Analyzing the Impact of Macro-environment on Volkswagen

Business Strategy

Table of Contents
Introduction......................................................................................................................................1
LO 1.................................................................................................................................................1
P1. Analyse appropriate frameworks analyse the impact and influenced of macro-
environment on the given organisation.......................................................................................1
M1. Critical analysis of macro environment to determine and inform strategies management
decision.......................................................................................................................................3
LO2:.................................................................................................................................................3
P2: Analysis the internal environment and capabilities of a given organisation.......................3
M2: Critically evaluate the internal environment to assess strengths and weaknesses for the
organisation.................................................................................................................................4
LO3:.................................................................................................................................................5
P3. Application of Porter's Five Forces in context of organisation. ...........................................5
M3. Discussed about appropriate strategies to improve competitive edge in the market..........6
LO4:.................................................................................................................................................7
P4 Application of concepts, models & theories to interpret as well as devise strategic planning
of company..................................................................................................................................7
M4 Strategic management plan considering tactical & tangible strategic priorities as well as
objectives.....................................................................................................................................9
Conclusion....................................................................................................................................10
REFERENCES..............................................................................................................................11

Introduction
Business strategy is a course of action or set of action which helps entrepreneurs in
achieving business objectives. In the other words, it is a set of competitive moves and actions in
the business which attracts a customers and compete successful in the market by strengthening
its performance and achieve organisation goals. It is a backbone of the business as it lead to
roadmap of desire goals. The main aim of a business strategies is to fulfil the goals and
objectives of the organisation within the time-frame. This process gives vision and the direction
to the business regarding the what needs to be done, how it needs to be done . The organisation
implement different levels of strategies such as corporate, business and functional levels so that
all the departments function in proper manner to achieve desire results(Nagy, Oláh, Erdei, E
2018.)This report is based on Volkswagen, is a German auto-maker founded in 1937. This
company manufacture car's for its world wide customers and provide world class services to its
target market. Under this report, the external factors of Volkswagen as discussed and how such
factors affects the performance in the market will be explained and pestle analysis will be done
to see which factors are to be taken into consideration.(Thompson, Strickland, and Gamble, 2015)
For the internal analysis SWOT is conducted to make best use of opportunities present in the
work environment. Further their will be discussion on the porters five force in the context of
Volkswagen and Ansoff model is used to explain different business strategies.
To analyse the external environment factors which affects the productivity of the
Volkswagen are discussed as follows. The PESTEL analysis are in-depth analysis of external
factors and their impact on the automotive industry.
Political factors: Under this factor, all the rules and regulation related to the government
has a implementation on the performance of such companies.(Akter, Wamba, Gunasekaran, 2016).
The united states and united kingdom are the major target market of the Volkswagen and issue is
related to such countries are the Trade tariffs .Throughout 2018 and 2019, the US are willingness
to place tariffs on the goods imported from the European market which lead to increase in the
tax duties for the customers. Further it is notices that their will be shortages in the sale of diesel
and the petrol in the coming year. Anther political issue is a Brexit, which affects the demand
and supply in the market and affects the productivity of the Volkswagen.
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Economic factors: Here inflation has a huge impact on the change in the demand of the
customer as the price of the car's are higher as usual which tends to decrease the purchasing
power of the customer. Another factors is Brexit which mean the withdrawal of the united
kingdom from the European market further it means to decline in the demand of the cars. (eh and
Corbitt, 2015)
Social factors: Under this factors, the social and cultural trends are different for every
customer in terms of income, attitudes, and social beliefs and demographic etc. The social
environment has a huge impact on the sale of Volkswagen as some of people chose to use
different medium such as Uber and ola and many another rental car services instead of taking the
ownership of the car.
Technological factors: It is a factor which affects the market of Volkswagen as advance
technology is coming up in the market such as self-driving cars with the use of artificial
intelligence, radar and sensors techniques. (Torrent-Sellens, 2015).Further this will make changes
in the technology use by the Volkswagen which will increase the price of the cars and decline in
the demands of car in the target market.
Legal factors: Here,in the US in the 2015, the authority of environment protection
agency has sparked as scandal which has announced that Volkswagen had intensely cheated on
diesel engine emission test. Between 2009 and 2015, Volkswagen] has built temporary software
which decline the emission during the test and fails on the ground of legal regulation
requirement. This scandal results in decrease in the sale of the cars as well in the stock price and
company have to bear loses in the billions of dollar.
Environment factors: As the environment in which Volkswagen works is complex as
well as dynamic in nature. Company can make use of such changes as a opportunities and
dominates the market like electric and self-driving car in the market(Anwar and Hasnu, 2016)
According to the Pestle analysis, it is examined that external factors of Volkswagen
group current and future business strategies can be affected to certain areas. While having trade
tariffs, legal regulation and consumer preference can pose threat to Volkswagen and while on the
another hand, using green vehicle helps them to build good image in the market.
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