Business Strategy and Information Systems

This assignment delves into the crucial connection between business strategy and information systems (IS). It analyzes how aligning IS with business objectives influences an organization's overall success. The provided readings delve into concepts like matching CIO characteristics to business strategies, leveraging IS for sustainability, and understanding the impact of business strategy on project portfolio management. The assignment encourages a critical examination of these theories and their practical applications in today's business environment.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
LO1 – 1.1 1.2 & 1.3 covered in PPT...........................................................................................1
TASK 2............................................................................................................................................1
LO2 ............................................................................................................................................1
2.1 Organisational audit..............................................................................................................1
2.2 Environment audit.................................................................................................................3
2.3 Significance of stakeholder analysis while formulating new strategy..................................4
2.4 A new strategy for VW AG.................................................................................................5
LO3.............................................................................................................................................5
3.1 Appropriateness of alternative strategies relating to market entry........................................5
3.2 Justification for selection of strategy....................................................................................6
LO4.............................................................................................................................................7
4.1 Roles & responsibilities of personnel in strategy implementation........................................7
4.2 Resource requirements for implementing the new strategy for VW AG..............................8
4.3 Contribution of SMART targets in business strategy...........................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
“Without strategy, execution is aimless. Without execution, strategy is aimless. - Morris
Chang.” Hence, development of strategy as well as execution plan is very necessary for a
business in order to build a strategy which could lead to success of a business. An organisation
which is doing any kind of business aims to earn maximum profit which is supported by a
strategy. A strategy is a tactic to provide a guideline with specification of goals, mission, vision
of an organisation so that all the other people can move in that direction so as to achieve them. It
is being justified in this report how important a business strategy is for a firm. This document
also consist of illustration about tools and techniques by analysing which a company like
Volkswagen develops its strategy. SWOT of the company as well as how it can make effective
use of SMART targets have been specified in this study. Implementation of a strategy in a
organisation requires assessment of various elements which have been specified in this
justification.
TASK 1
LO1 – 1.1 1.2 & 1.3 covered in PPT
TASK 2
LO2
2.1 Organisational audit
Organisational audit consist of analysation of plan which have been implemented in the
organisation so as to find out the requirement of changes in various parts. VW AG is one of the
leading auto mobile industry which have various diversifications which specifies that it have a
strategic plan through which these have been managed. SWOT analysis is the best way to carry
out any kind of internal audit for an organisation which is working on a large scale. The
analysation have been specified below:
 Strengths
VW AG is a leading company which deals in auto mobiles and their parts. Hence, its
brand name is a strength for the company through which the people are buying products. The
company is providing best quality in the parts of the transportation it is dealing in which is also a
strong point.
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 Weaknesses
The price of the cars are set really high as well as most of them are petroleum which
implies a lot of pollution generation which is causing a harm to UK. Hence, company needs to
look after this so as to retain in market.
 Opportunities
There are many opportunities for the company as the technology is developing day by
day which states that it can upgrade the functions of cars by using it. It can also develop a car
which is very less pollution generator as well as which is cost efficient as well by grabbing the
opportunities available for doing so.
 Threats
The major threat is from substitutes which implies that the company have to make more
stronger competitive strategy so that there can be a lead over market which will help it in
growing.
Ansoff matrix can be also used to do organisational audit of VW AG which will help in
assessment of the policies which have been established in its premises. It helps in developing a
result for growth of company as well its market share in coming time by analysing the scope of
the business. Various elements which are there in this matrix are:
 Market Penetration
This factor helps in identifying the sustainability of business in market which helps in
making the strategies for same according to the situation.
 Product development
Development of a product has to be according to need and demand of the market and
potential buyers which is also assessed in this element.
 Market Development
Development of business in a market by expanding it in various other regions as well as various
other locations which are accessible by the organisation.
 Diversification
The business of VW AG is diversified which specifies that the company is dealing in
various products which hints that it is not majorly relied on a single function.
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2.2 Environment audit
Environmental audit specifies the audit which a company does to assess the external
environment where there are some elements which can affect the business directly or indirectly.
While carrying out this analysis for VW following are the elements which have to be considered:
 Political
Factors related to political conditions of a country are considered in this which are
government of the country, policies of a country, various other legal bodies which are
responsible to regulate norms which can affect operations of a company in a country etc.
 Economical
A country's GDP demonstrates how rapidly it is growing which also specifies the
business conditions in the same. So before opting a business establishment in such a country
economical factors like- inflation, GDP etc. have to be considered.
 Social
Culture and society in which the company is operating also affects its activities which
implies that a business needs to have complete analysis of the social factors of a company before
making any strategy.
 Technological
Increase in globalisation policies of world have initiated a rapid and constant change in
technological factors according to which companies have to upgrade their infrastructure.
 Environmental
Surroundings of a company where it is functioning impacts the business directly or
indirectly which specifies a consideration of it while developing a strategy.
 Legal
Rules and regulations which are legally formed by the government have also a major
impact on company's operations. These factors also needs to be evaluated while making any
strategy for a business.
Porter's five force model is another way to have an environmental audit for VW AG so as
to have best strategy for it and that is briefed below:
 Threat of substitute
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The substitutes which are available in market have to be analysed which justifies the
problem that may be caused by the. These companies have power to attract the customers of VW
AG as they have the same product in which it is dealing. Hence, they have to be evaluated.
 Threat from new entrant
In the business of auto mobiles there are many companies which are coming with new
ideas as well as new business which might acquire the share of market of VW AG that is an
external threat to it.
 Threat of rivalry
Presence of competition in market also is a threat to company which have to be addressed
properly in order to overcome it.
 Bargaining power of buyer
The potential buyers have a power to bargain the price if they are larger in number so a
company have to make product according to them as well as the price has to be set by
considering the majority.
 Bargaining power of supplier
The supplier of raw material which might be parts for VW AG cars which are acquired
from various suppliers that impacts the cost of expenses in a entity.
2.3 Significance of stakeholder analysis while formulating new strategy
VW AG is a company which is spread on a large geographical area which specifies that
company has reached to this position with contribution of various people who jointly work for it.
These people are internal stakeholders which are- employees, managers, owner etc. The people
who supports the business externally and is interested in its operations are external stakeholders
which are- government, investors, customers etc. Justification of them specifies the significance
to analyse them while formulating a new strategy for VW AG.
Stakeholders are the employees, local community, government, NGO etc. which are the
key people of an organisation which states their involvement while making any decisions. Their
opinion is must while making any kind of strategy which will lead to change in any kind of
procedure in organisation. For instance- investor will invest in business so they are to be
informed about their money that where it is deployed, likewise the customers expects the product
to be according to their needs which have to be taken into account by the company, employees
are the people who will work on the strategy so they are to be informed about the changes which
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might be brought through the strategy so that there can be properly directed operations etc. This
specifies the importance of stakeholders analysis while formulating a strategy for the
organisation.
Impact of stakeholders on company's performance:
Shareholders: They are the one who influences company's decision which help manager
and leader of company to make logical and effective decision.
Local community: It is important to formulate effective decision regarding fulfilling
needs and demands of the customers and local community which help company in achieving
profitability. Understanding the needs and requirements of community enable company to attain
brand image and reputation of company.
Government: The policies and standards implemented by government also influence the
company's performance. For example: Imposed hight rate of taxation of company's products will
make adverse affect on company's profitability and growth.
NGO: They ate the one the company should focus on in order to meet their needs and
demands. For example giving donation for charitable purpose help company in getting brand and
good image of company.
2.4 A new strategy for VW AG
UK is a country which is facing pollution problems for which country is taking various
measures in order to control the threat which might be caused to the nation due to this. Pollution
is water, air as well as noise in UK majorly air pollution vis auto mobile have been rapidly
growing which is impacting the business of transport industry. These companies are not allowed
to manufacture cars which produce pollution in the environment. A research have found that
major pollution cause is cars which run by diesel hence, these cars were most popular in nation
which were to be manufactured less. VW AG deals with these cars and this policy of government
has made to have a plan which could alter this effect.
Hence, the company can implement the manufacturing of cars which works
electronically. This strategy of electronic cars manufacturing would be best for the organisation
so as to sustain in market for a longer period of time. Electronic cars are robots or computers
which runs on wheels and are really smart cars other than normal cars. They will be best for the
environment of UK and accordingly will support VW to have a solution for change in
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manufacturing. By this country is leading towards sustainable development in which VW can
contribute by implementing this strategy.
New strategies should be adopted by Volkswagen:
In order to attract large number of customers the company need to formulate an effective strategy
such as:
Innovation: Implementing innovative changes in feature and technology of their
vehicles will maximise the level of satisfaction of customers as well also attracting large number
of customers to purchase their product. Improving the characteristics of product will help
company in attaining brand image and competitive advantage in competitive market world.
Cost leadership: Th company need to focus on reducing cost incurred in manufacturing
vehicle product by using advanced and efficient technology which help them in providing their
vehicle product to customers at an affordable price. This will help company in gaining
competitive advantage. For this company should encourage its employees through conducting
training programs which provides knowledge to employees about how to utilise available
resources at an optimum manner that will bring positive outcome in future.
LO3
3.1 Appropriateness of alternative strategies relating to market entry
Before implementing any kind of strategy to approach a market there is a need to analyse
them so that best among them suitable for the company can be chosen. There are many strategies
available for the same to enter in to a target market. A justification to them is given below:
 Substantive growth
According to this strategy a form aims a market and makes an entry horizontally or
vertically. In other words either a firm merges or acquires another firm or directly it opens a new
venture in the targeted market. It is good for a firm while it develops a strategy to or wants to
expands its business in various other sites which have been recognised by it. VW AG wants to
make a strategy for manufacturing electronic cars for the country UK. Hence, it can have
substantive growth if it targets a new market.
 Limited growth
This includes considerations of various factors which are market penetration, product
development, innovation etc. They specifies the best techniques for a market entry in a market
which is new for a firm. VW Ag needs to innovate its cars by implementation of electronic
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system in them which specifies that company is diversifying in its product but its not developing
a new business or a whole new venture which implies reduction in cost for establishment of a
new venture.
 Retrenchment
Cost reduction by removal of unnecessary firms or operations which are not generating
any profit to the company. In other words units which are not generating any kind of profit to the
business of an organisation should be withdrawal this reduces the cost which can be deployed at
some other strategy for generation of profit. VW AG can shut down its firms or products which
are not generating any kind of profits to the firm.
3.2 Justification for selection of strategy
According to the situation which is faced by VW AG in United Kingdom the strategy to
develop electronic cars would be best for the company in order to sustain in the market.
Otherwise the company will face problems related to loss or closure as the government of UK is
taking very strict actions regarding this. The company do not have any choice in order to follow
the pollution norms of the country it have to develop cars which create less pollution as its
business is wholly dependent on that. Various other kind of social responsibility by this will be
fulfilled which will improvise the image of the company in country UK.
This strategy is the best solution for VW ag to develop electronic car according to the
demand of the environment which have been there in UK. The company can also follow the
norms of government as well as it would be completing the legal norms which have been created
by the legal body of the nation. This way company would not face any kind of loss or any kind
of problem in environment of UK and it will sustain for a linger period of time there by
competing various kind of situation which might have a long term affect on its operation in
United Kingdom.
LO4
4.1 Roles & responsibilities of personnel in strategy implementation
The new strategy for development of electronic care or we can say bringing the soft
wares on wheels will require various people who will help in implementation of it very properly
that leads to success. Several people are required who can have a check on the plan so that it
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works properly and can have an impact to retain in market by earning profit. A justification for
the role of people associated with the project have been given below:
 Engineers
They are the qualified people with a proper knowledge in the field of car and equipment
development and will support the strategy of company by making a proper structure for the car
with all the feature so as to conserve the environment. They will play the major role in
implementation of the strategy.
 Manager
The manager of the unit of manufacturing will play a role of planning, organising,
staffing, directing and controlling so as to have a proper and procedural implementation of
strategy. This will help in achievement of goals effectively and efficiently.
 Expatriates
Sometimes the company have to expand its business in a country which is very different
in culture and all other aspects which requires a person who can properly overcome such
situation at those locations. So this role is played by the expatriates who have been chosen by the
company to deal at those places with the customers.
 Employees
The people who will directly contribute to the operations of a company. They will bring
action to the plan by manufacturing cars which are compatible with the strategy which have been
developed by the management of the company.
 Mechanics
A car manufacturing company like- VW AG will definitely require some people who can
look after the wear and tear of procedure. So this role is played by the mechanics in a company
who are also contributing to implementation of the strategy.
4.2 Resource requirements for implementing the new strategy for VW AG
Every plan requires some raw material or resources for execution which implies that VW
AG will also need to have some resources which can be used to implement the strategy of
formation of electronic cars. These are the mandatory requirements of the company and they are
listed below:
 Financial resources
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Funds are the major requirement of any kind of a project as it is required at every point of
a project whether it is concerned with buying or selling of any type of offering. Hence, these are
to be acquired by the firm to bring the strategy of company into action. Various stakeholders are
there in market who are ready to invest in strategy of companies can be approached for this or
any assistance from various institutes or banks can also be acquired as well as company can use
its retained earnings for the same.
 Equipments
Manufacturing of a car requires usage of various kind of tools which specifies that there
must be equipments which are necessary to make its parts as well as assemble them. Hence,
these resources are also need to be acquired by the company.
 People
Human capital is the first and foremost resource that is required for implementation of a
strategy. They are to be acquired by recruitment and selection of people from internal and
external sources. The company will initiate its strategy by the help of people who will activate it
by performing it in its premises.
 Parts of car
Sometimes a company manufactures the parts of the cars sometimes it buys the parts
from manufacturers as it costs less with a good quality. Hence, for this kind of technique the
organisation have to acquire the parts of the car which are required.
 Fixed resources
A plant and a machinery to have a proper development of cars will require fixed
resources. These are to be taken by VW AG so as to provide a place for the people to work on its
strategy which it have implemented.
4.3 Contribution of SMART targets in business strategy
Formation of a strategy is a very complex process which requires to assess the various
elements which are there in the surroundings of a company. Hence, the formation of targets in a
strategy is done with the assistance of SMART which helps in formation of proper justified and
relevant targets to achieve. Their contribution in VW AG is that these targets are very specific,
measurable, Acceptable, Relevant and time oriented. Hence these targets works in a systematic
way which will help the company to achieve the goals effectively. SMART targets are illustrated
below:
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 Specific
This states that the target which are set by the organisation must be specific or very much
clearly defined that what it is working for and what all the other people have to work for so that
there can be a direction in unity.
 Measurable
The target which have been set must be measurable in terms of numerical order this will
help in knowing that what will be achievement of the target.
 Acceptable
There must be those objectives which are acceptable to the employees in terms of
achievement or we can say which are achievable. This will lead to reduction in wastage of time
which have been devoted to the targets and there would be less chances of vague informations.
 Relevant
According to this, strategy must be relevant to the operations of the company which
means that if VW AG is operating in auto mobiles than it must also have to develop next new
plan according to that only which minimise the chances of confusion.
 Time
Targets or strategies which have been made must be time inclined in other words they
must be achievable in a time period which is specified. This will help in utilisation of time in
best way.
SMART target: It is essentially required for Volkswagen to set SMART goals in order to achieve
pre-determined goals in an effective and efficient manner. The goals of company should be
clearly defined members of an organisation through which they can put their maximum efforts in
achieving desired target. The goals must be measured and realistic in nature which should be
achieved within pre-determined period of time in order to gain competitive advantages as well as
huge profit.
CONCLUSION
Strategic decisions for a company have to be taken after various elements analysis so
these have been concluded in this report including organisational audit and environmental audit.
There are several tools and techniques which are used to evaluate the effectiveness of a strategy
which have been justified in this above study with relevance to VW AG. A new business strategy
for Volkswagen have been given in this document which it can implement in environment for
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UK while operating in it. Market entry strategies for development of business have also been
given in this study so as to assist VW to adopt best suitable technique for its strategy. SMART
targets have been also included in this written document which can be used by the company to
have best action of developed plans.
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