Comparative Analysis of Corporate Strategies

The assignment requires a comparative analysis of corporate strategies in the automotive industry, specifically focusing on BMW Group and Tesla Motors Inc. The student needs to identify key strategies employed by both companies, analyze their strengths and weaknesses, and discuss the implications of these strategies on their respective performances.

BUSINESS STRATEGIES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Organizational Audit of VW AG:........................................................................................1
2.2 Environmental Audit of VW AG:.........................................................................................3
2.3 Significance of stakeholder analysis in formation of new strategy:.....................................4
2.4 New strategy for VW AG:....................................................................................................4
TASK 3............................................................................................................................................5
3.1 Alternative strategies relating to market entry, substantive growth, limited growth or
retrenchment................................................................................................................................5
3.2 Selection of strategy for Volkswagen...................................................................................6
TASK 4............................................................................................................................................7
4.1Roles and responsibilities of personnel in Volkswagen.........................................................7
4.2 Resource requirements for implementing a new strategy.....................................................8
4.3 Contribution of SMART targets in the achievement of strategy implementation..............10
CONCLUSION-............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategies plays a crucial role in long term run of any organisations. The success
and failures of business entity is mostly dependent on implementation of strategies. These
strategies affect the overall entity. This report throws light on mission,vision, goals, objectives
competitors and different strategies followed by Volkswagen. In this assignment it is shown that
how various strategies and plans can impact the internal and external environment of
Volkswagen. This essay gives a brief about what resources are needed in making an effective
strategy or plan to carry out. What can be various alternatives of strategies implementation.
How internal and external environment factors affects the formulation and implementation of
plans. What is the role of persons related to Volkswagen in effective planning. At last it shows
the affects and consequences of different strategies on Volkswagen.
For undertaking the present undertaking the organisation is selected to be Volkswagen.
The cited firm belongs to auto-mobile sector and operates globally. The existence of the
company on such a great level requires effective business strategies. Thus, this report will help in
dev eloping a relevant one for the cited establishment.
TASK 1
Covered in PPT
TASK 2
2.1 Organizational Audit of VW AG:
The organizational audit of VW AG will help the company to analyze its internal strength &
weakness in context of its external opportunities & threats. For conducting the organizational
audit, the SWOT analysis of the company is been carried out (Lehr, Lorenz, Willert and et. al ,
2017.). Based on the analysis & the outcome of the feedback's received, the business strategy of
the company is been decided. The SWOT analysis of VW AG states as follows:
Strength:
 Among all the companies working in automotive industry, VW AG has the widest profile
of brands & companies under its name. VW AG has acquired of 12 famous automobile
brands including many big names such as Audi, Bentley, Porsche, Ducati, Lamborghini

etc. Thus, this approach of VW AG makes the brand more accessible to its customer in a
wider reference. No other competitor of VW AG makes it more widely spread as the
company. The company not only provide its services in cars but also in motorbikes,
buses, heavy trucks & other commercial vehicles.
 With the rise in pollution & price of fossil fuel worldwide, the introduction of electronic
vehicles have played a game changing move. Looking at the growing market of
electronic vehicles, VW AG has made a plan of “Together-2025” which states that VW
AG to come up with 30 more electric vehicles by 2025. Also, the company is targeting to
bring down the cost of production of electronic vehicles. Apart from this, company is
working on better battery technology, digitization of systems & driver less driving
(Faltusová, 2017).
 Also, company is well diversified in reference of brands, products & geographic location
which thus helps the company to generate larger revenue than its competitors.
Weakness:
 VW AG vehicles are notoriously infamous for its high diesel consumption & emission
rates. In the scenario of growing environmental concerns globally, where people are
targeting to cut carbon footprints, VW AG has a negative image of increasing pollution.
 Apart from this, VW AG has the highest recall rate of vehicles as compared to its
competitors which reduces the customers rust on the brand & market share of the
company. Also, it adversely affects the sales of the company (Kauerhof, 2017.).
Opportunities:
 As the interest of people is moving towards the electrical vehicles due to rise in fuel price
& pollution, VWAG has an opportunity to penetrate in electronic vehicle segment.
 VW AG is quite financially stable. Thus, it allows company to be acquirement of many
technological companies, working on battery technology & autonomous driving.
 Also, changes in exchange rates & comfortable business policies in most countries can
open a scope for vw ag for investments (Magnusson and Tjus,2017).

Threats:
 With the entry of many big brands in automobile industry, VW AG has to face stiff
competition to maintain its market share & customers loyalty.
 The high emission rates of the vehicles, leading to failure in quality & pollution tests
have lead a major problem for the company (Tse, Zhang, Doherty, and et.al. 2017).
2.2 Environmental Audit of VW AG:
The environmental audit of VW AG includes the PESTLE analysis:
 Political Factors:
The business of VW AG is spread in many countries, hence makes it susceptible to any sort of
political changes worldwide. Also, the automobile industry is basically driven by the policies of
government.
 Economic Factors:
As the business of VW AG is global, it is highly affected by the change in economy on a wider
level. This makes the company vulnerable to any sort of economic depression (Whittall, Lucio,
Mustchin and et.al, 2017).
 Social Factors:
It includes the involvement of people of various social backgrounds as the businesses of VW
AG is widely expanded. Thus, employees of various social backgrounds will be working for the
company. Apart from this, accidents caused by the super cars manufactured by VW AG has
created a negative image of the company.
 Technological Factors:
VW AG has to work on its technological aspects to meet the growth in demands of its customers
& to cope up with the competition in the market. Introduction of electric cars had opened a field
of research for technological innovations (Siano, Vollero, Conte and et.al. 2017).
 Legal Factors:

Any change in the governmental policies or laws which in bide the automobile industry, will
affect VW AG directly. The company has to be more cautious regarding following of laws &
regulations of government & trade unions.
 Environmental Factors:
As VW AG is infamous for its vehicles making high emissions & not following the
environmental standards, company has to look after the fact that such situations needs to be
solved as soon as possible or they'll have a negative impact on company's brand value (Agarwal,
2017).
2.3 Significance of stakeholder analysis in formation of new strategy:
Stakeholder will play an important role in deciding of strategies as they will have a direct
or indirect impact on the functioning of the company. The customers, employees, suppliers,
dealers etc will give the VW AG the important feedback which will allow the company to make
essential improvements & implementation of new ideas & policies to make its services &
products better which in whole will lead to better customer satisfaction & growth in market.
Also, it will improve the company's brand image. Besides, it will also make company to adopt
better employee benefit policies which will improve the employees job satisfaction & loyalty
towards the company. It will also build a better relationship of employees with the company
which will proceed to rise in productivity of the company (Olleros, 2017).
2.4 New strategy for VW AG:
Looking at the growth of pollution issues globally & people's influence towards the
electronic vehicles in near future, VW AG can follow the strategy of 'MERGER or
ACQUISITION' to meet its customers demands & to cope with change in market factors. VW
AG can merge or acquire any sort of company that is working in field of battery technology or
affordable alternative of electronic car concept. This will not only improve the technical aspect
of the company, but will also act as a catalyst in enhancement of the company's economy
(Kompalla, Kopia, Foerster and et.al. 2017).

TASK 3
3.1 Alternative strategies relating to market entry, substantive growth, limited
growth or retrenchment.
Market entry- A strategy planned to distribute the existing products into
a new market segment. In this two strategies are followed:-
Market development- A strategic step taken by company to develop present
market rather than going for a new market. It is done by improvising new
strategies by promoting their product. Volkswagen could use this to enter
into countries where they are not operating(Rodrik, 2014.)
Product development-It means to make developments in existing product or
formulation of entirely new product. Volkswagen may develop new variants
of cars like electric cars.
Substantive growth- The annual percentage of increase in sales is
consistent with the defined financial policy of organization. It provides a
conceptual framework for understanding the financial growth.
limited growth- it is a strategy in which a firm holds its growth strategies
for a limited time as they try to focus on bigger things. It is generally done
for producing new products or increasing customer base. Volkswagen
should also focus on introducing electric cars as it will be the future
demands of customers.
Retrenchment- A strategy in which organization aims at shutting down
the operations of one of its business or reducing the cost of its
products(Ohanson, and Mattsson, Mauborgne, 2014). It is done to improve the
financial position of organization. Further it is divided into three
categories:-
Turnaround- it means withdrawing or taking back of any decision which is
wrongly taken. It is done to effective implementation of marketing

strategies. Volkswagen must not take any decisions which may be harmful
for them.
Disinvestment- it means to liquidate a part or portion of a business that may
not be able to achieve its targets and is giving negative results. It is mostly
done after looking the outcomes of turnaround strategy which is already
been implemented.
Liquidation- Closing down of business and selling its assets because it is the
last option remained. It can lead to serious consequences such as loss of
employment for employees and having a negative impact on other sections
of business. Volkswagen must shut down its business if it is giving negative
results.
3.2 Selection of strategy for Volkswagen
The strategy that has been selected for Volkswagen is product development.
Under this either changes are done in existing products or an entirely new
product can be developed. Both of them are effective tactics for the market
growth which in turn increases the business value(Kimiagari, Gabrielsson,
Gabrielsson, and Montreuil,, 2015). However, it should be recognized that
development of a completely new product and that too in auto-mobile sector
will increase the expenses. Thus, entity should focus on modifications in the
existing product. This can be done by installing smart features, changes,
etc. Volkswagen is a MNC and its existence is globally by covering a large
number of audience. Thus, the development as per the needs and demands
of varied people will help in increasing the company sales. In new product
development an effective and depth research is needed which increases
expenses also it may not be beneficial for other business that are already
operating. According to the needs of customers in different countries
Volkswagen can make changes in its products. They may install new

software of safety measures, change the design of products by using the
latest technology, can make fuel saving cars to improve its average, etc. by
implementing this strategy there might be increase in sales of their main
sector i.e automobiles.
TASK 4
4.1Roles and responsibilities of personnel in Volkswagen
Recruitment- it is major responsibility of HR to plan strategic campaign
for recruitment right people on right place(. Lo, and Salih, eds. 2015). They also
act as a mediator between employer and employees in communicating
policies of company to them.
Training- nothing is done by recruiting right candidate at right place until
and unless proper training is provided to them. Training is essential as it
helps the candidate in understanding the work pattern and internal
environment of organization. By this the HR will get an insight of
workmanship of employee. It will contribute towards organizations goals
and objectives.
Professional development- To increase employees engagement in
organization it is important that HR must involve him in programs,
workshops,,etc. This will makes the employee feel that the organisation
also cares for his interests and developments. For example- if an employee
wants to master in SEO, the HR should enroll him for seminars and
conferences(.Kimiagari, Gabrielsson,2015). By this the employee will be
continuously involved with the organisation
Appraisals- HR should appraise the work done by employee at each stage
so that this will encourage them do their best for the organizations. It
enables to HR to suggest give necessary measures for them. It also helps
employee to have a clear view of what is expected of them and what they
are delivering.

Work culture- to maintain a healthy and safe work environment in order to
eliminate stressful atmosphere in organisation so that it may not hinder the
performance of employees.
Resolving conflicts- it is the most common thing that happens in every
organisation. Therefore it is the duty of HR to solve conflicts. The HR
manger has right to intervene and help in mapping out a solution by
hearing the views of different employees.
Employee relations- the relation between manager and employee should
be like that the employees must feel free to communicate. This will build a
good public image of the organization
rewards and incentives- the best way of motivating your employee is by
rewarding them. Many techniques can be used to reward your employee
pay incentive, holiday packages, flexible work time,etc.( Gabrielsson, and
Montreuil,2015). It will also boost the confidence of co-workers to achieve that
for themselves by giving their best.
Legal knowledge- it is the laws and regulations in which the employees of
every organisations work. So that no employee go out of that box for doing
work in wrong ways. This also ensures the growth and existence of the
organisation.
Payroll management- it is the task of maintaining daily activities in the
organization which is called payroll management. It includes attendance,
leave record, timings, salaries, wages,reimbursement.

4.2 Resource requirements for implementing a new strategy.
Strategies are direction and scope of an organization to achieve its long
term goals. Business resources can be usefully be grouped under several
categories.
Finance resources- It shows the ability to finance any strategy in business.
To implement a new strategy significant investment in new product,
production capacity and working capital is taken into consideration(
Christensen, and Raynor, 2013. ).This must be manged from finance point of view.
The financial ability of firm determines its position and growth in the
market. The overall decision of implementing is entirely dependent on
availability of financial resources. It includes current cash balance,
creditors, debtors, loans, shareholders capital,etc. t not apply Volkswagen
must have ability to raise new funds from its shareholders if they want
development of new product.
Human resource- it is the human resource who are considered as the
main pillar of organization. Effective human resources can change whole
productivity of any business entity(Ward, 2016). For this they should possess
that skills, ability and experience that the organization needs. The human
resource department is given the responsibility for searching talented and
skillful employees in given time period. The business also looks into its
existing sales force so that by giving them proper training the needs can be
achieved.
Physical resources- It includes all operational activities or resources in
which the organizations is engaged is. It is of three kinds:-
Production facility- if any new strategy is followed it requires changes in
its production process so it is essential that organization must have
capability to make changes in ita production system(Kim, W.C. and Mauborgne

2015). They must view its overall process and should have that extent to
which is can be changed.
Marketing facility- for implementing new strategies it is required to
analyze and view what are their existing marketing facility prevailing in
market. Changes in strategy they have to do in distribution channels and
promotion for increasing sales.
Information technology- it plays a major part in development of new
strategy. Organization must be having latest IT technology which is very
essential in implementation of new strategy (Kindström, and Gebauer, 2015).
Various IINTRODUCTIONT specialist do research in field of IT for
measuring the before and after impact of implementation.
4.3 Contribution of SMART targets in the achievement of strategy
implementation
abbreviation description
S Specific It means to target a specific area for
improvement in order to increase sales of
product
M Measurable It means the comparison of sales
A Achievable It means to increase product range.
R Realistic It stats that results are relevant to a
mission or not with available
resources.
T Time bound It stats that the targets must be
achieved within given deadline.

Volkswagen is specific in its strategy of development of new product.
The focus will only be on making changes in products to increase sales thus
it is a specific task for them.
Measurable- it can be done by comparing the sales in Volkswagen. This
will help them find out whether there is increase in sales or not.
achievable- As in Volkswagen the strategy chosen is Product development
so the company will only focus towards this target to increase its product
range.(Kowalkowski, C., Windahl,2015).To meet the demands of customers it is
important to make changes in product.
Realistic- The only target in Volkswagen is to develop a product by which
the benefits of products can be attained. It should be realistic in nature as
changes made will be seen in long term success of business.
Time based- Targets must be made by considering the time limit in which
it can be achieved. The process of product development in Volkswagen
should be time bounded. It should not take long time to make changes in
product so that it becomes difficult to meet the demands of customer.
CONCLUSION-
From this report we can conclude that business strategies plays an
important role in any organization. In this report the techniques that are
used in formulating strategies are discussed. Further the role of
stakeholders and different people involved formulating strategies is done.
Also the alternatives of various strategies relating to market environment is
discussed. What are the role and responsibilities of HR in strategy

implementation, resources required in making strategy, is also been
discussed.

REFERENCES
Books and Journals
Agarwal, A.K., 2017. How Do I Align Legal and Business Strategy?. In Business Leadership
and Law. pp. 37-55. Springer India.
Christensen, C. and Raynor, M., 2013. The innovator's solution: Creating and sustaining
successful growth. Harvard Business Review Press.
De Melo, J. and Robinson, S., 2015. Productivity and externalities: models of export-led growth.
In Modeling Developing Countries' Policies in General Equilibrium (pp. 43-70).
Faltusová, B.D., ANALYSIS OF THE SELECTED COMPANY BY USING THE SELECTIVE
METHODS.
Johanson, J. and Mattsson, L. G., 2015. Internationalisation in industrial systems—a network
approach. In Knowledge, Networks and Power (pp. 111-132). Palgrave Macmillan UK.
Kauerhof, A., 2017. Strategies for Autonomous, Connected and Smart Mobility in the
Automotive Industry. A Comparative Analysis of BMW Group and Tesla Motors Inc.
Kim, W. C. and Mauborgne, R. A., 2014. Blue ocean strategy, expanded edition: How to create
uncontested market space and make the competition irrelevant. Harvard business
review Press.
Kimiagari, S., Gabrielsson, P., Gabrielsson, M. and Montreuil, B., 2015. 5. Market strategy of
international new ventures originating from a small and open economy. Handbook of
Research on International Entrepreneurship Strategy: Improving SME Performance
Globally, p.85.
Kompalla, A., Kopia, J., Foerster, U. and et.al. 2017. ANALYSIS OF CORRELATIONS
BETWEEN COPRPORATE STRATEGY AND OPERATIONAL STRATEGY
CONSIDERING MANAGEMENT SYSTEM STANDARDS. Ecoforum Journal. 6(3).