TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 TASK 1............................................................................................................................................1 1.1 Business vision, mission, goals and objectives to inform strategic planning...................1 1.2 Important factors recognised in order to formulate strategic business plan.....................2 1.3 Effectiveness of techniques in development of strategic business plan...........................4 TASK 2............................................................................................................................................5 2.1 Strategic positioning and organizational audit of Volkswagen........................................5 2.2 Environmental audit for Volkswagen...............................................................................7 2.3 importance of stakeholder analysis in formulation of strategic business plan.................9 2.4 New strategy for the organization..................................................................................10 TASK 3..........................................................................................................................................10 3.1 Effectiveness of alternative strategies relating to market entry......................................10 3.2 Justification for selection of appropriate business strategy............................................11 TASK 4..........................................................................................................................................11 4.1 Roles and responsibilities of personnel charged for strategy implementation..............11 4.2 Estimation of sources required to meet the strategy.......................................................12 4.3 Evaluation of SMART targets for the achievement of strategy implementation...........12 CONCLUSION..............................................................................................................................13 REFERENCES..............................................................................................................................14
INTRODUCTION System of every business enterprise aims at expansion of business operations in order to maximise the sales and profits by satisfying the needs of customers. Business strategy is considered as important plans and policies that helps in regulation of business and operations in market that supports in sustaining its current market position as compared to the competitors. These strategies work as tonic for organisation as its helps in formulation, implementation, calculating, and designing business activities according to the environment factors (Scholes, 2015). This report will analyse the business strategies which are designed and implemented in order to get the financial supports from the Dragon den group companies.Various business mission, vision, objectives, goals and core competencies of new business concept have been discussed. Further, case study of Volkswagen is taken into consideration in order to analyse the company’s policies and procedures. Various consequences have been analysed which are faced by organisation in its past business operations due implementation of wrong actions. In addition, various important models have been used to analyse internal and external environment situation of Volkswagen. Moreover, several important and SMART standards of company have also been discussed which provides the direction to organisation in application of successful business strategies. TASK 1 1.1 Business vision, mission, goals and objectives to inform strategic planning Business strategy is long termed action plan that is designed to accomplish a particular goal or set goals or objectives (Teece, 2010). Strategy is considered as the management's game plan that is used for strengthening the performance of enterprise. In present context, there are some important elements of business that have been discussed in order to pitch for finance in front of Dragon den group. Mission: This statement of organisation determines the things and action plans which they will apply in order to achieve the vision in near future. The mission statement of the company is to provide the top quality of products at the lowest possible prices and gaining satisfaction of customers in international market.
Vision: This statement of company will describe the reason behind its existence in market. Further, the new business regulates with the vision: “To be most successful and widely recognised brand in auto mobile sector by providing unique design and fuel- efficient cars to customers in order to achieve their satisfaction”. It will help the enterprise to develop effective strategic business plans to achieve success in business operations. Goalsandobjectives: Goals are considered as the purpose towards which the project of company has been directed and objectives are efforts or action of enterprise intended to attain accomplish ; purpose and target. New business objectives are as follows: ◦Maximising profits at increasing rate. ◦Gaining rise in sale up to 10% in every 6 months (Astrachan, 2010). ◦Hiring qualified employees at workplace. ◦Expansion of business in Asian countries. ◦Increasing the market share up to 5 % in auto mobile industry in every quarter. ◦Increasing the brand recognition among the customers in European market. Corecompetencies: These are abilities of company to develop and implement business strategies that provide positive results. If the organisation has competencies, then it will be able to survive in the present competitive market. It can be measured in monetary and non-monetary terms. In present context, innovation and unique design of cars is major competency of our business which provides support in accomplishment of these goals and objectives. Thus, these major components will help in influencing the Dragon den group companies and attaining resources to establish new business in auto-mobile industry. 1.2 Important factors recognised in order to formulate strategic business plan. Strategic planning is process of organization in order to define its strategy or ways and making effective decisions on allocation of its resources to implement the strategy. It may also helps the organization to extend the control mechanisms for guiding the strategic application of business plan (Woodcock, Green and Starkey, 2011). Further,For development of effective business strategy, the organisation needs to make an effective research and should analyse the factors that provide influence, in order to take successful business decisions. In present context, 2
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Ansoff's matrix have been used to determine the factors that affects the company’s business strategy in auto mobile sector and its potential customers base. Ansoff's Matrix These are also considered as alternative corporate growth strategies that concentrates on firm's present potential products and new products as well as customers in market. This matrix has provided four different strategies of growth which are as follows:Market penetration: It is the strategy in which the organisation seeks to achieve the growth with its existing products in present market and should try to sustain its position in competitive business environment (Campbell, Edgar, and Stonehouse, 2011). It is considered as least risky strategy since it leverages many of company’s existing resources and competencies. Market development: In this, strategy of market development is effective for enterprise in which they will target their existing products and services in new market segments. Auto- mobile company will also concentrate on this strategy and expands its business in other Asian countries’ market. Existing ProductsNew Products Existing MarketsMarket PenetrationProduct Development New MarketsMarket DevelopmentDiversification Product development: In this, company will develop its new and unique designed cars by targeting its existing market segments in European countries. Competencies of company like innovation and technology will support them in implementation of this strategy. 3
Diversification: It is also a strategy in which the firms tend to grow by diversifying in new businesses through development of new products for new markets (Cinquini and Tenucci, 2010). For establishment of business in Asian countries, company needs to target a specific market segment and should analyse their preference towards purchasing the cars. Thus, it can be said that these are important and have to be analysed by organisation in order to implement the successful business strategy. 1.3 Effectiveness of techniques in development of strategic business plan. Business planning is considered as necessary for organization in achievement of growth and success in business operations as they are getting various financial resources in order to formulateeffectivebusinessplans.Strategicbusinessplansprovideimportanttoolsto organization for tracking the growth, establish a budget, preparation for unforeseen changes in market (Pagani, 2013). A strategic business plan includes many elements which the organization can use to attract the financing and managing companies objectives. It is important to optimize market research and to attain optimum market share for your business. Further, in this report BCG growth matrix have been used to determine the company's effectiveness in formulation of techniques in formulation strategic plans. BCG growth share matrix It mainly displays the various business units of company on graph of market growth rate in comparison to market share relative to rivals in auto – mobile sector. Allocation of resources to the business units of company according to their situation on the grid as follows:Cash cow: A business unit that has a large market share in mature and low growth industry. This is market situation in which the company has high growth but industry has not achieved the much growth (Burlton, 2010). Company in this stage requires fewer investments and generate cash that can be used to invest in other business units. Star: Company in this stage posses high market share in fast growing industry like Auto- mobile industry. In this, the company will be bale to generate cash but due to high marke continuous market growth, it requires making investments in order to sustain its position in market. 4
Question mark: In this stage, enterprise will arrive in this stage when it has low market share in rapidly growing industry (Oltra and Luisa Flor, 2010). Further, company in the situation requires more resources to grow its market share in auto mobile industry, when they achieve success, then they will arrive in star category. Dog: A business that has a small market share in low growth or matured industry is considered in the dog stage. In this stage, if company will arrive then will only have the way to deploy their investments and employ it in other market to achieve profits. Thus, this matrix will provide an understanding attractiveness of industry and companies competencies to achieve success by developing and implementing effective business plans. TASK 2 2.1 Strategic positioning and organizational audit of Volkswagen. As per the above case scenario, there is major requirement for enterprise to analyse its internal business environment to order the competencies and opportunities to analyse the strategic business position of company in UK. Company has faced very important challenges due 5 Illustration1: BCG growth share matrix (Source:The BCG Growth-Share Matrix, 2017)
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to its emission scandal which has wiped its 47% market share and profits (Reinhardt and Stavins, 2010). With the implementation of effective business strategies Volkswagen has achieved continuous growth business operations by taking innovations as tool to achieve success and influencing the customers to purchase its newly designed cars like OD, Bentley Porches, Skoda, SEAT and Volkswagen cars etc. Further, SWOT analysis of company is done to understand its strengths, opportunities, weaknesses and threats etc. Strengths Strongbrandpresentationinauto mobileandrecognitionbetweenthe people in European countries. High market growth Wellmanagedoperationsand functions. Continuous rise in company financial. Widerangeofnewandexcellent design cars (Shirey, 2011). Use of new and latest technology in manufacturing of cars. Huge channel of distribution across the countries. Well established and competencies of making fuel efficient cars. Abilitytoremovetheproblemof emission scandal Weaknesses Low market share in Asian countries as compared to competitors. High amount of prices have charged on cars. Decline in trust of customers on brand. Decline in profit margin. High dependency on European market. Lack of efficient marketing practices. Rise in competition in industry. Only focused on Premium customers. Declineincustomersbaseafter emission scandal. WeakpositioninginAsiancountries like India, china etc. Critical crisis situation due to penalties inEmissionScandalandimpactof political restrictions. Opportunities Expansion in Asian countries through introductionnewlydesignedcarsat effective or competitive prices. Increasingtherecognitionofbrand Threats Major threats of competitors brand as they are also focusing on developing new and innovative designed cars and influencing the customers. 6
among customers through appropriate marketing practices. Development of strategies in order to reduce the competition in market. Product diversification and variation in prices. Focusingonthemediumclass customers along with premium class so that they also change their perception towards the brand. Threatsofdeclineofeconomic conditions. Influenceofgovernmentregulations and policies on business. Impact of emission scandal on sale of products and services. Impact on fluctuation exchange rates and taxation policy. From the above analysis, it can be said that Volkswagen has major strength which they have achieved ion past several years in business and through this they will be able to overcome there weaknesses. Further, emission scandal has provided major impact on company's sales and wiped out its 47% profits and imposed the penalties of$18 billion which is major loss for company. Further, in order to expand its business position, company needs to develop new products and needs to target new customers in other countries. It should also need to reduce its dependency on the European market and also focus on diversified customer base in Asian countries. It also set up its production and manufacturing units in other countries in order to provide cars at lowest rate. After emission scandal company is more focused on following rules and regulation related environmental protection and develops only fuel efficient vehicles. 2.2 Environmental audit for Volkswagen. Thetermenvironmentalauditisconsideredastoolthatisusedtoquantifythe performance and position of Volkswagen in auto mobile industry. There are three main kinds of audit which are environmental compliance audit, environmental management audit to verify ability of organisation to meet its stated objectives and functional environmental audit etc (Wæraas,2015).Inpresentscenario,Environmentmanagementauditisconductedfor Volkswagen in order to analyse its competencies to meet the stated business targets. External analysis of company through recognition of impact of various factors and needs for enterprise to analyse these factors in making strategic business plan. PESTLE analysis will provide complete understanding of the factors which are as follows; 7
Political: As per the case study, political factors have provided major impact on Volkswagen's financial conditions, decreased its profitability and reduced the trust of customer in European countries because the management was also involved in that scandalofinstallingsoftwarethecheattheresultofemissiontest(Wüstemeyer, Madlener and Bunn, 2015). Further, After that company has adopted the right direction and changed its engines from diesel to other fuel efficient. It concentrates on following the rules in order to reduce restrictions of governments of other countries. In UK, present condition for Volkswagen is positive and does not provide any negative impact on company. Social: It includes the factors like perception, values, income level and trust of people towards the brand (Yang, 2017). After the emission scandal, this factor has provided major impact on sales of company as trust of customer was reduced on brand and they are not willing to 47 % of company's profitability. In order to remove the negative impact company has its changed its direction and develop new designed and fuel efficient to gain the trust of customers. Economical: It includes economic growth, taxation policy, income level of consumers and rise in GDP of country etc. Rise in economic growth of UK has provided positive impact on sales and profitability of Volkswagen By increasing the income level of people.Further,taxationpolicyofgovernmentwillprovidenegativeimpacton company's prices of products and increase the prices. Legal: This factor of external environment involves impact of legal policies, rules and regulations that are formulated by government of country to sustain the rights of customer and employees which are working in organization (Zalengera and et.al., 2014). Laws like environmental, employment act and consumer rights etc. Negative impact of these factors have been removed by enterprise by following all rules and regulations. Technological:Continuous technologicalenvironmenthasalsoprovidedapositive impact company's production and increased there capability to design new cars with unique features to influence its target customers. Environmental: This factor includes legislation like pollution, environment consequences and other rules which has provided negative impact on companies operations (Boyer and et.al., 2010). In case study, it is clear that companies sales has wiped out because they 8
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have breached the environmental laws. Further, now they are concentrated on designing fuel efficient vehicles that exerts less carbon emission. Through this, they will be bale to reduce the negative impact of these factors. Thus, it can be said that external factors will provide both positive and negative impact on companies and needs to be recognised for taking effective business decisions. 2.3 importance of stakeholder analysis in formulation of strategic business plan. There are some important stake holders of enterprise which are as follows:Employees: These are considered as important people that are responsible for providing growth to company by putting their efforts to achieve common goals (Johnson, 2017). As per the analysis, it is essential for Volkswagen to provide recognition to its employees to take participation in creating a successful business plan and policy.Shareholders: Person who are directly related with company and provide financial resources by purchasing there equity against the cash in order to achieve the maximum return.Thereismajorimportanceforcompanytoanalyseitsstakeholdersin implementationofstrategicplansastheywillmakeinvestmentsonthebasis effectiveness of strategies and there capabilities to achieve success in business operations.Government: It is major partly whom the Volkswagen needs to consider in formulation of business policies as they it influences the operations if they found something incorrect or against law (Nordqvist and Melin, 2010). Company will provide all information related to business on its websites and declare its financial report in every 10 years, provide report of safety to government authorities of UK.Customers:Further,peoplearealwaysrecognisedbycompanywhileformulating business plans for new product development. It will conduct research to analyse the preference of customers in European and Asian countries and manufacture vehicles to satisfy the requirement of customers. Suppliers: Company needs to consider its suppliers as they are major source of enterprise to gain raw materials at lowest prices and aids in decreasing the price of products and services, helps in maximising the profits. 9
2.4 New strategy for the organization. Implementation of new strategy is every essential for Volkswagen in order to expand its business operations in other countries as they are able influence they are getting major recognition of customers (Reich and Benbasat, 2013). There are some effective policies that organisation are needed to consider which like Market penetration, product development market developmentanddiversification.Fromthesestrategies,themosteffectivestrategyfor organizationisproductandmarketdevelopmentstrategyinwhichtheywillfocuson development of new product or makinginnovation in existing products and influence its target customers in existing market segment in order to maximize more profits and increase its sales turnover as compared to previous financial year. TASK 3 3.1 Effectiveness of alternative strategies relating to market entry. There are various other strategies which are considered as effective for organization and should be considered by them which are as follows: Market entry strategy:It is also considered as an effective strategy for regulating the business in the forma of merger, acquisition, strategic alliance, licensing and franchising etc. Volkswagen can also use these strategies as it requires less amount of capital for investments and risk for company will also get reduced. Substantive growth strategy:Further, this business strategy includes the business operations of enterprise in order to regulate its business operations and strategies in market as compared to competitors (Issa-Salwe and et.al., 2010). It includes strategies like related and unrelated diversification, Horizontal and vertical integration which the company will select to expand its business operations. It will be effective for enterprise if they required to exist new market of other country. Limited growth strategy:These are strategies which are already been discussed and used by management of Volkswagen in order to achieve previous market position and expansion of customer base in present market segments (Pagani, 2013). It includes strategies like market penetration, product development and market development. These most suitable for enterprise in order to launch its new products in existing market and helps in achievement of objectives. 10
3.2 Justification for selection of appropriate business strategy. From the above analysis, it has been justified that the most effective strategy which needs to be applied by Volkswagen is its business operation is limited growth strategy which will provide them support in development of new products and in order to expand business operations (Burlton, 2010). It also helps to overcome new business practices through which they will expandtherebrandrecognitionamongthecustomersinacrossthecustomers.Further, Volkswagen can also join other companies and strategic alliances in India through adopting the strategy. This strategic will help the organisation to expand further strategies that can help to increasetherevenue.Afterenteringintonewmarket,Volkswagencanadoptproduct development strategy to differentiate its products and services from other rivals> TASK 4 4.1 Roles and responsibilities of personnel charged for strategy implementation. For the implementation of strategy, there are is requirements of person that will lead over the other personnel and able to distribute the work between the employees according to there role, performance and position in organization (Shirey, 2011). The employees of Volkswagen who have the power to implement the strategy must have major roles and responsibilities. For the implementation of effective and appropriate business strategy, the roles and responsibilities of other employees needs to be defined clearly by managers. Top management or CEO of company is responsible to interact with other employees and other parties in order to give information about strategy and also posses responsibility to guide in strategic planning. In addition to this. Manager who are charged with strategy implementation have the responsibility to maintain the proper record of customers to inform strategic business planning. It also helps in avoiding the legal implications on organisation (Wæraas, 2015). To maintain the ethical as well as legal standards in strategic implementation is also major duty of manager for strategy implementation. Further, monitoring and making control refers to the periodic review of activities which are performed by enterprise. It also helps in identification that effective steps are taken by employees or not. Thus, it can be said that it helps in encouraging the overall performance of organisation through strategic planning. 11
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4.2 Estimation of sources required to meet the strategy. There are three different types of resources have been identified which are required by organisation for successful implementation of strategy. These important resources are mentioned above:Financial resources: It refers to the policies that who the Volkswagen should get funds and money to accomplish the activities included in strategy implementation (Yang, 2017). In present there are two important ways have been available for enterprise like debt and equity. Equity of enterprise is considered asHuman resource: For the implementation of strategy, there is major requirement for enterprise to hire qualified and competent employees in order to gain there support in new product development and influencing the new and targets (Reich, and Benbasat, 2013).Competentemployeeswillinnovativeideasandmanufactureuniqueand innovative vehicles for Volkswagen.Time and material requirements: For every strategy there is specific time and materials are needed to accomplish the project. Volkswagen should use Highly qualified and latest technology, equipments in order to fulfil adopted strategy of product development. Technological resources: It includes the resources like innovative design, computer and latest technology equipments to design the cars and latest machinery to make the vehicles of Volkswagen more effective and unique for customers. 4.3 Evaluation of SMART targets for the achievement of strategy implementation. As per the given scenario, SMART objectives have been referred to targets which are fixed by the company to gain success in business operations and accomplish of Being a most viable and known brand in auto mobile sector enterprise by satisfying the customers (Johnson, 2017). The targets which are fixed by company needs to be Specific, measurable in quantity, attainable in specific time and must be realistic in nature. There is major importance of Smart targets which are as follows;Specific: The target of company needs to specific otherwise the all efforts of enterprise and people will go in vain and cause problems. Target of increasing the market up to 10% in every quarter is considered as specific for Volkswagen. 12
Measurable: targets also needs to be measurable in terns of quantity otherwise it is not possible for company to identify any loop holes. Objective of increase the sale Up to 20% percent in months can be measured in quantity.Attainable: It should be attainable for organisation in specific time limit. Further, it is specified that the organisation will achieve its vision, mission and strategy in order to achieve the business strategy at workplace.Realistic: If the target of organisation are imaginative then it will not be possible for enterprise to attain the imaginary things so the target needs to be realistic (Nordqvist and Melin, 2010). Target of company for increasing the profitability up 20 % is also realistic and achieved by organisation through new product development strategy. Time bound:These strategies are required to be accomplished in specific time limit. Therefore, company has specified that it will increase its market share in every 4 months and raise its sales in every 6 Months and increase its profitability in one year. CONCLUSION In present report, it has been concluded that business strategy is considered as important plans and policies that helps in regulation of business and operations in market that supports in sustaining its current market position as compared to the competitors. Strategic business plans provide important tools to organization for tracking the growth, establish a budget, preparation for unforeseen changes in market. Various business mission, vision, objectives, goals and core competencies of new business concept have been discussed. Further, case study of Volkswagen is taken into consideration in order to analyse the company’s policies and procedures. Various consequences have been analysed which are faced by organisation in its past business operations due implementation of wrong actions. Further, various important model has provided an understanding that company has been affected by internal and external environment which it needs to analyse in order to develop and implement successful business strategy. 13
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