Understanding the Process of Strategic Planning

This presentation provides an in-depth understanding of the process of strategic planning in business strategy. It covers the Volkswagen vision, mission, objectives, and core competencies. It also discusses the factors, both internal and external, that influence strategic planning, as well as the issues and techniques involved in developing a strategic business plan.

Business Strategy
TASK 1 (LO 1) UNDERSTAND THE PROCESS OF
STRATEGIC PLANNING

Volkswagen Vision
“To be the most successful, fascinating and sustainable automaker in the world”

Volkswagen Mission Statement
“Our pursuit of innovation and perfection and our responsible approach will help
to make us the world’s leading automaker by 2018 – both economically and
ecologically”

Volkswagen Objectives
To become a world leader in customer satisfaction and quality
 To capture above-average share of growth in major markets
 To ensure group’s solid financial position thereby an ability to act in difficult market
periods
 To have highly qualified, fit and motivated team which is essential to build the best vehicles

Volkswagen targets to achieve objectives
 Aims to deploy intelligent innovations and technologies to achieve high customer satisfaction
 Target to achieve unit sales of more than 10 million vehicles annually in the targeted markets
 Intends to generate return on sales before tax of at least 8% to secure financial position
 Goals to be the most attractive employer in the automotive industry by 2018

Core Competencies
The main core competency of the Volkswagen Group is environmental friendly technological
development. It has been evident in following activities:
 The group has cutting edge technology under EcoFuel label that offers eco-friendly economic cars
 Volkswagen intensively works on the continues research and development activities in order to refine
recycling methods, processes and technologies to protect the environment.
 High performance TDI diesel technology is another core competency of the company which ensures
environmental-friendly diesel consumption in its cars

Factors to be considered while
formulating strategic plans
Following factors should be considered in the formulation of strategic plans
 Communication
 Engagement
 Culture
 Innovation

Internal factors that influence strategic
planning
Following internal factors influence the strategic planning process:
 Organisational Structure
 Leadership style
 Organisational culture
 Human resource

External factors that influence strategic
planning
Following external factors influence the strategic planning process:
 Political environmental factors
 Economic factors
 Social factors
 Technological factors

Issues involved in strategic planning
 Detachment from reality
 Paralysis by analysis
 Confusing strategy with strategic plan
 Lack of ownership
 Dampening of innovation

Effectiveness of techniques used in
developing strategic business plan
BCG Matrix of Volkswagen Group

Effectiveness of techniques used in
developing strategic business plan
BCG Matrix of Volkswagen
Stars: Volkswagen, Audi- Extremely popular brands of the group. They offer innovative products to the market every year,
with their new model releases. These two brands sell the most units of all the Volkswagen brands.
Cash Cows: Bentley, Lamborghini- These brands appeal to the high end luxury markets. This market is expected to be flat
with respect to growth, however these high price vehicles bring maximum revenue.
Question Marks: Seat (Fiat 500)- These brands have low market volume however, there is a growing market for such type of
vehicles.
Dogs: Commercial Vehicles- Though Volkswagen produces quality commercial vehicles, but due to intense competition in
the commercial segment they lag behind already established players (Tillemann, 2015).

References
Skeet, A., 2015. VW: No Mission, No Vision, No Hope. [Online]. Available through: <http://blogs.the-
ceo-magazine.com/guest/vw-no-mission-no-vision-no-hope>. [Accessed on 26 February 2017].
Müller, M., 2016. “TOGETHER – Strategy 2025”. [Online]. Available through:
<https://www.volkswagenag.com/presence/investorrelation/events/2016/strategie-2025/
EN_Strategie_PK_M%C3%BCller_VERTEILVERSION_final.pdf>. [Accessed on 26 February
2017].
Tillemann, L., 2015. What the Volkswagen scandal says about the rise of Tesla. [Online]. Available
through: <http://fortune.com/2015/09/25/volkswagen-scandal-tesla/>. [Accessed on 26 February
2017].
Mintzberg, H., 1987. Crafting Strategy. [Online]. Available through:
<https://hbr.org/1987/07/crafting-strategy>. [Accessed on 26 February 2017].

CONTD.
Richards, L., 2017. Techniques Used in Development of Business Plans. [Online]. Available
through: <http://smallbusiness.chron.com/techniques-used-development-business-plans-
2558.html>. [Accessed on 26 February 2017].
RUMELT, R., 1980. THE EVALUATION OF BUSINESS STRATEGY. [Online]. Available
through: <http://teaching.up.edu/bus580/bps/Rumelt,%20evaluation%20of%20a%20business
%20strategy.PDF>. [Accessed on 26 February 2017].

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