
strategy are designed for Volkswagen so that they can easily resolve all the issues that are
operating in the present business environment. The team of environment protection have
imposed heavy penalty on this company. This had generated negative impact on them and this
can be resolved with the help of effective business strategy. This report is based on importances
of stakeholders while they are formulating business strategy, alternative plans which are linked
with adopting new markets, policies adopted for retrenchment, growth and development of firms
activities.
TASK 1
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TASK 2
2.1 Evaluating strategic positioning with the use of organizational audit
Internal audits are very essential factors for every business and these should be analysed
properly so that all the risk factors can be removed from business, effective operational process
can be used and various measures have been adopted by government authorities in order to carry
out all the business operations in planned and effective ways. All the employees who are
involved in this process have the authorities and responsibilities to keep record of all the
activities in order to maintain them effectively this is also useful in creating positive image of
company so that they can retain themselves in the eyes of stakeholders who are involved in
performing business activities (Bharadwaj and et. al., 2013).
Another factor is linked with adopting SWOT analysis in order to analyse all there strong
and week points of business. They are beneficial in analysing all the aspects which are affecting
the operations of selected business. Various opportunities can also be used by business in order
to achieve success. Threats helps in development of back up plans so that the problems can be
solved by applying measures to increase there performances.
Strength: Volkswagen had decided clear goals and objectives as they want to spread
there business in various segment so that they can earn huge profits. The revenues of the
business are raising on continuous basis as the study evaluated from the past three years. The
rising in profit rates are somewhat lower but they can easily mange all there profits in planned
and effective ways. There are also taken social measures in order to operate business operations
effectively.
Weaknesses: The selected firms are having larger stocks which are unsold thus it affects
and distributes there whole pricing structures and policies. Various business approaches also
affect there pricing structures thus there is decrease in profit rates. If the company is not able to
achieve differentiated business strategy than they lack in achieving competitive business
advantages. Thus they have analysed constantly decrease in there profit rates and revenues when
comparison are made with past years (Casadesus-Masanell, 2010).
Opportunities: These business have great opportunities where they can easily explore all
there business operations by making entry into different market segments. Those strategies
should be developed which are useful in increasing growth and development of business. There
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are various ways in which the activities of business can be expanded into areas by which they
can achieve growth and development.
Threats: The major difficult factor for firm is that as the technologies are constantly
increasing and the company is not able to plan the business strategies according to advancement
in technologies. There is huge threat from various firms who are performing there business
operations in the similar sectors (Stonehouse, 2011).
Team management are needed in order to control all the business process which are risky
and are creating difficulty in performing various business operations. All the factors which are
useful in development of effective risk managing systems are included in these process.
2.2 Environmental audit for Volkswagen
On 18 September in the year 2015 there was various obstacles which were faced by firms
like the cars which they had manufactured were eliminating out pollutions in larger amounts and
this complain from the customers were not good signs for future growth of business.
The pollution have affected health related aspects of the customers and it has also
affected the natural beauty and environment. This was the major difficulty which was faced by
business in those times. This can be solved by developing various plans and strategies which are
useful in manufacturing cars so that the problem which was faced by the company in earlier
times about pollutions can be solved in effective ways. The new strategies implies that all the
new cars will be free from pollutions. It is very important for firms to conduct environment audit
for the auto-mobile sector so that they can increase there profit scales. In order to carry out
environmental audit it is vital to know about the conditions which are operating in external
environment with the help of PESTLE analysis which are described as:
Political environment: If the business wants to carry out their operations in another
country apart from their native place than they had various opportunities as the number of
restrictions will be less which will hamper there business activities, the compulsory taxes which
will be imposed by government are also less in number for the industries which are having there
operations in auto-mobile industries ( Ricart, 2010).
Economic Factors: The economic factor of Volkswagen is linked with income level of
people in the economy as they will buy the products which are having high prices and are
luxurious. If the GDP ratios in the economy are higher then people will buy the products as they
are having money in order to buy these products. Thus economic factors include wealth of the
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people of the nation and this is an important factor which results in growth and development of
the overall economy.
Social environment: The company had established various plans and strategies in order
to develop new cars which will be free from pollutions. This is beneficial as the sales ratios will
rapidly increase as individuals are showing interest in order to purchase the new cars which are
free from pollutions. The prices of products are very economical and this is a strategy which is
built by them in order to attract large customers who can purchase the new models of cars. This
is very useful as they have increased there selling ratios which results in growth and
development of business.
Technological changes: The products should be modified according to new technologies
so that customers can be satisfied with the products and their present needs and demands can be
easily fulfilled. This can be done with the help of adopting new machinery by which changes can
be made in goods. Effective management system should be developed in order to maintain
advance stock at work places which is known as Management Information Systems. There are
various systems which are working with the help of technologies like data base systems these
should be adopted by Volkswagen (Krzus, 2010).
Environmental Factors: Car manufacturing firm have huge impact on environment .
Volkswagen have many plant in world and from these plants smokes are emitted in air and
wastage is thrown in waters. Volkswagen taken steps to save the environment like they make
Hybrid cars, regulate environment protection rules, recycling, business sustainability, Green
initiatives, research and development, ecofriendly infrastructure, corporate social responsibilities
etc.
Legal Environment: This is vital factors as business should execute all their working
with the help of legal state of affairs. In this process all the rules and regulations had to be
followed which are enforced by the laws. The taxes which are compulsory should be paid on
right time intervals and health and safety of employees should also be concerned who are
working in business.
2.3 Value of the stakeholders in preparing of the strategies
Stakeholders are defined as important resources of firms who are playing effective role in
providing success and increasing there productivity scales. This is beneficial in achieving long
terms goals and strategies. They are showing interest in every business activities, they want to
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expand the business operations at national and international levels so that they can earn high
amount of profits. All the stakeholders who are involved in performing business activities should
aims at fulfilment of needs and desire of customers. The matrix which are designed for
stakeholders are aimed at accomplishing all the needs of parties involved in business in effectual
ways (Eccles, 2010).
KEEP SATISFIED
( The people who are highly satisfied at
involved in this category and they had
maximum strength and powers to take
decision)
These can be Employees or the shareholders
involved in business.
MANAGE CLOSELY
(These persons have lower interest but there
powers are more. All the vital informations had
to be shared among people in order to make
them satisfied.)
There can include government officials or the
persons who are involved in supplying goods.
MONITOR
(These persons shows more interest but they
are having less powers to take any decision)
In this method of information the annual and
half yearly reports are used.
This can consist of Financiers and clients of
business.
KEEP INFORMED
(These persons are having lower interest and
there powers are also less while making
comparison)
The informations which are very vital had to be
shared among people and timely interferences
are not needed.
This includes peoples of the local community.
The grandness of stakeholder analysis are evaluated as:
 It is useful for firms in formulation of various strategies which are related with CSR
activities.
 Various informations are provided which are useful in formulating plans and policies.
 Strategic Planning are useful in motivating all the employees to achieve goals and
business objectives.
 This process of analysing stakeholders are vital as it helps in gaining alignment and
consistency in all there business operations.
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All these factors are very vital as it helps firms in gaining assurances that all the task are
completed with efficiency in desired time frames.
Stakeholders and their Significance:
 Government: Government plays a major significance in any Company because it is
government to whom we give taxes. They implement legislations, laws and regulations
which the organisation had to follow. For a smooth running of any company it is
necessary to fulfil all the required procedure provided by government.
 Employees: Workers may or may not be on the project team but they also have a
unconditional interest in the product. Employees support is essential because they are the
one who help to company to have a truthful communication.
 Suppliers: relation between suppliers and company is very important because they are the
one who supply raw materials to any institution and after the final goods they supply to
shops from where consumers can get the product.
 Trade Unions: It provides job security to the workers. If employees are facing any
problem than they can come to assign trade union to resolve their problem. Worker feel
protected under trade union. Work related problem can be solved by the union.
2.4 New strategy for Volkswagen
New business strategies are formulated in order to resolves all the issues which are faced
by business organisations and it affects there working capabilities. If new strategies are
formulated than it helps in keeping work effectiveness in order to achieve good results. The new
strategies will be designed after the mangers have taken steps to conduct environmental analysis
and organisational audits this is helpful in maintaining there current capabilities to perform
business activities and increase in market shares. Various penalties has been imposed on the
selected firms and they had to pay these in order to reduce future difficulties and increasing there
working efficiency. The new action plans will contain limited growth strategies this will be
beneficial in expanding there business operations and less resources will be needed to perform
this process (Campbell, 2011).
The main aims of strategies are related with minimising ingestion of resources while
maintaining there present skills and capabilities. The CEO of company has given his view that
all the plans related with expansion should be stopped and there resources should be conserved
by paying all the enforced penalties. All the strategies which are formulated are bold enough to
investing in all plans in order to improve there working efficiency and effectiveness. The Porter
five force model are beneficial in adopting differentiations, reduction in cost by increasing there
work efficiency and those factors should be focused which are useful in generating more profits.
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The present portfolios of firms can be improved by increasing working efficiency and reducing
there overall cost. This results in more revenues for business.
TASK 3
3.1 Suitability of alternative strategies which are linked with market entry and growth
There are various strategies which are useful in achieving growth so that work can
achieve efficiency. All the resources should be used in effectual ways in order to achieve good
results. The strategies which can be used as alternative are described as:
Market Entry: The firms can adopt strategies in order to make entry in new market areas
so that they can expand there business operation's in order to achieve success. These methods are
very cost effective and this is valuable for firms in order to establish themselves at market place.
This can be achieved by different tools like licensing and turnkey projects.
Substantive growth strategy: This strategy is used by firms when they have ample amount
of resources available with them. This can be achieved by two methods that are merger and
acquisition. Thus they can achieve high shares at market place.
Limited growth strategy: This strategy is mostly used by business when they are not
having enough resources to expand there business activities. This tool is used with joint ventures
of firms when selected business wants to enter into new markets by making alliance with other
business. This results in achieving growth and success.
This is the most suitable strategy which can be used by Volkswagen if they wants to
make entry into new markets (Verbeke, 2013).
Retrenchment: This strategy is used by business when they are facing heavy losses or
business is in shut down position.
3.2 Justification for selection of business strategy
The strategy which is most suitable for Volkswagen is Limited growth strategy. It is
valuable in cutting down all the cost which is involved in business operation's so that they can
pay all there penalties and debt which are imposed on them. This will help in reduction of
resources which are over consumed so that goods can be achieved in effective ways.
Reasons for justification of selected strategy are described as:
Hefty Penalties: The company had to pay high penalties in UK as the cars which
eliminating large amount of smoke and they have paid them in order to maintain there status.
The environmental agencies are analysing Volkswagen if they have broken any law and order.
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Maintenance of current capabilities: The limited growth strategy are useful in managing
their current proficiency and capabilities. It had to ensure that if changes are adopted in plans
than it does not affect sub brands and portfolios of firms.
Expansion into new market or fields: The company can enter into new market areas by
formulating joint ventures with another business. This was done in china market when two
business agree to form joint ventures and agree to share there profits.
The selected strategy will help firms to cut down all there cost. This will help in
maintaining there quality aspects and the new changes can be implemented in products without
any additional cost (Spender, 2014).
TASK 4
4.1 Roles & responsibilities of personnel in strategy implementation
There are various roles and responsibilities which are to adopted by individuals in order
to implement the strategies in effective ways. These are described as:
Senior Authorities: The top management has the authority to involve themselves in
planning of strategies while analysing all the trends that are arising at the market places. The are
giving guidelines to mangers in order to apply all the strategies in effective ways.
Managers: These are the sole authorities of company when it comes to implementing the
strategies at work place. Various plans and policies are adopted so that business goals and
objectives can be achieved in effective ways. They are supporting the mangers in taking
important decisions. The mangers of selected firms had to monitor all the activities so that all
tasks are completed in desired time frames (Teece, 2010).
Engineers and research personnel: These persons are involved in manufacturing
products. If there is any changes implemented than proper training had to be given to them so
that they can work accordingly. There main aims are linked with making changes in the
integration process.
Expatriates: These are the persons who are leaving there native places and moving to
other countries in order to perform there business operations. They are having very sharp mind
and they can execute the working process in effective and planned ways.
Different levels of management
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There are three level of management that are working at organisation. These are
Administrative or top level management, executive or middle level management, supervisory or
lower level of management. In each level management have different duties and responsibilities.
Top level management consist chief executive officers, board of directors, general
director or managing director or president. They work on policies, mobilise resources, decision
making etc. Top level management are more conceptual other then technical.
Middle level management belong department heads, branch managers, junior executives.
They work on following task give recommendations to top level management, implement the
policies which made by top level, coordinate all department action and communications. Middle
level management have more managerial skills.
Lower level management consist supervisory work. They will follow the direction of
managers, they motivates employees moral, they maintain link between workers and managers,
controlling. They are regularly report to middle level management. Lower level management
required technical and communications skills.
4.2 Resource requirements for implementation of new strategy for VWAG
There are various types of resources which are required in implementing the strategies in
effective ways which are described as:
Human resources: The company had to focus that all the workers are employed at right
place and in right times. This is valuable in increasing work efficiency and effectiveness. The
workers are the important resources because if they are not present than the whole business
process will stop and company have to shut down its operation.
Finances: The company had to lay emphasis on managing funds in order to run there
business operations in effective ways. In case of Volkswagen they are not able to take risk of
investing huge amount in their business operations as they have to pay the penalties.
Fixed resources: There are various resources which are fixed by nature. This can be
linked with manufacturing different facilitates and machinery equipments. The management had
to monitor that all tools are according to their needs and requirements. This affects the business
as there expenses will increase. All the operations had to be managed in effective ways in order
to achieve cost efficiency (Spender, 2014).
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4.3 Effort of SMART targets in business strategy
The situations which are faced by Volkswagen can be managed by using various
innovative and strategic methods. All the resources should be conserved in order to keep
themselves away from penalties. All the plans which are formulated and strategies which are
developed should focus on maintaining current capacity. The higher authorities can use SMART
Targets which are useful in achieving objectives in specific, achievable, measurable, time bound
and realistic ways.
A short examples which are related with SMART Targets is that if the workers are made
to work for long hours in whole month than they will become frustrated and panic. If the
employees are said to work for specific 8 hours a day than they will do there work with full
efficiency and effectiveness in order to achieve their targets (Business Strategy, 2017).
The SMART objectives for Volkswagen are described as:
 The sales ratios can be increased for next months by 20%.
 The production rates should be increased by 2% in the coming year.
 Efficiency levels has to be raised by 10 to 20% in one year. Strategic alliance will help the business to expand there business operations in new
markets.
Smart Targets
S.M.A.R.T
Specific: What ever goal you want to achieve you must be specific. Having lots of ideas
in your mind will land you in something form where it will be very difficult to be focused.
Which will lead you to demotivation.
Measurable: To attain any goal it is important to measure your goal or targets. You
should able to measure your goals to track your performance and progress which will help you to
stay motivated.
Achievable: targets what you decide should be achievable not should not be something
that is miserable. Your goals should be challenging but at the same time it should be achievable
with the help of appropriate knowledge and skills.
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Relevant: the set target should be relevant it should not be undefined. For achieving any
goal you require assistance and having a relevant target will help company to achieve their goal.
Timely: Every goal should have a specific time bound so that it should be completed in
given time period.
CONCLUSION
From the above report it can be concluded that formulation of business strategies are
useful in achieving goals and business objectives in effective and efficient ways. It is valuable as
consistency is achieved in all the business operations and the resources of economy are used in
effective and planned ways. SMART objectives are valuable in achieving all the goals and
objectives in specific time frames.
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