Business Strategy Analysis and Examples

This assignment delves into the crucial connection between business strategy and a firm's overall success. It requires students to analyze scholarly articles that examine the influence of business strategy on operational outcomes, project management, and competitive advantage. Students must synthesize these insights and illustrate their understanding with relevant examples from real-world businesses.

BUSINESS STRATEGY

Table of Contents
TASK 1 ..........................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Strategic positioning of Volkswagen by carrying out an organizational audit.....................1
2.2 An environment audit for Volkswagen................................................................................2
2.3 Significance of stakeholder analysis when formulating new strategy for Volkswagen........3
2.4 Present a new strategy for Volkswagen...............................................................................4
TASK 3............................................................................................................................................5
3.1 Alternative strategies relating to market entry or substantive growth..................................5
3.2 Justification of selection of a strategy for Volkswagen........................................................6
TASK 4............................................................................................................................................7
4.1 Roles & responsibilities of personnel at Volkswagen...........................................................7
4.2 Resource requirements for implementing a new strategy for Volkswagen.........................7
4.3 Contribution of SMART targets to the achievement of strategy implementation................8
CONCLUSION...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
A business strategy can be simply defined as a means by which corporation set their
desired goal and objectives. It is a long term plan that may be of approx 4 to 5 years (Campbell,
Edgar and Stonehouse, 2011). A business strategies are majorly concerned about with its
resource issues. For example, elevation in the finance in order to build a new industry or plant.
Strategies are mainly related to the scope of business activities. There are commonly two types
of strategies namely general strategy and competitive strategy. The general strategy are
concerned with the development of enterprise in terms of products and services. This also
includes globalisation that is expansion of business in all over the world. While the competitive
advantage are related with the doing best in relation to their competitors. This includes selling
goods or services at minimum cost in comparison to their challengers. The present report is
based on the business strategies of Volkswagen. In this project, the mission, vision, objectives
and goals are explained. The factors that have to considered like strength and weakness of
corporation, industry and the competition are also described. The effectiveness of techniques
used in the process of business strategies are also defined in this project.
TASK 1
Covered in PPT
TASK 2
2.1 Strategic positioning of Volkswagen by carrying out an organizational audit
An organizational audit for Volkswagen can be performed by using SWOT analysis that
assists corporation in understanding their internal strength and weaknesses and also the external
threats and opportunities. The SWOT analysis is done below:
 Strength: Volkswagen is a very organized umbrella brands. All people know that they
are producing high engineered super cars and passengers vehicles. They are running their
business in all over the world. One of the advantage of Volkswagen is that they have
deep pockets and because of that they are capable for expanding at faster rate (Astrachan,
2010). It has a strong market demand in Germany as most of the cars founded are of this
brand only. This is a company that is producing approx more than 26,700 motor vehicles
in a single day. It is obvious that no one can manufacture such an amount of cars if they
have not any demand. It has a rank of 57 in all over world.
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 Weakness: One of the main weaknesses of corporation is emission of its scandal.
Approx more than 5 to 6 million of cars contracts were canceled and returned back to
company. The trust of their users are broken as the installation of wrong pollution testing
software are came out from the top management of the enterprise (Auzair, 2011). The
major competition is faced by the company as many brands are emerging and penetrating
the whole market. This competition is giving benefits to the customers but are affecting
negatively to the company.
 Opportunities: One of the benefit gained by corporation is that, purchasing power of
vehicles are increased and keep increasing year on year. As the loans and finance option
are made available to customers, they are buying vehicles at faster rate. Auto-mobile now
become their basic need. The Volkswagen have to tap the emerging nations and can
expand their market in all over the world.
 Threats: One of the main threats to enterprise is the hitting of its brand reputation due to
the emission of scandal. People get afraid to purchase their cars, due to this the selling
rate of cars are reduced at large scale. Government is also imposing several taxes and
most of the revenue of company goes on paying such taxes only.
2.2 An environment audit for Volkswagen
Environmental audit of Volkswagen is performed by doing pestle analysis which is
discussed as follow:
 Political factor: Volkswagen is operating their business in more than 150 nations, due to
this they are facing different political situations in different nations. They are facing with
the fluctuating nature of currency (Burlton, 2010). Sometimes the value of revenue gets
decreases and causes loss for organization but sometimes it also provides benefits when
the value of currency gets increased. Banking and financial sector are giving its impact
on the turnover of company as these sectors provides loans and the interest rate is decided
by government policies only.
 Economical factor: Auto-mobile industry are powerful organization that are giving its
contribution in the national income of the country. Volkswagen are contributing in the
GDP of the nation where they exists. Other side of economic factors are also present that
are related with uncertainty of the economical conditions of world. For example,
European debt crisis is a major issue of car manufacturing enterprises as people now have
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not enough money that are used in the purpose of purchasing more cars. Additionally, the
prices of fuel are also increased. This also comes a problem for company. So, the
corporation now are searching for other alternative solutions.
 Social factor: Society are playing a vital role in the improvement of auto-mobile
industries. They are only one for whom they are manufacturing. In return, corporation are
also giving its positive impact by generating large number of employment for local
people (Campbell, Edgar and Stonehouse, 2011). Thousands of people are getting
directly job in the corporation and others are getting indirectly involved in all over the
globe. On the contrary, due to rise in the auto-mobile, road accidents are increasing. This
creates a negative impact on society.
 Technological factors: Technology aids a lot in the production of cars. An enterprise are
using several production techniques such as just in time which is possible only by the aid
of technology. Catching out the issues related with vehicles becomes very easy by the use
of modern technologies and as a result selling of cars is increased.
 Environmental factor: The auto-mobile industries are giving a major impact on the
environment. The pollution rate has been increased drastically as large ratio of carbon
dioxide are emitting from cars and other vehicles (Casadesus-Masanell and Ricart, 2010).
The raw materials that is used also impacts on the environment as well as life of people.
Large plants of Volkswagen are emitting poisonous gases in the air that are causing
several respiratory and heart related problems.
 Legal factors: Company also have to follow various legal requirements of country. This
is a challenge for Volkswagen to follow the rules and regulations of more than 153
nations, where they operate their businesses. Major legal requirements followed by
corporation are competition law, labor law, taxation law, intellectual law, etc.
2.3 Significance of stakeholder analysis when formulating new strategy for Volkswagen
Stakeholders are someone who are taking interest in setting strategies of the company and
has an involvement as they are investing money in organization's new strategies. Some of the
stakeholders of Volkswagen are employees, customers, government, suppliers, shareholders,
creditors, etc. Stakeholder analysis is a technique which is utilized in identifying those group of
people who are supporting the business activities of company. The importance of stakeholder
analysis in order to formulate new strategies are listed below:
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 Get important views from stakeholders
 Obtaining support from potential stakeholder
 Understanding their behavior by making effective communication
 Capable for estimating reaction of people about their business.
Mendelow's matrix are used for analyzing the stakeholders that are following:
 Box A- Minimum efforts: They do not have any interest and power, due to that they are
most vulnerable and get impacted (Chang, T. C. and Chuang, 2011). They follow the
instructions of others and accept their views.
 Box B- Keep informed: They are somehow interested in the strategies. But they do not
have any power to do anything. Managers have to persuade or convince those who are
opposing the strategies by showing the justification of plans. If they do not do so, then
members of such group try to gain power by combining with boxes of C and D people.
 Box C- Keep satisfied: Such type of stakeholders have to keep satisfied so that they do
not gain interest and move to box D. This involves pacifying or reassuring them about the
outputs of strategy in advance.
 Box D- Key players: They are main drivers of making revolution and change. They can
change or stop the management schemes if they are not satisfied with them. Management
requires to tell them about plans in advance and discuss with them about its
implementation issues.
2.4 Present a new strategy for Volkswagen
New strategy can be build for Volkswagen by using the Ansoff matrix. This matrix
suggests four alternative marketing strategies that are listed below:
 Market penetration: This includes increasing market sharing in the existed market
segments. This can attained by selling large number of goods or services to the targeted
consumers and also finding new users within the present market.
 Product development: This includes developing new goods or services for the current
market (Cinquini and Tenucci, 2010). This involves concentrating about how their fresh
products can fulfill the demand of new customers and also outperform in comparison to
their competitors.
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 Market development: This strategy states the finding of new market place for the current
products. The research of market and furthermore segmentation will assists in identifying
new group of consumers.
 Diversification: This includes movement of new goods or services into new market
regions simultaneously. But this is quite risky as more the corporation will move away
from their past performances, the more uncertainty will exist.
TASK 3
3.1 Alternative strategies relating to market entry or substantive growth
Marketing entry strategy
 Merger or Acquisition: This is done by companies which requires solution effect for
special market. These mergers are equal when the company size is equal and if they
have same business or make same product whereas acquisition is done by companies
which are more economically stronger of the company which is economically weaker.
 Franchising: It is a way of creating an image in the minds of customer and how there
products can help consumers (Dong-Hun, 2010). Volkswagen is a good example of
franchising selection for extend in global market.
 Organic Growth: It indicates the real growth apart from merger, acquisition etc. It
tells about whether managers have used different strategies for the growth process or
not. Volkswagen uses its internal resources for its expansion policy. This can be
achieved by increasing sales.
 Substantive growth: It is growth of company apart from organic growth i.e. its
growth from merger or acquisition is accounted in this (Eccles and Krzus, 2010). It
includes two types of integration Horizontal and vertical.
 Diversification: It is a strategy made by company while making new products for
new target customers. Volkswagen has a wide range of products that is being offered
for different target markets that includes luxury cars for rich and affordable cars for
middle class society.
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Limited growth :
 Market penetration: In this company markets their products to existing customers.
Volkswagen uses its luxury products for this purpose.
 Market Development: Here company markets their existing product to new customers.
By lowering their prices of some products it stuck into the eyes of new customers (Hahn,
Kolk and Winn, 2010).
 Product Development: Here companies replaces its existing product with new product.
It is done on regular basis in Volkswagen company.
 Innovation: Every company needs innovation, and they make considerable changes in
the existing product as per the market demand. Constant changes in product design and
use of new technologies has been trade mark for this company.
Disinvestment Strategy :
 Retrenchment: It is done to cut down or reduce something. Companies use this to
decrease the scale and area of business activity (Haley, Haley and Tan, 2011). Things
that force this are market reduction, unsuccessful takeover, economic recession,
ownership change, poor competitive position.
 Disinvestment: when a company tries to sell off its assets to another company where its
business is not flourishing. It can also be done for few products i.e. a company stops
making certain products which is not beneficial for them.
3.2 Justification of selection of a strategy for Volkswagen
Volkswagen uses limited growth marketing strategy. As it faced a loss in the UK market
few years ago. This forced company to change its market plans as it was facing many issues and
problems regarding its growth. Volkswagen emission scandal lead company to face the biggest
economic crisis in its history. It has inculcated new marketing strategies like Market penetration,
market development, Product development, innovation so as to gain its brand image . CEO of the
company has suggested that there will be disinvestment in some of their products and can sell off
its products in some areas. It is facing big financial burden and every penny is important. They
are reviewing their each and ever investment plans. Company is planning to expand its business
in the Asian and African countries. Innovations in the field of diesel cars are to be made so that it
produces less pollution as it is according to the environmental norms that is prevalent in UK and
America. It will harder for the company to gain its brand image after the scandal. Its
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competitiveness is increasing as the number of local car makers have entered into the industry.
Cars are having more technology than ever thought before this gives the competitive edge to the
companies like Apple to make it stretch to this industry.
TASK 4
4.1 Roles & responsibilities of personnel at Volkswagen
The strategy implementation needs a person who can effectively guide other personnel
and segment the works among other workers by recognizing their duty and level in their
corporation. In order implement the strategies successfully, the roles and responsibilities of
personnel have to be defined properly. CEO of Volkswagen are responsible for communicating
strategics's related data to their employees and other people more clearly. He has a duty to lead
the strategic planning. Managers are charged to implement the strategies and aids other workers
so that they do not do any mistake. Maintenance of ethical and legal standards should also be
performed by all employee of organization (Higgins, Omer and Phillips, 2015). Proper
monitoring is required in order to enforce the schemes successfully. Monitoring and controlling
involves conduction of survey of the work place and overview of different activities are done in
regular fashion. It assists in identifying whether the correct or proper steps are taken by workers
to execute the strategies. Workers are divided into teams and a team leader is responsible for
good performance of their team members.
They have to take correct actions if any requires. They have to guide their team members so that
they successfully implement the strategic planning. They have to inspire them so that complete
performance of strategies can be done effectively.
4.2 Resource requirements for implementing a new strategy for Volkswagen
There are three types of resources that are needed to implement a new strategy. This is
following:
 Human resources: In order to implement strategies successfully, it is very important to
hire skilled workers in the company. Human resource strategies are applied in the
company in order to do so (Hsieh and Chen, 2011). They are also responsible for
arranging training and development programs for the freshers who are new to the works
and do not know any thing about their job. While training, they come to know what they
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have to do and how they will perform in company and contribute in improving the turn
over.
 Financial resources: Financial resources includes how Volkswagen finance their
strategic planning and make it more effective. Finance can be taken in the form of loan,
two way debt or equity (Liedtka, 2010). Loans can be taken by banks and company will
pay back those loans by adding with interest rate. Additionally, stakeholders can also
invest in the new strategy formulation. But when the corporation earn profit, they also
become a participant in which this benefit is divided. Equity can be used by enterprise as
there is no interest related or bearing costs are related with principle.
 Time and material resource: Any strategy requires certain amount of time for its
competition. Volkswagen have also to decide a specific period of time in which their
strategic implementation should carried on. Volkswagen should use good quality
machines in order to complete their work of manufacturing. They should complete their
work before the allocated deadline so that clients can trust them.
 Raw materials: Company should use best quality raw materials so that high quality
vehicles can be manufactured by them. They also have to hire skilled or experienced
workers who are capable of doing the tasks more appropriately.
 Tools and techniques: Volkswagen should use effective modern tools and techniques so
that their work will be managed at time. Also, as they have loose the trust of people due
to scandal, they should gain that again (Martin and Rice, 2010). This can be done by not
cheating again the government and people by using false software that do not give correct
information regarding pollution emission. Now, they have to use trustworthy tools or
instruments so that no conflict will rise in future.
4.3 Contribution of SMART targets to the achievement of strategy implementation
By smart target means destination or target should be specific in nature, measurable or
can be measured on implanted criteria, can be attained or it must be reasonable or realistic, and
can be achieved with in a certain amount of time. The contribution of SMART goals are listed
below:
 The target must be specific in nature. If this will not be specific then all the attempts or
hard work of corporate will get wasted.
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 It must be measurable on the ground of aims and objectives. It assist in recognizing the
standard of work. If this is not measurable, then errors cannot be identified.
 The target must be realistic in nature and do not fly in the sky. It it may be imaginary in
nature then it is impossible to attain those (Meskendahl, 2010). So, it must be achievable.
Company needs to think about their planning and schemes implementation in advance so
that no conflict will occur in future.
 Volkswagen should set their goals and objectives that can be achieved in a limited
amount of time. If the target will achieved in specified period of time, then it is
impossible to earn profit from that (Montgomery, 2011). So, they have to complete their
work and achieve all aims and objectives prior to allocated dead line. This will aids in
gaining interest of users again.
CONCLUSION
From the above based report it has been concluded that business strategy is very
important as it aids in achieving aims and objectives of corporate. This is made after examination
of organisational audit. This consist of analysis of strength, weaknesses, threats and opportunities
of organisation. Additionally, the environmental is also considered that consist the influence of
political, legal, economical, social, technological and environmental factors on the company. The
aims, objectives, mission statements, vision, core competencies are setted so that the work
regarding manufacturing can be started effectively. The different resources needed by
Volkswagen are explained such as human resource, finance resource, time, tool and techniques,
etc.
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