PESTLE Analysis: Business Strategy

This assignment focuses on the PESTLE analysis framework, a tool used to evaluate external factors impacting businesses. It delves into various aspects of this analysis, including political, economic, social, technological, legal, and environmental influences. Students are tasked with understanding how these factors shape business strategy and analyzing real-world examples to illustrate the application of PESTLE analysis in diverse contexts.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Goals, objectives, core competencies, mission and vision statement of Azimo...................1
1.2 Components which should be reckoned while formulating new strategic plans..................1
1.3 Methods and their effectiveness which is used when developing strategic pans of firm......1
TASK 2............................................................................................................................................1
2.1 Strategic position analysis by taking help of organisational audit........................................1
2.2 Environmental audit of organisation.....................................................................................3
2.3 Stakeholder analysis and its importance while formulating new strategy............................4
2.4 New strategy of business enterprise......................................................................................5
TASK 3............................................................................................................................................5
3.1 Alternatives strategies which is interlinked with market entry, substantive growth, limited
growth or retrenchment...............................................................................................................5
3.2 Justification for selected strategy..........................................................................................6
TASK 4............................................................................................................................................6
4.1 Roles and responsibilities of personnel which takes part in strategy implementation..........6
4.2 Resources required for implementing new strategy within work place................................7
4.3 SMART targets and its contribution in the achievement of strategy implementation in firm
.....................................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is the managerial concept which provides right direction to company so
that it can accomplish its desired goals and objectives in a systematic manner. The most
important function of its manager is to make sure that he is developing new plans and procedures
to consider the business environment (Campbell, Edgar and Stonehouse, 2011). With the help of
effective strategies, organization can lead to high level of success and achieve competitive
advantage in marketplace. This report is focused on Volkswagen which is a multinational car
manufacturing company. In this report, different goals, objectives and core competencies of
Azimo has been determined which it wants to represent In front of dragons den. Some factors
and techniques has been evaluated which is highly import for implementing new strategy within
work place. Apart from this, organisational and environmental audit has been conducted to
determine actual position of Volkswagen. Along with this different growth strategies has been
determined which can be used by this company fro better growth (Connor and Lande, 2012).
Different roles and responsibilities of personnel has been assessed which are charged in strategy
implementation. At last, contribution of SMART Targets has been evaluated in achieving
strategy implementation.
TASK 1
1.1 Goals, objectives, core competencies, mission and vision statement of Azimo
Covered in PPT
1.2 Components which should be reckoned while formulating new strategic plans
Covered in PPT
1.3 Methods and their effectiveness which is used when developing strategic pans of firm
Covered in PPT
TASK 2
2.1 Strategic position analysis by taking help of organisational audit
Business strategy is a pattern which guides organization in making those effective plans
and procedures which can lead it to high level of growth and development. In present scenario,
almost all companies are getting attracted towards new strategy formulation and implementation
so that they can operate their business activities and practices in most effective and systematic
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manner. Business managers develop new strategies so that they can easily achieve their vision
and mission. Also, it can help organization in surviving in market place for long time period and
provides its right guidelines so that it can grow and develop in appropriate manner (Kirkwood,
and Walton, 2011).
It is huge responsibility of managers to determine all the factors of business environment
and current position of company while implementing new strategy within market place.
Volkswagen is one of the leading car manufacturer company which wants to implement a new
strategy in its work place so that it can achieve competitive advantage. Before implementing a
new strategy or making changes in its existing workplace its manager needs to conduct its
organisational audit so that they can determine all its strengths and weaknesses. They can take
help of SWOT analysis to determine its actual position in market place.
Strengths:
 This organization have great presence in all over the world. As, it operates in more than
153 countries. It is known as largest organization in Germany, second largest in China
and third biggest organization in Brazil.
 It covers such big area of auto mobile industry. Its strength can be determined its huge
number of workers which is approx around 600,000.
 This company gives core importance to its research and development department
because it believes that it can enhance its profit level only by satisfying actual needs and
wants of its customer.
Weaknesses:
 This organisation have such poor position in India which is considered as well growing
and developing market.
 Most of its car are not environment-friendly which influence a negative impact on its
corporate image (Huy, 2011).
 It face various problems because of its leading competitor Toyota.
Opportunities:
 By taking help of new and highly developed technology it can improve its existing
business position and also can give tough competition to its various market competitors.
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 By expanding its business into Indian market it can cover a huge number of market
share.
Threats:
 In present time, market position of Volkswagen is contentiously decreasing because of
carbon Dioxide Emission standards.
 Raw materials are also getting very expensive to buy.
 Various new entities has been established in market place which provides car on low
prices, it is also affecting financial position of company.
2.2 Environmental audit of organisation
Environment audit is as important as organisational audit. By evaluating macro
environmental factors, organisation can make most effective and successful strategies. It is
highly important for managers of Volkswagen to determine different external forces which can
influence impact on its strategy making. If company will not consider its business environment
then it can not implement successful plans and procedures within its work place (Andrews and
et. al., 2011). There are various components which should be considered by this company while
implementing new strategy. For this, organisation can take help of PEST analysis which involves
various factors and these are given below:
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Illustration 1: PESTLE analysis
(Source: Sparkrail, 2017) Political factors: Current position of this company is highly affected by Brexit. Now, this
company have to take permission from two major authorised bodies which are UK
government and Eu government. It becomes difficult for this organisation to consider
huge number of legal rules and regulations while selling its different products and
services. Economical factors: Due to low economic development, This organization is facing
various problems in United Kingdom. Poor economic condition of country force this
enterprise to sell its cars on very low prices through which it an not increase its profit
level. Social factors: It is those forces which is related with social groups. In present time,
people of UK are becoming so advanced so they requires cars with high technology
which is positive point for this company (Amin, Razmi and Zhang, 2011).
 Technological factors: It has become most important task for all organisations to take
help of technology while producing any product or making any important decisions. It is
very tough task for car manufacturers to update their technical resources on continuous
level as it requires high level of capital. So, it can increase operating cost of organization.
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2.3 Stakeholder analysis and its importance while formulating new strategy
Volkswagen is known as world's most popular car manufacturing brand. It is well known
for its quality products and services because it produce its each and every product only after
conducting market research. By conducting various market research it gets accurate information
about actual needs and wants of customer which helps it in producing cars as per their
requirement. But for better growth and development, it should gives importance to its all
stakeholders which are employees, suppliers, investors, top management and so on. It is very
much important for company to analyse its each and every stakeholder before implementing any
strategy within work place (Kajanus and et. al., 2012).
Organisation should gives high priority to its shareholders as well as employees because
without investors it can not get enough capita to operate its different business activities and
practices. On the other side, workers are those person who contributes their hard efforts in
producing quality products and services so that all needs of clients can be fulfilled. Apart from
this, suppliers and government are also most important stakeholder which should be analysed by
company while implementing new strategy within work place (Zalengera and et. al., 2014).
Suppliers are those persons who provides raw material to company so that it can convert them in
final goods, legal bodies are those which makes various rules and regulations which must be
followed by all organizations. It is very much essential for Volkswagen to evaluate needs and
demands of all these people so that it ca implement new strategy in most effective manner.
2.4 New strategy of business enterprise
With the help of new strategies organization can improve and develop its current market
position(Zalengera and et. al., 2014). For removing its all business problems and challenges it
should select cost leadership strategy through which it can easily become market leaders and also
can generate high level of profit. This company wants to implement new strategy in its work
place for various reasons such as it wants to fulfil customer needs in most effective manner,
wants to make its nearby environment safe, provide quality produce at low prices. With the help
of cost leadership strategy, Volkswagen can easily perform all these above mentioned activities.
If this company will produce and sell its product on low prices then it can manufacture goods in
huge quantity and also can satisfy customer needs. By selling cars at low prices it can give
opportunity to middle class families so that they can also purchase cars and can improve their
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living standard. By using strategy, it will produce its products at low cost which will minimise
pollution level as well. This steps will assist it in becoming ecofriendly.
By implementing cost leadership strategy in its work place, it can produce goods and
services in low cost and then can sell them in lower price within market place. If this company
will sell its product in low prices then it can give tough competition to its market competitors.
Customer like to buy those product which fulfil their needs and affordable for them. By
providing products on such affordable price, this company can attract a huge number of customer
and also can cover large market share. Also, it can take help of limited growth strategy through
which it can generate profit even with limited resources.
TASK 3
3.1 Alternatives strategies which is interlinked with market entry, substantive growth, limited
growth or retrenchment
There are various alternative strategies which can be used by Volkswagen to increase its
profit level and market share, these are follows as under:
MARKET ENTRY: It is most effective method which helps company in delivering current
products and services to a new target market and distribute goods there. In this organisation have
to manage contract with foreign country regarding importing or exporting. This strategy involves
business expansion. Volkswagen can take help of this strategy to increase its organisational
growth and development. With the help of this, this organization can provide its products and
services in all over the world and also can cover large market share. Organic growth: In this type of market entry strategy, company expand its business by
doing new product development, or making some new changes in its same work place. It
relates with past, that is why it is called as organic growth. Merger: It is that market entry, in which organisation combine with other organization
which provides same kind of product and services. This process is known as merger.
SUBSTANTIVE GROWTH: It is that strategy in which company focus on one factor which
works as its strength, that factor considered as company's strength and also helps organisation in
competing with its market competitors. In this strategy, organization does not take help of
supplier in fact it produce various raw material by itself so that it will not have to pay high
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capital to suppliers. With the help of this, company can have substantive growth (García, Jgómez
and Molina, 2012). Related diversification: This is most effective method through which Volkswagen can
easily accomplish its goals by diversifying its business. Horizontal: It is that substantive growth strategy in which organization tie up with some
high class company.
LIMITED GROWTH: It is that business strategy in which company avoids massive amounts of
debts. In this company do not look for direct business expansion. In fact, in this organisation
reach to organisational growth by funding through revenues. This strategy is used by those
companies which have limited number of resources. In this, company do not expand its business
and generates less financial profit so that it can just survive in market place. Market penetration: It is that strategy in which company introduce new products and
services within same market. This strategy involves less risks. Market development: This strategy is risky as compare to market penetration, because in
this company directly enter into new markets.
RETRENCHMENT: This strategy is used by company to minimise expenses by making goals
of making business more financially stable. This strategy includes withdrawing for specific
markets or discontinuation of selling particular goods and services for generating a goo
turnaround. Organization which are suffering from high debts can take help of this strategy. In
this, company offers big discounts on their products and services so that they can remove some
amount of their debts.
 Turnaround: This type of strategy is adopted by that company which are in undergrowth.
They choose this strategy so that it can make use of its available resources.
3.2 Justification for selected strategy
This organization has selected cost leadership strategy so that it can increase its customer
base also it will help this company in various ways which are follows as under:
 With the help of cost leadership strategy, this company can increase its customer base
and also can build strong corporate image within market place.
 By having large market share it can achieve competitive advantage in its domestic as well
as in international market (Butler and et. al., 2013).
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Hence, these are some major benefits of implementing market entry strategy. With the
help of this, company can utilise its available human, technical and financial resources in most
effective manner. This organization can use them in different manner while fulfil needs of
different market place. Also, it will help enterprise in achieving its all desired results.
TASK 4
4.1 Roles and responsibilities of personnel which takes part in strategy implementation
Strategy formulation and implementation is considered as most important part of very
business enterprise. Because by implementing new strategies company can lead to high level of
success and also can increase its market share. In strategy implementation various people plays
important role. All of them are follows as under: SENIOR MANAGERS: The senior managers are firmly found in large companies. The
responsibilities of the senior managers of Volkswagen are to provide the feedback of the
lower department to the directors. The managers are having more responsibilities than the
front line managers. They are the one who are listed in structure after the directors (Wang
and et. al., 2015). MANGERS: The responsibility of the managers is to note down the promotions and
positions within the organization. Volkswagen is the one who work with every employee
to create the career goals and plans for the employees who attains them. ENGINEERS: Their work may include defining problems, to narrow down the research,
analyse the criteria and finding the solutions for making decisions. As engineers in
Volkswagen spent there most of the time with the researching, applying, locating and
transferring the information (Tuyttens and et. al., 2011). RESEARCH STAFF: Most of the research staff is highly qualified and they are known
as the sub-investigators and they perform work as stated by the senior staff of the
Volkswagen company. This team thus not work on the primary data they believe in
secondary data to perform there task in a correct manner.
 EMPLOYEES: The responsibility of the employees in the organisational level is too take
care of themselves while working. They are responsible to provide feedback to there
seniors for the work provided to them. Each and every employee in the organization in
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responsible for the care of his/her colleague too. The employees has to complete task on
time span given to them.
Hence, these are main persons which takes part in strategy implementation.
4.2 Resources required for implementing new strategy within work place
There are various resources which is highly required by company to implement ne
strategies within work place and these are follows as under: HUMAN RESOURCE: This is the part of every organization that the human resource is
required by each company, without this resource none a company can make itself stable
in the market area. The Volkswagen rated top in the favour of human resource part. Also,
these resources are highly required for implementing new strategy within work place
(Benigni and Bossa, 2011). TECHNICAL: Technicality is related to the technology used by the companies to
market there manufacturing. Technical is very deep part of the company, if the
technicality of the company is not in right track than it creates hurdles for the
organizations. Volkswagen is having a great technicality likewise (machines, process
theory, materials) with the help of these they create history.
 FINANCIAL: Finance is the basic requirement for any of the company. Volkswagen is
the one who spent a lot amount on the technical resources, so that they can make
themselves a further than his competitors. Volkswagen makes finance from many
sources. The sources includes Investors, Stockholders, Loans etc.
Having a great resources in a efficient manner can help Volkswagen in creating good
market position within marketplace (Van Buren, Greenwood and Sheehan, 2011). According to
research the Volkswagen is having 3rd highest selling in United Kingdom.
4.3 SMART targets and its contribution in the achievement of strategy implementation in firm
Every organization have its own goals and objectives for which it makes various
strategies. In present time, market competition in increasing day by day, which is creating a huge
number of problems for Volkswagen. To exist in such competitive market place it have to
develop new strategies and on the basis of that it also have to set new targets and objectives by
which it can lead to high level of success. As, this organization is following market entry
strategy. So, it have to set its goals and objectives as per its new strategy. In this, it can take help
of SMART target because its is most helpful method by which company can set specific,
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measurable, assignable, realistic and time bounded goals. This company set its objectives to
consider SMART target concept. Current objective of this company is to expand its business in
in three countries within 1 year. By taking help of SMART Target it can easily accomplish this
goal. Specific: The most important responsibility of business manager is to set those goals and
objectives which can be communicates by employer to workers. In simple words they
should make specific and clear goals. For expanding its business it will select three
countries which are India, China and America. Measurable: By achieving above mentioned objectives this company can lead to high
level of success and growth. This company will measure its progress by determine its
new clients while managing its existing customer base. Attainable: Volkswagen should divide its employees into different groups so that they
can accomplish desired goals and objectives in most effective and systematic manner. For
better growth, it will ask its existing clients about referrals. Also, it will take help of
social media channels for marketing, so that it can make connections with local people of
that country. Relevant: This company have lots of financial, human resource and technical by which it
can make its outcomes more realistic. By increasing new clients in business, Volkswagen
can easily increase its organizational growth, development, profitability and productivity.
 Time based: Volkswagen have creates its goals by get influenced from SMART Target
concept. According to this approach, company should give time period to its each and
every objective so that they can be achieve within right time. This organization will
expand its business in just one year.
CONCLUSION
By evaluating this project report, it has been concluded that business strategy that part of
organization which assist it in achieving its desired outcomes in appropriate manner. This project
report is focused on Volkswagen which is a well growing car manufacturing company of this era.
In this project, its different strengths and weaknesses has been evaluated so that it can make
strategies according to them. Also, some macro environmental factors has been evaluated which
can influence negative impact on its strategy formulation and implementation. Also, concept of
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SMART goals has been determined so that it can target specific, measurable and attainable
objectives.
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REFERENCES
Books and Journals
Amin, S.H., Razmi, J. and Zhang, G., 2011. Supplier selection and order allocation based on
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Andrews, R. and et. al.,, 2011. Strategy implementation and public service performance.
Administration & Society. 43(6). pp.643-671.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Benigni, R. and Bossa, C., 2011. Alternative strategies for carcinogenicity assessment: an
efficient and simplified approach based on in vitro mutagenicity and cell transformation
assays. Mutagenesis. 26(3). pp.455-460.
Butler, J.R. And et. al., 2013. An analysis of trade-offs between multiple ecosystem services and
stakeholders linked to land use and water quality management in the Great Barrier Reef,
Australia. Agriculture, ecosystems & environment. 180. pp.176-191.
Campbell, D., Edgar, D. and Stonehouse, G., 2011. Business strategy: an introduction. Palgrave
Macmillan.
Connor, J.M. and Lande, R.H., 2012. Cartels as rational business strategy: crime pays.
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Huy, Q.N., 2011. How middle managers' group‐focus emotions and social identities influence
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Kajanus, M. and et. al., 2012. Making use of MCDS methods in SWOT analysis—Lessons learnt
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concerns and business goals. Australasian journal of environmental management. 21(1).
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Patent 8,773,502.
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Van Buren, H.J., Greenwood, M. and Sheehan, C., 2011. Strategic human resource management
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Zalengera, C. and et. al., 2014. Overview of the Malawi energy situation and A PESTLE analysis
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Online
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