Volkswagen Strategy Implementation Analysis

This assignment delves into the strategic implementation process at Volkswagen. It examines how both internal and external environments influence strategy execution, particularly emphasizing the impact of the external environment. The analysis includes various strategies planned for Volkswagen's growth and success, along with methods to assess resource needs for implementation. The roles and responsibilities of company managers and stakeholders are outlined, highlighting the crucial role of managers in driving strategic implementation. Finally, the document suggests tools for evaluating the suitability of chosen strategies.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Task 1: Process of formulating strategic Plans................................................................................1
1.1 Assessment of mission vision goals, objectives, and core competencies of Hungry house. 1
Mission........................................................................................................................................1
1.2 Elements to be considered while developing strategic plans................................................2
1.3 Evaluating the techniques for developing strategic plans for Hungry..................................3
Task-2 Formulating strategy ...........................................................................................................5
2.1 AN organisation audit for Volkswagen (VW)......................................................................5
2.2 conducting environmental audit for Volkswagen.................................................................6
2.3 Importance of stakeholder analysis in framing stratergy......................................................8
2.4 Developing new strategy for Volkswagen..........................................................................10
3. Strategic evaluation approaches................................................................................................11
3.1 Ascertaining the suitability of alternative strategies in relation to growth or retrenchment
for Volkswagen.........................................................................................................................11
3.2 Justifying the strategy selection .........................................................................................13
4. Analysing the way of implementing strategy............................................................................13
4.1 Assessment of roles and responsibilities of personnel in implementing strategy...............13
4.2 Evaluating the resource requirement in implementation of strategy..................................14
4.3 Calculating the contribution of SMART target to strategy achievement and
implementation in Volkswagen.................................................................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business strategy refers to designing of long term plans by
company to achieve its goals and objectives. Business strategy can also
be defined as the process of analysing mission, vision, goals and
objectives of the firm. Business strategy helps organisation in providing
direction in order to achieve its aim and objectives. It has a crucial role
to play in organisation as without proper guidance, company will not be
able to work smoothly.
The purpose of the study is to suggest effective strategic planning
for the Volkswagen company. Volkswagen is the leading organisation
dealing in Auto mobile sector. The study will include various processes
involved in strategy planning and implementation. The report will also
include the significance and influence of various people on organisation.
Task 1: Process of formulating strategic Plans
1.1 Assessment of mission vision goals, objectives, and core
competencies of Hungry House.
Mission
Mission is a statement that defines the purpose of establishment of a
particular firm. It helps organisation in analysing various the demand
and supply of product and services that the company is going to offer.
Mission statement of Volkswagen that contributes in strategic planning
are;
 To produce and deliver attractive, safe, luxury, safe and
environmental friendly vehicles.
 To expand its core business
 To earn higher profit.
 To gain high market share.
 To establish worlds standard in respective industry.
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Vision
Vision statement can be considered as the road map of any company. It
indicates what company wants to become and what position the firm
wants to achieve in the future, it helps in providing guidance by building
platform for growth of the firm.
Vision statement of Volkswagen
To become the top-rated auto mobile industry. Its mission is to have
focus on positioning as a international and economic as well as
environmental leader among auto mobile manufacturer. To be most
successful fascinating and sustainable auto maker.
Goals and objectives
The goals and objectives describes the target that the
company has to achieve throughout the year.
The objective and goal of the firm are:
1. To stand as winner in auto mobile industry.
2. To grow its business.
3. To introduce more services.
Core competencies
Core competencies refers to the skills that assist business in
gaining competitive advantage. The core competencies of Volkswagen
sales and marketing strategy. The organisation serves unique portfolio of
goods that is made up of successful brand that attracts customer.
Innovative skills has helped company in distinguishing their products and
services from that of competitors. Multi brand structure.
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1.2 Elements to be considered while developing strategic plans.
1. Factors related to industry-In planning strategy various
elements are needed to be analysed. These elements include
growth, competitive strength, profitability, market entrance etc. As
these elements may have great effect on its working.
2. Competition element: Examining the competitor’s position is
important part that need special attention while framing strategy
as this part may have great impact on survival of firm. The reasons
behind the success of any organisation is its understanding about
the competition in market and knowledge about its competitors.
3. Strength and weakness: Before planning or framing strategy
company should use swot analysis method in order to get
information about its strengths and weaknesses as this will assist
the firm in developing accurate strategy. In addition to this
appropriate strategy will help firm in reducing its weakness and
gaining competitive advantage.
1.3 Evaluating the Techniques for developing strategic plans for
Volkswagen
There are two techniques that can be used by Volkswagen which are:
Growth sharing matrix: This matrix has been created in order to assist
firm in long term strategical planning which will aid business in analysing
growth opportunities. These opportunities can be examined by
overviewing the products' portfolio and determining the field for
investment,etc.
It considers that firm’s business unit can be classified into 4 categories
which is based on combination growth of market share and market. (Sia
and Weill 2016.)
On the basic of this matrix various situation faced by company can be
analysed.
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1. Stars: This star symbol in BCG matrix shows high market share and
full growth. The company is placed in star situation when it is generating
large amount of cash due to their larger market share and high growth
they have to bear large amount of cash. In this case the company make
efforts to maintain its larger share in market then it can place itself in
the position of cash cow and can generate cash revenue.
2.Question marks-in this situation the firm consumes large amount of
cash and captures growth rapidly but the firm in this case is unable to
generate high revenues due to their low market share. This position
provides opportunity to company to transform themselves and take
place themselves in star position and further firm can convert their
situation in position of cash cow.
4
Illustration 1: BCG Matrix
Source:
(http://http://www.smartinsights.com/
marketing-planning/marketing-
models/use-bcg-matrix/ )

3.Cash cows-In this situation the organisations, by investing little
amount of cash, generate large amount of profit. This enables firm to
fulfilled their requirement of cash and change their positions from
question mark to leaders on market and to recover the firms
administrative cost, to increase profits to be paid as dividend to their
shareholders etc. This situation allows the company to maintain its cash
flows.
4.Dogs-In this situation firm has low market share and low market
growth. This is a situation where company neither earn revenue During
this period company should decide to shut down their business and
should decide to start new business.
The advantages of BCG matrix for company are:
1. It helps the company in selecting investment criteria.
2. BCG matrix assist company in analysing the need to focus on new
business.
The disadvantages of BCG matrix for the company are:
1.It eliminates synergies effect among various units of business.
2.Market growth is not only the element that states market
attractiveness.
3.The company can earn revenue even more than cash cows.
4.Sometimes firm can earn higher profits with low share of market.
Profit impact of market strategy
It is performance improvement technique which helps the firm in
increasing profit margins and will assist firm in becoming market leader.
This strategy will assist Volkswagen in improving its market share and
enhancing profitability by considering following factors such as
organisation environment, activities related to operation, strategic
development etc.
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Task-2 Formulating strategy
2.1 Organisation audit for Volkswagen (VW)
SWOT analysis technique can be used for conducting organizational
audit for Volkswagen (VW).
Strengths of Volkswagen
1. The Volkswagen is leading
company in auto mobile
industries.
2. Joint venture strategy has
helped the company in
expanding its business.
3. Exploring new market and
developing innovative
product.
4. Bringing new concepts and
strategy in auto mobile
industry.
Weaknesses
1. Improper marketing
strategy.
2. Lack of competency in
introducing battery
operated vehicle.
3. The company was unable
to expand its market
share in UK.
4. The firm has little
expertise in auto mobile
industry.
Opportunities
1. As the inflation in prices of
fuels, taking advantage of
this company can charge
high price for their products
and services and can earn
profits.
Threats
1.Growing competition.
2.Laws and regulations related to
vehicles
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2. There in demand of battery
operated vehicle, the
organization has opportunity
to launch such vehicles.
By analyzing the strength and external opportunities it has been
concluded that the company has potential to grow and has competitive
advantage but for further growth company need to focus on enhancing
sustainability and should take efforts to increase effectiveness.
2.2 Conducting environmental audit for Volkswagen
PESTLE analysis technique is being used for conducting environmental
audit for company Political Factors
Volkswagens is serving their product and services in foreign market,
various factors may have influence on the company's working. Such
various elements are government policies and regulation, taxes,
legislation etc. In order to eliminate or reduce the effect of these factors
firm should develop more innovative product in order to gain competitive
advantage. The firm should develop the vehicles keeping in
consideration various political and legal factors.
Economic factors
As company is operating in various countries and people belonging to
various places have different choices, demand, difference in income,
people belonging to different culture and have various beliefs, these
factors may have influence on business operation. Operating in different
country includes high risk and these risks are associated with these
elements. The two elements that have contributed to success of
Volkswagen are diversification and globalisation.
Social factors:
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The social elements include behaviour of consumer, population etc.
Social changes have direct effect on the revenue, growth and profit
capacity of firm. To meet such social changes, to focus on operational
activities and to enhance its performance the firm has adopted various
policies and strategies.
Technological factors:
The product produce by two companies may be same but difference
may lie in the technology used by the company in manufacturing
product. The technology plays vital role in innovating and improving
quality and features of products.
In order to gain share in market the company has to focus on use of
advance technology in order to achieve efficiency in its operational
activities. The company by making effective use of technology can gain
the position of market leader.
Legal factors:
various factors include government policies and laws have direct
influence on the working performance of the Volkswagen.
Environmental factors:
various environmental factors include climate, availability of resources,
environmental laws etc. have direct impact on the firm. These elements
may result in additional cost to firm. In order to eliminate effect of these
factors the Volkswagen company has decided to focus on its
responsibilities towards society. The company is adopting various ways
to satisfy the need of stakeholder and society, the firm is contributing to
reduce the waste produced produced during manufacturing process, and
recycling waste in order to prevent environmental pollution.(Yaoand
Minner 2017)
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2.3 Importance of stakeholder analysis in framing strategy.
Stakeholders are the person who have direct interest in or those are
directly involved in the various activities carried out by firm. Employees,
shareholder, directors, suppliers etc. these all are the stakeholders.
Stake holder analysis is a technique in order to recognise people those
who are associated with activities carried out by organisations in one or
the other way.
Importance of stakeholder analysis
The stake holder analysis is also essential as it helps in examining and
reviewing the impact of various stakeholders on business and also aids
in judging their importance in various activities. It assists in
understanding the view and peoples reaction about firm. (Madsen,
2016).
There are 4 stages involved in shareholder analysis:
Stage 1 – Identifying the important stakeholders.
The key stakeholders can be identified by considering various factors
such as examining the potential beneficial stakeholders that might have
adverse effect on the company growth, whose support may lead to
company success etc.
Stage 2-Analysing the interest of stakeholders and its impact on
project performance by firm.
This can be achieved by answering various questions such as in which
Project the stakeholder is interested , benefits that stakeholders is
expecting to get from completing the project, the resource the
stakeholder is willing to use in the project.
Once the group of stakeholders is being identified it becomes easy to
examine their interest. But examining the stakeholder interest is another
difficult task to perform for that the Volkswagen company should create
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a stakeholder grid.
The high power will lead to generation of high level of interest of
stakeholder and they will ensure greater efforts to contribute towards
growth of organisation by promoting products and increasing their work
efficiency.
High power and low interest - has direct influence on the strategy. This
situation occurs when the stakeholders are being assigned with same
project repeatedly.
Low power and high interest – These stakeholders who have low power
and have high interest are very important for the company as these
stakeholders may contribute to the success of form and can positively
influence the strategy.
Low power and low interest-These stakeholders have neither contributed
to the success nor they have contribution in company’s activities and
they do not affect organisation in any ways. The company should not
make any efforts to monitor them.
Stage 3. Evaluate significance and impact
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Impact refers to the influence of shareholder power on project. It
can be acknowledged by analysing the project implementation by
shareholder and controlling decision making process. Significance refers
to the extent of contribution given by shareholders in fulfilling the
objective of project and its contribution towards implementation of
project.
On the basis of these two factors the shareholders can be ranked
on scales and their importance can be compared. For analysing their
involvement, it is necessary to frame strategy. Direct consultation from
people who have knowledge and are associated with concern of
stakeholders would be necessary for examining the importance and
influence of stakeholder on project.
Stage 4. Plan participation strategy for stakeholders
On the basis of above three steps some exploitative plans can be
developed to increase the involvement of stakeholder groups in different
stages of project.
Stage 5. Developing understanding level
This is final stage where it is required to develop good understanding
with the stakeholder that has very important role to play not in project
but also in organisation.
2.4 Developing new strategy for Volkswagen
The new strategy of Volkswagen should aims at thrilling customer by
introducing battery operated vehicles and providing them with
innovative mobility solutions. Organisation should focus on enhancing its
image, that can be achieved by planning for fulfilling the corporate social
responsibility. Strategy will help firm in satisfying their customer by
developing new products and help them to generate revenue, will help
firm in its growth. The strategy will aid firm in gaining various support
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such resources and financial assessment from society which will help
firm in its smooth working and increasing in its life span.
3. Strategic evaluation approaches
3.1 Ascertaining the suitability of alternative strategies in relation to
growth or retrenchment for Volkswagen.
Strategies related to Market -
Substantial Growth
Adopting substantive growth strategy is an excellent decision
taken by Volkswagen company as this decision will help the firm in its
overall growth. For instance, the Volkswagen company can invest into
the latest technology for developing vehicles that has high tech features.
Techniques such as diversification and integration can be used by
company in order to enhance the scope of substantive growth.
The substantive growth strategy can be used by Volkswagen as the
company has power to capture market.
RESTRICTED growth
Limited growth refers to the situation in which company requires
holding of its growth plans and has to focus on main issues. It can use
various techniques for limited growth.
1. Product development: Volkswagen can manufacturer new
designs of cars, and can introduce new features in its existing
product and can enter into market. Company can introduce its
innovative product into existing market and can search new
market for its existing product.
Penetrating market: The company can use advertising and discount
method to attract the customers in market and to increase their market
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share. The company can use attractive packaging material and should
introduce innovative service in order to capture large market share.
Entering new market- the company can introduce its existing product
into new market.
As Volkswagen has wide market share it is not advisable for company to
adopt the limited growth strategy.
Retrenchment
Retrenchment is an alternative action. This remedial action is followed
by firm in situation when its has been analysed that inefficiency in firm
operations, when business is unable to face tough competition, when
organisation is facing financial issues.
Disinvestment strategy- refers to case where enterprise fails to handle
and continue its business, instead of closing its business handover its
business to another company.
Time reversal- This strategy is used by the company that could not
perform well due to influence of some factors on its activities and
profitability. This plan is used for transforming underperforming firm into
profitable organisation. This generation of idea assist enterprise in
resolving various financial issues and in improving its financial condition.
Liquidation- This strategy is used by those firm analyse that they are at
the stage of closure. This situation occurs when the firm fails to pay its
debts and unable to recover its bad debts then this strategy is used by
the promoter of the organisation and all its valuable assets are being
sold in order to make payment to its creditors.
3.2 Justifying the strategy selection
The objective of Volkswagen company is to create image of economic
as well as ecological leader in auto-mobile industry. various plans such
as functional, operational and brand strategies can be used by company.
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These strategies will form in expanding its business operations and
improving its functional activities and the plan for social contribution will
help the organisation in increasing its customer. The company by
entering into joint venture with other company can expand its business.
The market entry strategy will help organisation in exploring new market
and introducing its new as well as existing product in new market and
this will lead to generation of profitability, will contribute ultimately to
growth of firm. The Volkswagen company has adopted the strategy of
product development in order to differentiate its product from its
competitors.
4. Analysing the way of implementing strategy
4.1 Assessment of roles and responsibilities of personnel in
implementing strategy
There are three main roles of strategic implementation, such as orienting
the firm to deliver that strategy, embodying change and predicting
future plans
The initial role is imagining the future strategy. This role involves the
flow of communication of strategy between internal and outsider party.
The internal party includes all people working within organisation
whereas external party includes people who have direct interest in
activities carried out by firm such as stakeholders. The second role is
orienting the enterprise to delivers strategy. This role involve
expectation by individual to remain committed to strategy and individual
contribution is expected in the implementation of strategy. This role also
involve the motivation activity in order to motivate people to follow that
strategy and make their contribution in empowering to deliver change.
Last but not the least role is embodying change.
The Two parties are mainly responsible for implementation of strategy.
Those two parties are middle level managers and stakeholders. Middle
level managers are being held responsible for implementing strategic
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plans for top level management. The responsibility of top level
management involves framing suitable and sensible strategy, reviewing
of strategical process, making alteration, adjustment in strategies
according to responses and assisting senior management in
implementation of strategy. As a stakeholder and as a consultant they
are very much responsible fir implementation of strategy.
4.2 Evaluating the resource requirement in implementation of strategy
The resources play vital role in implementation of strategy there
are mainly three types of resource are Physical resource, human
resource, time and start up cost resource. The nature of resources and
environment in organisation determines the need of resources(Hughes,
and Akhir 20160
The Physical resources are associated with other resources such as
resource required in production process, financial and market resource
that are resources that are required in implementing strategy. As the
strategy of Volkswagen company focuses in improving the quality of
their product and services so they should allocate technological
resources in order to improve quality of their product.
Human resource also play vital role in implementing strategy. The
various development and training activities can be carried out by the
firm in order to develop human resource. ( Schönsleben, 2016)
Financial resources explain how Volkswagen company finance their
resource in order to make effective implementation of strategy. The
ways can be adopted by company in order to finance their resource,
these two ways are equity and debt. Equity is more preferred by
company for financing as it does not contain any kind of interest or extra
charge.
Material resource refers to the material required for
implementation of strategy. Volkswagen company should adopt high
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qualified technology in order to fulfil their need of resources by product
development strategy.( Azhar and Lin 2017)
4.3 Calculating the contribution of SMART target to strategy
achievement and implementation in Volkswagen
Smart target refers to the smart, measurable, specific goals and
clarified objective, realistic targets set by Volkswagen and that are to be
achieved. Setting of smart goals is very important as they direct have
effect on the success of firm. Measuring the effectiveness of strategy is
equally important as these strategies assist in achieving their goals and
objectives.
The three main techniques such as suitability, feasibility and
acceptability can be used to calculate or to evaluate the contribution of
smart target to achieve results through strategy and implementation.
Suitability means analysing the appropriateness of strategies in
particular issue or suits in particular situation, the Strategy
implementation helps in addressing the key issue etc.
Suitability can be measured using SWOT analysis. Suitable
strategy always points the capabilities of organisation and helps the firm
is reducing threats, grabbing opportunities and assists the firm in gaining
competitive advantage.
Acceptability refers to success of strategy in fulfilling and meeting
the various expectation by outsiders. What if analysis method can be
used in identifying the acceptability of strategy.
Feasibility refers to the availability of resources in order to
formulate and implement strategy. Break even analysis method and
feasibility analysis can be used in examining the feasibility of strategy.
(Leonidou, and Palihawadana, 2017)
AS Volkswagen company aims at adopting interactive strategy and
product development strategy. Revisitation of strategy can be done
using this technique. Adoption of this technique will enable the firm in
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quickly identifying and utilising the key opportunities. Acceptability
techniques can be used by company for analysing that whether strategy
has met expectations of stakeholder or not, this can be examined by
SWOT analysis. Acceptability techniques also helps the company in
identifying various risk and. Feasibility techniques assist in allocating
resources, examining the shortage, arranging the required resources and
direct the sources for availing resource's. The feasibility method can also
be used by company for reviewing target to be achieved by
implementing particular strategy. It can be used to calculate the ratio of
various resources required in implementation of strategy. For example, it
can be used to measure the ratio of financial resources required to
implement strategy. (Johnson, 2017)
CONCLUSION
The first part Task 1 of the study has clearly defined the vision,
mission and objectives of Hungry House company in UK. In first part of
the project has suggested some of the strategies that could help the firm
in gaining competitive advantage. The purpose of project has been
fulfilled by explaining the concept of strategy and by explaining various
process involved in strategic planning to strategic implementation. The
study has also defined various factors that may affect the formulation
and implementation of strategy.
The report has aimed at providing various techniques which could
be used by the company in planning process and has provided the
methods to examine the effectiveness of these techniques.
The second part of the report has aimed at explaining the key
element required in making strategic planning, how to select strategy
and strategic implementation process. In implementation part, has been
concluded that among both external and internal environment, the
implementation of strategy is influenced by external environment.
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various strategies have been planned for Volkswagen company
which will help the company is its growth and success. The study has
suggested various methods in order to analyse the resource's
requirement on implementing the strategy. The various role and
responsibility of both manager of company and stakeholder has been
described and It has been concluded that manger plays vital role in
implementation of strategy and outsider has the greater responsibility in
implementation of plans Various tools have been suggested in report in
order to examine the appropriateness of strategy.
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