Business Strategy and Performance Analysis

The assignment provided is a collection of research papers and studies on the topic of business strategy and performance. It includes 17 references to academic articles and journals, exploring various aspects of business strategy, including its impact on firm performance, executive compensation, and corporate social responsibility. The documents cover different themes such as small business performance, shared leadership, technology strategy, sustainability, and work-life balance issues. This comprehensive analysis is suitable for students and researchers in the field of business management and entrepreneurship.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy can be defined as an organization's planning to reach specific goals or
target. A successful business strategy is determined by growth in business, strong financial
performance and strong competitive position. Volkswagen Group is the largest automotive
company in Europe founded in 1937, and handling around twelve brands such as Audi, Skoda,
Porsche henceforth. It is operating two businesses primarily: Automotive business and Financial
Services Business. In this report business strategy, its implementation as well as appropriation is
highlighted. This report have a brief of strategic planning, its execution and factors that has
major influence in it (Blackburn, Hart and Wainwright, 2013). In addition to this, it contains case
study on market strategy of Volkswagen, its internal or external business environment and its
implementation.
TASK 1
Covered in PPT
TASK 2
2.1 Organizational audit
Strategic planning is an organization process of well defined direction, goals, objectives,
vision strategies and decision making on allocation of its resources in a manner that it is enable
to reach its stated vision. Volkswagen Group is largest automaker company in Europe. It uses
Value based positioning strategy to develop inspirational and emotional connection with its
customers.
Strengths:
Global approach: Volkswagen group is the oldest car manufactures and well established
against its competitors. Germany is stronghold by Volkswagen. However the company
has around 70 production plants and their approach is in close to 149 countries across the
world.
Well structured brand: Volkswagen is a very well structured brand and it produces high
engineered super cars, passenger's car and buses as well. It has various products in its
portfolio, where each strategic business unit is responsible in the success, and branding
as well as smooth and efficient structure (Iacob, Quartel and Jonkers, 2012).

Excellency in research and development: Volkswagen have built most high technology
cars with excellency in their performance. For this, the R&D department of its sub brands
have given it products beyond expectation.
Weaknesses:
The emission scandal: This scandal affected the whole organisation thoroughly and due
to this near about five million cars were returned to the company. This scandal have
affected the goodwill of the firm in negative manner.
Existing Competitors: There are many automotive companies in competition to
Volkswagen. So to stay in market Volkswagen has to play with its pricing in competition
to its competitors like Ford, Hyundai, Toyota etc. and suffer low margin on product,
which also affects the brand.
Opportunities:
Hybrid/fuel efficient/ auto driven and innovative car designs: Growing purchase
power of customer is the biggest opportunity for automotive companies to manufacture
products which are technology oriented and ecologically concerned (Wang and Verma,
2012). In coming time fuel will be costlier so fuel efficient and hybrid cars will drive the
automotive industry.
Worldwide expansion: The demand of the product will only increase by growing GDP
and rise in need of product. Volkswagen should try localising their product and strategies
as per local requirements to tap more emerging countries and world wide expansion.
Threats:
Declining Brand reputation : Due to emission scandal the brand image of Volkswagen
was completely affected. Volkswagen have spent a huge amount to rebuild the brand
positioning, however many people are still not confident about this brand.
Rise in Competitors: The automotive industries is an open market for all new
technology and innovations. So the competition will never be decreasing for Volkswagen.
2.2 Environment Audit
Environment audit can be defined as the process to assess whether an organization is
doing proper environmental compliance considering all political, economical, social,
technological, environmental and legal factors (Alsudiri, Al-Karaghouli and Eldabi, 2013).

Environment Audit of VW AG: Environment audit of VW AG can be done with help
of PESTEL analysis:
Political Factors: From small companies to big companies, every organization is get
affected by political factors in terms of political instability and heavy taxes rates. VW AG is also
affected by political factors in terms of Trade policies of different countries. Trade policies of
other countries leave direct impact over VW AG. If VW AG has to import auto parts from other
country then it have to consider all trading policies, like tariffs, trade barriers etc. This will
directly impact to VW AG because if tariffs are more than VW AG has to pay more for spare
parts.
Economic Factors: Fluctuations in economy, for instance, inflation in which prices are
there on top. VW AG gets affected by economic factors in terms of; if inflation is there in
economy, VW AG have to pay higher amounts for auto parts.
Social Factors: Social factors like, people's tastes, preferences, trends are rapidly
changing day by day. These factors also affect VW AG because they have to update their way of
doing business because they are under duty to produce commodities as per requirements of
customers.
Technological Factors: New technologies are introduced day by day and this affect an
organization (Chen and Jermias, 2014). For example, they have to train employees to work on
new technologies, which in turn raises training cost. There are so many technological challenges
that are taking place in environment such as automation in the industry.
Environmental Factors: Environmental factors such as pollution laws, affect working of
an organization. For instance, VW AG manufactures cars which may produces high amount of
pollution in environment. This will affect VW AG in terms of that because of pollution law, they
are bound to limit their production to avoid pollution in environment.
Legal Factors: Legal factors will also have impact on VW AG in forms of, for example,
legally it is mandatory to fulfill pollution norms and non compliance can result in serious
problems like cause harm on reputation of VW AG.
2.3 Stakeholder Analysis
Stakeholder Analysis: This is a technique conducted to know the stakeholders have
substantial interest in company (Coad, 2011). This is important to identify key stakeholders and
analyzing their needs and to develop strategic view in them for the project concerned.
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Importance of Stakeholder Analysis:
1. Projects can get completed in given time with help of powerful stakeholders.
2. More resources can be utilized to fullest if there are key stakeholders in an organization.
3. Understanding can be build with stakeholders while communicating with them about
workings of projects.
4. And understanding creates a sense predict stakeholder's reactions regarding project.
Importance of Stakeholder Analysis in VW AG: There are so many stakeholders in
VW AG who have substantial interest in it. So, to find out key stakeholders out of them, VW AG
conducts this analysis. Two terms are there; power and interest.
For an example: There are so many stakeholders in VW AG such as, customers,
community they all have key interest in the company.
Some stakeholders have high power and low interest, some have low power and high interest.
So, to find out key stakeholders among them, an analysis is conducted (Dey and Sircar, 2012).
1. Stakeholders having high power but low interest in VW AG, have to keep satisfied them
with enough work so that they do not get bored with extra work.
2. Stakeholders having high power and high interest in VW AG, have to satisfy them with
greater efforts, because they are to be managed very closely. VW AG have to directly
engage with them to make realize them, that they are important to company.
3. Stakeholders which have low power but high level of interest, VW AG have to keep them
adequately informed about company to make sure them that no big issues are there in
company.
Stakeholders which have low power and low interest, VW AG have to make greater
efforts to monitor these stakeholders so that they can increase their level of interest and power
which will be better for them and VW AG, as well. There are various stakeholders for them;
customers, suppliers, community, employers, business partners, etc.
2.4 Presenting a new strategy for VW AG
Business strategy is a disciplined effort which produces all necessary decisions and
actions that helps to shape and guide regarding organization, its products, its goals and objectives
and long term profit (Murthy, 2012). Effective business strategy ensures an organization's
deviation in its actual performance from its vision, mission and standard performance. To
improve brand loyalty and growth of Volkswagen, company need to implement successful
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business strategy or planning. Market Development is one from the four growth strategies given
in Ansoff matrix and it involve expansion of market by selling existing product into new market.
It is a marketing strategy in which company can sell their existing product into a new group of
consumers. It may include promotion of product into a new geographical ares, or use of different
media channels. Market development is a strategic step taken by a company to exploit and
promote an existing market. In expansion of market company may include entering new
segments of the market, increasing usage per user and converting non users into users. These
steps must be fulfilled by focusing on following aspects:
 Selling of existing product to new customers on the basis of psycho-graphic segmentation
(Li-Hua and Lu, 2013).
 Getting customers to spend more
 Strategy must be designed to earn more profit
 It might be needed to modify an existing product.
 Promoting existing product with its new use and need.
 Target customers must be identified and researched thoroughly on the basis of
demographic, geographic and psycho-graphic characteristics.
 Identification of new geographical area to sell existing products.
Volkswagen company can implement market development strategy and to make
successful implementation of it Volkswagen group will focus on segmentation of customer on
the bases geographic, demographic and psycho-graphic characteristics to develop new customer
segment and improve their brand image. However this will help Volkswagen to expand their
market globally and improve their brand image also.
3.1 Appropriateness of alternative strategies
Alternative business strategies are very helpful as they provides solutions for various
challenges problems of business (Helms and Whitesell, 2013). Market entry is a strategy related
to introducing or delivering products in target markets, with the help of planned methods. In
order to develop the market for VW AG, entry strategy is very much effective because it gives
opportunity to capture big share of market. Various techniques can used by VW AG; joint
venture, franchising, merger&acquisition, etc.
Substantive growth strategy is effective when VW AG ensures proper integration and
diversification strategies. Like, they can manufacture raw materials rather take it from suppliers.
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With the help of this, they can establish their own distributions channels in order to make
products available to customers when they actually need them. On the other hand, diversification
can be done by them, introducing new products in new product lines.
Limited strategy is adopted by organizations when they are offering products and
services with tiny or slight variations, than before. There are so many opposite situations that
occurs in businesses like low profitability, losing market share. So, to survive in these adverse
conditions, limited growth strategy is effective in which VW AG can penetrate their existing
markets. This kind of strategy is appropriate where VW AG have to identify competitor's plans
and strategies and market trends could be analyzed, as well.
Another alternative strategies like retrenchment strategies can be adopted by businesses
when so much adverse conditions are there like; particular business operations are not giving
expected profits and have small growths, than organizations decide to eliminate such business
operations by adopting divestment and liquidation strategies (Kellermanns, Dibrell and Cruz,
2014). If VW AG adopts retrenchment strategies, its appropriateness for them is that they can
manage resources properly to make investments somewhere from which they can get benefits in
order to meet customer's needs and demands and hence it ensures efficiency.
Market conditions Market Strategies
Perfect Competition Direct Market Strategy
Monopoly Personalized Market Strategy
Oligopoly Community Marketing Strategy
Monopolistic Niche Marketing
3.2 Justification of selected strategy
As per the analysis of case study, it has been noticed that VW AG is going good in their
markets and meeting customer's demands, but it is still away from expectations of VW AG. They
are growing fast in car industry but their expectations are yet to met. So, in order to meet their
expectations, they have to re-check their business strategies and decisions.
So, with the above discussion it has been analysed that limited growth strategy should be
chosen whose focus is on product and market development and so VW AG can focus on
customers and competitors, as well. One main reason is that VW AG can solve the issues arising
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out of company, by using limited growth strategy. They can have so many advantages by
adopting limited growth strategy;
Avoidance of debts: By adopting limited growth strategy, VW AG can reduce high
amount of debts because it is not too much expensive strategy to be adopted. Because if
managers want that their company should grow at higher pace, they have to increase their costs
in form of hiring new staffs and giving trainings to them (Granados and Gupta, 2013).
Easy Management: Rapid growth often increases burdens over managers to manage
from operations till taking and framing decisions. This might can create chaos between members
of an organisation. So, by adopting limited growth strategy, VW AG can easily manage their
business.
Following selected market strategies can be justified with the help of this discussion:
In perfect competition, direct market strategy has been chosen because this strategy helps to
know that which offers are giving best results. Perfect competition have large number of buyers
and sellers with higher prices. In monopoly, there is single seller selling unique products there is
no competition because no substitute is there and hence personalized market strategy has been
chosen. In Oligopoly, there are few firms selling products with no control over price and hence
community market strategy is taken. In Monopolistic competition, the producers sells products
without having close substitutes so, niche marketing strategy has been taken.
VW AG by adopting limited strategies can make them efficient in offering new products
with new product line and hence innovation is also established with the help of this.
So, adoption of Limited growth strategies can help VW AG to focus on their main
business and it is compatible to their other business size and structure, as well. And hence
selected limited strategy for VW AG is justified and it is feasible and profitable with strategic
point of view.
4.1 Roles & responsibilities of personnel who are charged with strategy implementation
Business strategy, a framework to achieve goals and objectives; will only be
implemented successfully only when whole organisation will contribute to it. There must be
unity in goal and objectives of organisation and individuals. However, it is necessary to bring
coordination between all the departments and employees to attain specific goal successfully in
optimum use of of resources and efforts. While implementation of planned strategy in business,
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the general manager, functional managers and employees all are assigned with some roles and
responsibilities like:
Role and Responsibilities of Personnel:
 Project investment management- To implement business strategy, it is required to
make appropriate planning with regards to availability of resources like funds and human
resources. To achieve goals, all functional managers also determine the required time
duration for strategy implementation and process while planning.
 Resources management- The manager is responsible for allocation of required resources
in all department to complete goals and task. Furthermore it is also required to provide
guidance and direction to team members wherever it is required. The employees and staff
are also provided with necessary training or coaching timely.
 Strategy management mentoring- To implement successful strategy in a business a
manager is responsible for team management, assigning workload to team and monitor it.
Here review of existing business strategies also take place for identification of gaps and
deviation in goals attainment and necessary changes are made (Davis, 2012). It is
necessary to establish better and open communication with employees as well as giving
timely appreciation and motivation of employees.
Volkswagen company should assign their strategic manager with these key
responsibilities to attain their desired results. At the same time this will also help in building
good relation with employees.
4.2 Analysis of estimated resource requirements for implementing a new strategy for VW AG
After deciding their strategy, company need to gather necessary resources to implement
it. It can include Funds, human resources, physical resources and informational resources. The
application of strategy decided by organization will depend on availability of funds required for
it. In addition to this, it is also needed to know the manpower required for completing the task
assigned during implementation of strategy. However company can also hire human resources by
conducting interviews and selection processes. For market development strategy, physical
resources like outlets may required. While implementation of new strategy, informational
resources are necessary for market segmentation and to reach customers. Information resources
may include customer database, IT infrastructures etc. To increase business growth at
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Volkswagen, company has to assemble all resources like funds, R&D team, HR and database of
customers that has to be targeted.
4.3 Contribution of SMART Targets to achievement of Strategy implementation in VW AG
Once VW AG has planned their objectives and targets, they should develop several goals
that will help them to be successful in future. So, goals should be SMART, which stands for
Specific, Measurable, Attainable or Achievable, Realistic and Time-based, respectively.
In VW AG, SMART targets will help them in achieving objectives in planned manner.
SMART targets are set quantity which helps company to grow in right direction. Evaluation is as
follows:
'S' stands for Specific targets which are the specified set increment in market share and
profitability. For instance, VW AG has set target that they have to increase market share, sales
and profitability up to 5% quarterly.
'M' stands for Measurable targets which that every organization set in order to measure
that goal is obtainable or not and how far away the completion is (Dandira, 2011). It states that if
VW AG set targets in numerical terms as in, 5 % increment in market share, then it will make
easy for them to find out that whether their set targets are obtainable or not.
'A' stands for Attainable or Achievable which helps to know that whether the set targets
are attainable or not. It is so obvious that if above two goals are implemented in an effective
manner by VW AG, then target will also be achieved in an effective manner.
'R' stands for Realistic which means that if VW AG has set target to increase their sales
and market share by 5% quarterly, then it should be realistic. There should not be any unrealistic
and irrelevant facts made by company that they cannot complete.
' T ' stands for Time-based targets which tells aspects that if VW AG has been set targets
to be completed within set and specified time as in one year, then they have to complete project
within that chosen time because now it is time bound.
Above discussion shows that SMART targets helps companies like VW AG to set and
complete targets smartly so that they can avoid slowdown workings.
CONCLUSION
From the above report, it has been concluded that Strategic Planning and business growth
strategies are indispensable and important factors to be considered by VW AG to make strong
position in market against competitors. The learning of this study is to enhance knowledge about
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various factors which are considered in strategic planning. This project studies role of PESTEL,
SWOT, and Stakeholder analysis. Furthermore, it throws light on resources that helps in
implementing strategies, roles and responsibilities of personnel charged with strategy
implementation and along with it clears role of SMART targets in achievement of strategy
implementation.
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REFERENCES
Books and Journals
Alsudiri, T., Al-Karaghouli, W. and Eldabi, T., 2013. Alignment of large project management
process to business strategy: A review and conceptual framework. Journal of Enterprise
Information Management. 26(5). pp.596-615.
Blackburn, R. A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Boies, K., Lvina, E. and Martens, M. L., 2011. Shared leadership and team performance in a
business strategy simulation. Journal of Personnel Psychology.
Chen, Y. and Jermias, J., 2014. Business strategy, executive compensation and firm
performance. Accounting & Finance. 54(1). pp.113-134.
Coad, A., 2011. Appropriate business strategy for leaders and laggards. Industrial and Corporate
Change. 20(4). pp.1049-1079.
Dandira, M., 2011. Involvement of implementers: missing element in strategy formulation.
Business strategy series. 12(1). pp.30-34.
Davis, P. J., 2012. A model for strategy implementation and conflict resolution in the franchise
business. Strategy & Leadership. 40(5). pp.32-38.
Dey, M. and Sircar, S., 2012. Integrating Corporate Social Responsibility Initiatives with
Business Strategy: A Study of Some Indian Companies. IUP Journal of Corporate
Governance. 11(1).
Granados, N. and Gupta, A., 2013. Transparency strategy: Competing with information in a
digital world. MIS quarterly. 37(2).
Helms, M. M. and Whitesell, M., 2013. Transitioning to the embedded librarian model and
improving the senior capstone business strategy course. The Journal of Academic
Librarianship. 39(5). pp.401-413.
Higgins, D., Omer, T. C. and Phillips, J. D., 2015. The influence of a firm's business strategy on
its tax aggressiveness. Contemporary Accounting Research. 32(2). pp.674-702.
Iacob, M. E., Quartel, D. and Jonkers, H., 2012, September. Capturing business strategy and
value in enterprise architecture to support portfolio valuation. In Enterprise Distributed
Object Computing Conference (EDOC), 2012 IEEE 16th International (pp. 11-20).
IEEE.
Kellermanns, F. W., Dibrell, C. and Cruz, C., 2014. The role and impact of emotions in family
business strategy: New approaches and paradigms.
Li-Hua, R. and Lu, L., 2013. Technology strategy and sustainability of business: Empirical
experiences from Chinese cases. Journal of Technology Management in China. 8(2).
pp.62-82.
Murthy, V. P., 2012. Integrating corporate sustainability and strategy for business performance.
World Journal of Entrepreneurship, Management and Sustainable Development. 8(1).
pp.5-17.
Wang, J. and Verma, A., 2012. Explaining organizational responsiveness to work‐life balance
issues: The role of business strategy and high‐performance work systems. Human
Resource Management. 51(3). pp.407-432.
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