Business Strategy Analysis of Bentley-Volkswagen: A Comprehensive Study

This comprehensive analysis delves into the business strategy of Bentley-Volkswagen, examining its macro-environment, internal capabilities, competitive forces, and strategic planning. Using frameworks like PESTEL, SWOT, and Porter's Five Forces, the study explores the company's strengths, weaknesses, opportunities, and threats. It also analyzes the impact of demographic, economic, socio-cultural, technological, and ecological forces on Bentley-Volkswagen's operations. The paper concludes with a strategic planning framework for the company, highlighting key areas for improvement and future growth.

Business Strategy
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Table of Contents
Introduction................................................................................................................................3
1. Applying appropriate frameworks; analyse the impact and influence of the macro
environment on Bentley-Volkswagen and its strategies. P1......................................................3
2. Analyse the internal environment and capabilities of Bentley-Volkswagen using
appropriate frameworks. P2.......................................................................................................6
3. Applying Porter's Five Forces model evaluate the competitive forces of the sector of the
world retail car industry in which Bentley-Volkswagen operates.P3........................................8
4. Applying a range of theories, concepts and models, interpret and devise strategic planning
for an organisation such as Bentley-Volkswagen. P4..............................................................10
Conclusion................................................................................................................................12
References List.........................................................................................................................13
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Introduction
Business strategy is the simple plan of the firm to reach the objectives of their respective
business. It is used to achieve vision, prior objectives, successful completion and optimizing
financial issues.
The assignment will highlight the strategies and frameworks of the business of Bentley-
Volkswagen to deal with the macro-environmental elements, analysis of internal factors,
competitive forces and strategic planning for the company.
1. Applying appropriate frameworks; analyse the impact and influence of the macro
environment on Bentley-Volkswagen and its strategies. P1
Every Organisation do not operates in the market alone. They are surrounded by larger
contextual elements in the market that is termed as Macro environment. The macro
environment consists of five major forces namely demographics, economic, socio-cultural,
technological and ecological forces and precisely they are responsible to shape opportunities
as well as bring unusual threats to the company (Charan, 2017).
Figure 1: Macro Environment of Bentley-Volkswagen
(Source: Claessens, M. (2018))
Demographic Forces
Demography refers to people and the influence of human populations on the market and the
business is termed as the Demography Forces. The force explains the impact of population’s
age, density, age, gender, occupational and others on the business of the organisations. The
large and diverse opportunities demography offers both opportunities and threat to the
business.
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For the business of Bentley-Volkswagen, demography forces affect the wide range of high
quality goods and services that are designed to the Bentley enthusiast (Whittall et al., 2015).
There are people across the globe that choices shift from new and innovative car designs to
classic Bentley car models. The Baby Boomers who are born between 1946 and 1966 are
passing to the age group of 30-50 years are bringing changes in their tastes, concerns and
values and purchase luxury cars instead of family minivans. Bentley has applied strategies to
target these people since they inherit more wealth from aging parents to any other age groups.
Economic Forces
These forces are related to factors that governs the customer purchasing power and the type
of spending pattern. Some of the important criteria that determines the economic forces of
any organisation are: GDP, GNI, Import Duty rate, Sales tax/VAT, unemployment, inflation,
and more importantly spending patterns. These forces will always remain one of the main
forces that affect the automobile industries because of the nature of sales volume all across
the globe.
In the organisation of Bentley-Volkswagen, the economic situations are gloomier. This is
because the company is enlisted as the top selling and high quality class production of car
models. The organisation applies strategy of inflation and interest rates. During the inflation,
the prices of the products increase at the faster rates than compared to the personal income of
the population (Raschke et al., 2014). This causes decline in the customer buying power but
there are some customers who fears that the prices may rise further and may be far more
reachable in the future, so they tend to invest on the luxurious Bentley models with the help
of car loans and savings. The organisation targets the customers with his kind of mentality.
Socio-Cultural Forces
The forces are responsible to relate the business to the factors that affects the basic values,
preferences and behaviours of the society. People are the part of the society and cultural
groups that shape the beliefs and ideology that affects the business of the organisation in the
market.
The change in the social beliefs has changed the marketing and the business strategy of
Bentley-Volkswagen. The change states that there is an emergence of knowledge era from the
information era (Redshaw, 2017). The basis of the organisation with the society is mentioned
below:
 Mutual trust
 Genuine with every type of customers
 Work together in a straightforward and reliable way
 Believe that the right choice will only prevail if power dictatorship, rank, position and
origin are not important
 United
The organisation works and manufactures products and services in an algorithm to regain and
harden the trust and values of their customers so that at any time they can restore the public
image of the organisation. They imply strategies like focusing on diverse needs of the
customers and generate the maximum benefits for them. The strategic KPIs (key performance
indicators) of Bentley include loyalty rate, conquest rate and breakdown.
Technological Forces
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Technological forces are the most crucial factor in the macro environment. This is because
these are the only forces that determine the creation of new technologies and innovative
products through which the organisation that are looking for opportunities can withstand in
these competitive markets.
The Bentley-Volkswagen group are recently started working on Streamline Modular
Architecture that allows cutting out the expenses in the architecture by 30% by the end of the
year 2025. They are working on the systems that focus electrification and self-driving
systems. The organisation is working on self-driving and AI as their fifth initiative so that
they are able to bring automated driving functions to market and make this as their core
features in their products by the end of 2021. They are implying designs that target the
market to battery driven automobiles by the 2025 (Gong, 2015). These are the technological
strategies that are going to help the organisation to hold the market in the future.
Ecological Forces
Ecological forces are the decisions made by the organisation to relate their operations to the
nature and the environment. The environmental and ecological concerns have grown in the
recent years have grown more strong. This is because air, water and soil pollution are the
common headlines nowadays and every marketers needs to be aware and they shall operate in
accordance to reduce the pollution causing methods.
The Bentley-Volkswagen group follows the environmental strategy since the stakeholders of
the organisation have increased expectations of companies and particularly the environmental
issues (Ulfsdotter et al., 2014). Some of the important areas where the company focuses are:
 Intelligent mobility: the concept brings together the people’s desires of mobility and
comfort along with protection of the environment and reduced traffic inefficiencies.
 Resources conservation: The products and services of the organisation are
manufactured in such a way that they have environmental footprints across the entire
lifecycle of the company. The operations of the organisation apply holistic approach
so that the environment is protected along with conservation of finite resources.
 The products that are manufactured in the organisation guarantees to be the
environmental friendly. The features that are offered by the products of the company
are mainly the combination of “state-of-art-technology, comfort, safety, low fuel
consumption and lower emission of CO2 with long-term goal of zero-carbon
mobility.”
 Each and every employee is well aware of the laws and enforcements of environment
throughout the company and practices their operation in accordance with that.
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Figure 2: The Environmental Strategy’s holistic approach of Bentley-Volkswagen
(Source: Annualreport2014.volkswagenag.com. (2018))
2. Analyse the internal environment and capabilities of Bentley-Volkswagen using
appropriate frameworks. P2
The business organisation Bentley-Volkswagen comprises of factors within which the
company approach their operations towards success. In the above discussion, the external or
rather the macro environmental factors were uncontrollable but these internal factors can be
controlled to some extents. Moreover, with proper management of internal elemental
strength, the company builds its path for success.
The most important internal factor of Bentley-Volkswagen is “Leadership”. The leadership
style as well as the management style of the managers and other higher official working in
the organisation impacts the organisational culture of Bentley-Volkswagen (Sharp, 2017).
The company has its own vision, mission and objectives, they are:
 Mission statement:
In the mission statement of Bentley motors it has been stated that their culture is to provide
luxury performance. In recent time, there has been a modern interpretation in their existing
mission statement and it states that “A fast car, a good car, the best in its class.”
 Vision statement:
The vision of the organisation is to become the world’s most successful, fascinating as well
as sustainable car manufacturer by the end of 2018 and to remain one of the world’s most
successful luxury car manufacturers.
 Objectives:
The objective of Bentley motors is mentioned in their product portfolio and it goes as: to
increase the number of vehicles sales per year to 20,000 units by the end of 2020.
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Every manager and leaders are responsible to work and apply strategies that will make them
to achieve the goal and objectives of the company in accordance with the mission and vision
of the company. Another internal factor that is essential for the company to follow is the
“strength of the employee.” The employees working in the organisations are well-motivated,
hard-working and talented. The Human Resources team and the managers work efficiently to
develop a friendly environment for the employees to work within the organisation. The
company only recruits from the best and the kind of treatment they get from the company in
terms of salary, incentives, rewards and other benefits; all are appraisals for their talents and
dedications. The team shows extreme level of unity by working tighter and rotating in certain
period (Luthra et al., 2016). This helps them to develop their quality, be motivated, and
increase their effectiveness and efficiency. Some of the resources that act as the internal
factors are as follows:
 Funding, opportunities for investments, sources of income and other financial
resources.
 Company’s location, equipments, machineries in every department, facilities offered
throughout the company and other physical resources.
 Easy access to patents, copyrights, trademarks and other natural resources.
Some of the other internal factors are described in the table below:
Internal Factors Description
Organisational and Operational  Organized record keeping
 Proficient Supply chain
 Updated IT systems and services.
Strategic risks  Ability to reach the company goals
 Positive impacts in technological
evaluations and custom34er demands,
Innovation  Innovative marketing plan
 Initiative to achieve successful
promotional plan
 Staff-training and welfare.
Financial Efficient financial structures risks have led to
lack of financial.
Employee Risks Efficient employee relations have reduced
problems and risks to employee.
Table 1: Internal factors of Bentley-Volkswagen
(Source: Created by the author)
The framework that is used to analyze the internal factors of the organisations is SWOT
Analysis (Do Quang, 2017). The SWOT Analysis has performed on the internal factors of
Bentley-Volkswagen.
Strengths The company is popular for its unique
mix of luxury and sports cars.
 The company offers uniqueness to its
Weakness
 Limited reach to global countries.
 Limited production every year
 Target only the niche segment of the
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brands and do not believe in
promotions.
 Efficient technological equipment and
R&D.
 Innovative Car designs.
 Known for its heritage.
 Excellent brand value.
population.
 Non-Environmental friendly
Opportunities To become more environment
friendly
 To merge with lower brands and start
acquiring other segments of the
population
 To focus on emergent markets.
 To attract more sponsors through
advertisements and promotions.
Threats
 Continuous change in government
laws.
 Excessive increase in fuel prices.
 Competitions.
 Economy.
Table 2: SWOT Analysis of Bentley-Volkswagen
(Source: Created by the author)
3. Applying Porter's Five Forces model evaluate the competitive forces of the sector of
the world retail car industry in which Bentley-Volkswagen operates.P3
Volkswagen is known to the most renowned automobiles company all across the globe. The
company is famous for its innovative automobile parts and car models as well as their
financial services. The company patents a large product portfolio that includes passenger as
well as luxurious vehicles such as Audi, Porsche, Bentley and Skoda. The organisation once
was falle3n victim to diesel scandal but by the ends of the year 2017, the organisation holds
their business from falling (Porter et al., 2014).
There is a five forces analysis of Bentley-Volkswagen below that analyzes the competitive
position of the organisation in the global market. The Porter’s five forces is an analytical tool
that is responsible to be used to plan growth and increase the level of competitions in the
market. The forces are as follows:
Bargaining Power of Suppliers: Low
The suppliers of Bentley-Volkswagen are scattered in various regions in the world due to
which the bargaining power of Bentley-Volkswagen group’s suppliers is comparatively low.
The suppliers have to follow the code of conduct that is created by the organisation. Since the
company is a large and financially strong that allows the organisation to have global supply
chain and distribution systems. The organisation frequently changes or rather switches to new
suppliers that leads to the lower bargaining power of the suppliers. Only the suppliers that
have tied long-term partnership with the organisation to deliver good quality raw materials
has some of the few bargaining power and are equally responsible in catering to fulfil the
organisational needs. Instead of training the suppliers, they usually choose only from the best
in the market and this cause the suppliers to compete with rapid and innovative improvements
in their services.
Bargaining power of Buyers: High
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With the emergence of the 21st century, the customers all over the globe have increased
bargaining power due to several factors. This is because there are many companies and car
manufacturer companies in the worlds that operate in the same way Bentley-Volkswagen
operates. The change in the bargaining power has usually due to the fact that most of the
customers are well-informed. The customers nowadays evaluates every aspect of the product
starting from quality to safety, environment friendly issues and fuel efficiency before the
customer decides to purchase. The Bentley has increased their modes of promotion through
advertisements and marketing to lure the customers. Therefore, it states that the increase in
bargaining power of customer has changed the practices of the company. It has been seen that
in the recent research, there is an increased competitions in luxury as well as in the lower end
segments and brand investments in Research and Development of the organisations. This is
because to increase the customer’s expectations by bringing better products. All these factors
are responsible in the increase in bargaining power of the buyers towards the organisation.
Threat of Substitute Products: High
Since there is an increase in the high competitions from several automobile brands in the
market, the threat of the substitute products is high. There are many other factors due to
which Bentley-Volkswagen has threat of substitute products apart from the above reason. The
other public transport modes act also as the threat to the company. The company has adopted
methods to improvise their car4 models to make them stylish as well as good quality. This is
how the company has decided to mitigate the threats of substitute products and they will do
that by building their financial strength and brand image. After applying the methods, there is
an increase in higher trust and less threat from the substitutes.
Threat of New Entrants: Low
The overall threat of new entrants to Bentley-Volkswagen is comparatively low. The reason
for this statement is that there is a presence of high barriers to the new entrants and thus
making it difficult for them to enter the market. The other reason is that there is a large
investment required for building infrastructure, manufacturing, marketing, promotions,
supply chain and distribution. The new entrants also have to invest high expenditure for the
human resources too. From the political aspect, there are legislations and regulations that also
are the reasons which make the entry of the new entrants difficult.
Rivalry in the Industry: High
As mentioned earlier there are companies like Lamborghini, BMW and others that are the
competitors that causes the threat of rivalry for Bentley-Volkswagen. This is because those
companies’ manufacturers matching products and car models that offers similar level of
quality and machine efficiency. This has led Bentley-Volkswagen to invest very large
expenditure in marketing as well as in Research and Development so that there is a
continuous improvement in their car models they manufactures and with those the
sustainability of the brand image as well as turnover remains high in the market. With this
strategy, the company will continue to bring new, improved, innovative and efficient car
models and automobile parts in the market so that they are not left behind in the competitions
in the market to which they belong and operate.
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Figure 3: Porter’s Five Forces of Bentley-Volkswagen
(Source: volkswagen, P. (2018))
4. Applying a range of theories, concepts and models, interpret and devise strategic
planning for an organisation such as Bentley-Volkswagen. P4
BCG (Boston Consulting Group) Matrix
BCG matrix is an analytical tool that is used to interpret the strategic planning for an
organisation. The tool is used to help the businesses to evaluate the growth opportunities by
reviewing the respective portfolio of the organisations. This helps the organisations to take
significant decisions on type and amount of investments and to discontinue or develop the
products (Torquati et al., 2018). The BCG matrix is divided into 4 quadrants that analyses the
growth of the market and relative market share. The BCG matrix of Bentley-Volkswagen
analyses the products and the car models that it has manufactured.
High Low
High Stars
 Bentley Speed Six
 Bentley T-series
 Bentley Mark IV
Question Marks
 EXP 12 Speed 6E
Concept
 EXP 10 SPEED 6
Concept
 Grand Convertible
Concept
Low Cash Cows
 Mulsanne
 Flying Spurs
 Continental
 Bentayga
Dogs
 Brooklands
 Azure
 Arnage
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Table 3: BCG Matrix of Bentley-Volkswagen
(Source: Created by the Author)
PESTEL Analysis
The PESTEL Analysis of Bentley Motors analyses the political, economical, social,
technological, environmental and legal fetors that influences the operation of the company
(Moritz et al., 2015).
PESTEL Analysis
Political  Political Stability
 Risk of military invasion
 Level of corruption
 Bureaucracy
 Intellectual protection of property
 Anti-trust
 Regulations for prices
 Taxation
 Wages Legislation
 Product Labelling
Economical  Type of economic system
 Exchange rates and stability of host
country currency
 Efficiency of financial markets
 Skill level of workforce in Financial
industries
 Labour costs and productivity
 Unemployment rate
 Inflation rate
 Interest rates
Social  Demographics of population
 Class structure, hierarchy, and power
structure
 Leisure interests
 Personal attitudes
 Culture of the population
Technological  Bentley Capital’s recent technologies
 Impact of technology on the products.
 Impacts on cost structure
 Impact on value chain structure
 Technological Diffusion rates
Environmental  Weather
 Climate change
 Regulated laws of environmental
pollution
 Recycling
 Endangered species
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Legal  Discrimination laws
 Employment laws
 Health and safety laws
 Data Protection laws
 Consumer protection and E-
Commerce laws
Table 4: PESTEL Analysis of Bentley-Volkswagen
(Source: Created by the Author)
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Conclusion
The strategy planning of the business of Bentley-Volkswagen has listed the important areas
where the improvements are highly required. The company should adopt strategies to reduce
the causes that will affect their finances and per capita sales. Thus, it can be concluded that
the company has applied number of strategies to counter the environmental, economical and
other so that the overall strategy of development and sustainability in the market.
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