Strategic Analysis of Business Models

This assignment delves into the realm of business strategy, examining key concepts and frameworks such as Porter's Five Forces, SWOT analysis, and information systems strategy. It utilizes case studies to illustrate these concepts in practice, focusing on industries like fashion, automotive (Volkswagen), and domestic airlines. The assignment also touches upon the role of corporate sustainability, innovation strategy, and digital transformation within business models.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Mission, Vision, goals, objectives and core competencies of an organisation.....................1
1.2 Analysis of the factors that have to be considered while formulating strategic plan............2
1.3 Evaluating effectiveness of two techniques used in developing business strategy...............3
TASK 2............................................................................................................................................5
2.1 Strategic positioning of business by carrying out organisational audit.................................5
2.2 Environment audit on an association....................................................................................6
2.3 Significance of stakeholders when formulating new business strategy................................7
2.4 Presentation of a new strategy for a business........................................................................8
TASK 3............................................................................................................................................9
3.1 Appropriateness of alternative strategy relating to market entry, substantive growth,
limited growth and retrenchment................................................................................................9
3.2 Justification of the selected strategy...................................................................................10
TASK 4..........................................................................................................................................10
4.1 Assess the roles and responsibilities of personnel in charge of implementing a strategy .10
4.2 Resource requirement to implement a new strategy...........................................................11
4.3 Contribution of SMART targets to the achievement of the strategy implementation........12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business is a composition of various strategies which enable an association to grow and
develop in any new market or at such phase when everything is getting wrong with an
association. Strategies are such action plan which enable an association to maximise their
activities properly so that better and effective productivity could emerged (Aitken, 2016).
Business strategy is termed as composition of guidelines on which whole association lead to get
operated their work properly. This business strategy project is based on Volkswagen Group
whom once indulge in an emission scandal and to deal with that it is essential for business to
prepare strategic planning. This project describe about how an association will lead to adopt new
business strategy to deal with any unfavourable condition of business. For evaluating various
strategy it is essential to understand various approaches for dealing with various problems.
Moreover, business have to implement adopted strategy properly so that they can create a brand
image for a company.
This project also stated about a new project or a business for which management have to
prepare their report in front of BBC Dragon Den whom provide sufficient fund to an
entrepreneur in order to execute business activities properly. For this, mission, vision, objectives
get prepared along with factors when considering strategic planning. The business idea is of a
restaurant whose name is “Red Chilly”.
TASK 1
1.1 Mission, Vision, goals, objectives and core competencies of an organisation
Strategies are an important part of ant business plan . It is the responsibility of manager
of the company to make effective strategies and plans so that they can implement all their
functions effectively (Amran and et. al., 2016). These strategies are prepared according to the
goals of the company. These strategies help the company in sustaining in the market. Therefore,
strategic planning can be defined as a process in which the organisation makes a roadmap in
which all the activities that will be conducted by them during the whole financial year is
specified. It is very helpful for the employees.
The responsibility of making strategies should be in good hands because then only the
company will be able to execute all of its work in a simplified manner. So, the plan is to open a
Restaurant in London which will be named as Red Chillies Restaurant. In this , the management
has planned to give all types of facilities to its customer so that when they leave the restaurant
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they feel satisfied (Higgins, Omer and Phillips, 2015). This plan will be presented in front of
Dragon Den , BBC. But before presenting it in front of BBC, the entrepreneur is told to present
their whole plan in front of Regents College. In the Business plan , vision, mission, objectives
and goals are discussed. It is as follows:-
Mission – These are designed by the management for meeting the expectations of the customers.
In this all the important information is covered like about the target customers, running is a
business etc. Missions decided for Red Chillies Restaurant are:-
 Expanding the market shares
 Creating value for the customers
 Following the business Ethics
Vision – It is prepared so as to show the customers that what are the planning that company has
done for their future. It is very necessary to be prepared. Vision of Red Chillies Restaurant are:-
 Expanding the business all around the world.
 Earning customer satisfaction and value
 Becoming a modern and innovative company.
Goals and Objectives - These are the aims on which the functioning of the whole company is
based on. It can be for short term as well as long term too. Goals and objectives of Red Chillies
Restaurant are:-
 Supplying healthy and beneficial products to the customers.
 Keeping the food cost at less than 35% of the revenue earned.
 Aims to increase the sales by 20% every year.
Core Competencies - These are the special skills that must be present in he business as this will
only make them different from others (Hockerts, 2015). It will helpful in creating a brand image
in the market and will connect more customers .
1.2 Analysis of the factors that have to be considered while formulating strategic plan
There are various factors that are requited to be present in the business so that an
effective strategic plan is formulated. It is the responsibility of management of the company that
they make use of these strategies to attain the goals of the company. In case of Red Chillies
Restaurant, the top level management of the business will frame such strategies that will help
them in overcoming their issues and achieving their goals in an easy manner (Ibrahim, Dumas
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and McGuire, 2015). The main factors that are required to be implemented while making a
business plan are:-
 Communication -It happens many times in various companies that the strategies that are
prepared by the management does not match with their vision and the employees are also
not aware of it. So, it is very necessary for the management of Red Chillies that whatever
strategy they prepare, the employees of the company should be aware of it.
 Engagement – There are various organisations that make use of formal strategic planning
process while taking decisions for themselves. It is very necessary for Red Chillies
restaurant to engage their employees in the decision making process so that they will also
be able to give their ideas and contribute to the company.
 Project management – It is considered very crucial for the management of Red Chillies
restaurant to understand and execute the strategies that are prepared by then managers .
Through this process only the company will be able to achieve success in the market. The
staff members should be taught how to implement it and complete their goals and
objectives.
 Innovation – It is considered as one of the most important factor that needs to be
considered in Red Chillies restaurant. All the strategies that will be prepared by the
management should be innovative and creative so that they can attract large no. of
customers.
 Culture – While making the business plan, the culture that will be prevailing in the
market should also be decided and accordingly the values and beliefs will be inculcated
in the working environment.
1.3 Evaluating effectiveness of techniques used in developing business strategy
The market that can be used by the company while preparing the business plan is Ansoff
Matrix. It is considered as a strong strategic tool that helps the management in devising good
strategies for future growth (Johnson, 2017). It is basically a product market strategy which
guides help the management in making strategies as per the requirements of the customer . In
case of Red Chillies restaurant, this strategy will be helpful in determining that what kind of
products should they offer to their customers or what new products can they develop. It consists
of four growth alternatives:-
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 Market penetration – In this the company tries ton grow in the market by making use of
its existing products (Lueg, Pedersen and Clemmensen, 2015). So , in case of Red
Chillies restaurant, the management will make use of their present exotic dishes so as to
attract large customer base. This will help them in gaining market share.
 Market Development – In this , the company will try to enter into new market by using
their existing products and services. In case of Red Chillies restaurant, they can enter
into new geographic areas by using their current famous dishes. This strategy can be
profitable only in case when the new market in which the company is offering is similar
to the one they have experienced.
 Product Development – In this , the company tries to create new products and services so
as to achieve growth in the market. Red Chillies restaurant can make use of this strategy
by extending their cuisine and bringing in new dishes from all over the world. This will
help them in attracting more customers through these exciting offers.
 Diversification – It is the market strategy in which the company tries to enter into new
market segments and offers new products as well (Martinez-Simarro, Devece and
Llopis-Albert, 2015). It is the most risky strategy among the four. This strategy can be
used by Red Chillies restaurant but it will not be used much since they are already new
in the market and by entering into another new market will not be a good step.
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(Source: Ansoff Strategy, 2017)
TASK 2
2.1 Strategic positioning of business by carrying out organisational audit
Business is a composition of various activities whom require suitable guideline and
blueprint to execute them. Strategic positioning evaluate the concept of positioning of business in
near future while taking in account the dynamic business environment and current position. It is
an essence about how an association lead to compete in market and serve customers in market
(Strategic Positioning, 2017). Hence, for making strategic positioning of business, management
have to carry out an organisational audit through which all strength and weakness along with
opportunities and threats get evaluated. Emission scandal of Volkswagen impacted their work
and their name as well which stated that their number of customers get decrease with a time
frame. Hence, management have to carry out an organisational audit through which they become
able to determine all related aspects of an association properly.
Strengths Weaknesses Opportunities Threats
A major strength for a
company is that they
Emission scandal
impacted a weakness
Once the scandal take
place, business
A major threat for a
company is increase in
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have international
presence which
support them in order
to enhance profit
margin.
for a business
association through
which their
profitability get
reduce.
evaluate that fuel
efficient vehicles are
more appropriate and
beneficial in keen
competitive market
world.
competition. From past
few years, many
automotive business
expand their number of
activities.
Volkswagen have
good research and
development
techniques which
support them in order
to bring more and new
innovations.
At internal market,
their number of
competitors are wide
in nature which
impacted their
performance and
offerings as well.
Another major
opportunity for
business is to reach
such nations where
still some
improvement and
requirement is
essential.
Scandal impacted their
working which further
affected business
operations in which
innovative
manufacturing are not
taking place properly.
Quality of their
automotive are good in
nature through which a
luxury feel get inhale.
By taking back 5
million cars again,
management
determine that their
market share get
decrease as well as
their revenue also get
reduces.
Opportunities in
market world for
Volkswagen stated as
by manufacturing
such cars whom are
automatic in nature
and have good quality
features.
Fluctuation in
exchange rate of
company also impacted
their working and
consider as major
threat.
2.2 Environment audit on an association
Business managers have to evaluate the external environment of business through which
management become able to deal with various consents of society (Mellat-Parast and et. al.,
2015). Environment audit is essential for every business through which they are going to
evaluate all irrelevant elements. Strategic positioning of business requires suitable environment
examination so that management become able to deal with current scenario and manage business
strategies with future consents. Volkswagen already indulge in a scandal which impacted their
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operations. But they have to organise an audit by consulting Porter Five forces which enables
them to deal at external market world (Volkswagen AG – Porter’s Five Forces Analysis, 2014): Barrier to entry: Whenever a business wants to enter into a new market world they have
to face so many barriers which are associated with taking start up cost, dealer network,
licensing and trust over on brand. US environment protection agency claimed that
Volkswagen use unfair software in their vehicles just to pass the emission test. Thus, trust
of users on an association vehicle get impacted through this factor and hence, barriers are
created with a entry concept. Power of suppliers: Volkswagen prepare and produce spare parts of their vehicles by
own and thus, in context of that power of suppliers is low. Hence, this is a reason behind
that they can produce high quality products and sustain at market for long term context. Power of consumers:After the case of emission scandal, power of consumers become
high in nature. Thus, management have to take this factor in account while they are going
to sale out their cars in a market. Availability of substitute: Due to more number of substitute in market, this consent is also
high. There are vast range of substitute are determine in market like Honda, Mercedes,
BMW etc. Hence, after this consent, many people using public transport, cycle etc. for
travelling.
 Rivalry: US automotive industry is very wide in nature and number of rivalries are high
in nature as well. As number of Japanese auto maker are increasing day after days.
2.3 Significance of stakeholders when formulating new business strategy
Stakeholders are such people whom are related with a business directly, indirectly,
internally or externally (Pisano, 2015). They are important for an association through which
management become able to sustain at keen competitive market for long term context. Hence,
management have to take their stakeholders in account whenever any new strategy get framed
out. Thus, for making new business strategy, association have to take all their present and future
stakeholders in consideration which term as “stakeholders mapping” (Shareholder mapping,
2017). Volkswagen have to take three major stakeholders in account while they are going to
prepare new business strategy after emission scandal:
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Illustration 1: Illustration 2: Shareholders mapping
(Source: Shareholder mapping, 2017) Connected stakeholders: Volkswagen AG have to determine that customers,
shareholders, financiers are major connected stakeholders for a company. Thus, when
business wants to implement or frame a new business strategy they have to take their
stakeholders in account (Rosemann and vom Brocke, 2015). Emission scandal create a
negative image of a company in front of their users but now they have to frame such
strategies through which they can deal with this concern and manage working. Internal stakeholders:Employees and managers of a company are helpful in order to
implement all strategies properly. Thus, management have to make effective and
appropriate relationship with their users so that they are going to manage activities
properly. VWAG have to abide effective relationship with each and every internal
stakeholder of a company so that they are going to execute all task properly which are
concerned with new action plan.
 External stakeholders: Government, media, pressure groups, society are one whom are
external stakeholders of a business. Volkswagen have to take all of them in account
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properly as in emission scandal, a negative side and image of a company get created.
Thus, their reflection on society is not appropriate and positive in nature as well so
management have to understand all regulations properly and take effective approaches in
account so that they are going to deal with such issues and problems and make their
reflection positive in nature by introducing ethical plans (Scholes, 2015).
2.4 Presentation of a new strategy for a business
Goals: These are the general targets or a pathway on which whole association have to
work properly. A major goal of a company is to create a positive image of Volkswagen in terms
of general customers as after scandal their image and work get impacted most. Along with this,
their major goal is to maximise profit margin with 25%.
Objectives: Basically, it is developed for the shorter time frame; hence, entire goals will
attain effectively. Some objectives are:
 Determine BCG vector properly and start operating in a new market
 Control emission from vehicles
 Launch new and automatic vehicles
Strategy: They adopt a strategy of “Together” for the year 2024, which basically
concentrate on improvisation of image of firm. By working together they lead to maximise their
profit margin as well as they also have to determine the marketplace whose growth is high, low
or moderate in nature.
Tactics: It is way to reach to desired targets of organisation. As goal of Volkswagen is to
increase their 30% sales and for this aim they will utilized below mentioned tactics:
 Develop client oriented goods
 Sustainable improvement
 Accomplish the requirements of partners, investors and along with staff members.
 Utilisation of latest methods
 Not to harm environment.
Segmentation targeting and positioning: Position of a company was far good but after
emission scandal their market position get impacted. Elsewhere, management already operating
in more than 150 countries and operate production facility in 27 countries as well. Global scandal
wiped up more than 40% share of capitalisation of market which impacted their business badly.
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Hence, they need to produce quality products and recreate their positive image as well in most
profitable market.
TASK 3
3.1 Appropriateness of alternative strategy relating to market entry, substantive growth, limited
growth and retrenchment
It is essential for business to identify and adopt suitable marketing strategy technique
through which association become able to establish them at market world (Smink, Hekkert and
Negro, 2015). Thus, alternative strategy is essential for business so that in case if working do not
get execute properly through current action plan then such actin plan lead to support in such
consent. VWAG managers identify that they have to implement suitable alternative strategy in
their business operations:
Market entry: Volkswagen can introduce themselves at new market world in which they
have to manufacture and produce more quality and appropriate vehicles so that they become able
to sustain at market for long term. Market entry is an option which enable business to improve
their negative image and convert into positive one.
Substantive growth: One of a major thing when preparing business successful in nature
is to consider the strength and strategy of competition. By gaining immediate substantive growth
ensure business success against competition. Through this, VWAG can ensure success through
maximizing area of expansion of their operations which enable and ensure success.
Limited growth: VWAG have diverse number of resources as well as have good financial
condition through which they are able to expand business properly. But once such global scandal
take place then business do not become able to expand their number of operations in some other
parts of a world.
Retrenchment: Emission scandal impacted business very badly and thus most of their
capitalization get paid off. Retrenchment strategy stated that business operations impacted very
badly and management have to frame suitable strategy in order to deal with various aspects.
3.2 Justification of the selected strategy
VWAG selected market entry and substantive growth strategy for business because
through this, management become able to deal with various consents effectively. Through
market entry, association become able to manage their image of a company. Global emission
scandal impacted business and around 40% shares already taken back by an organisation. Thus,
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VWAG have selected this action plan which enable them in order to make operations more
appropriate and effective. Market entry support them to survive at market world properly
because they can collaborate business activities with some other corporations of some other
country. Some major harm to business after emission scandal are as follow:
1. There sales was go down after scandal.
2. Less revenues.
3. Decrease the reputation of firm.
4. Company is not updating their methods timely. There are many rivals of VW at
marketplace are Tesla, Toyota.
5. If they use inventive methods into their car then, they can easily survive at market for
long time period.
TASK 4
4.1 Assess the roles and responsibilities of personnel in charge of implementing a strategy
It is very important for the companies to execute their strategies in a correct manner
because then only they will b e able to achieve their goals and objectives on time. A person is
appointed by the management to look after that the strategy is being implemented correctly or
not . It is vert important for the project manage to define the roles and responsibilities to all the
persons who is associated with the business plan (Woerner and Wixom, 2015). All the roles
should be clearly defined and explained to the individuals so that they do their part without any
issues. They are required to keep records of all the work they do so that it can b used as reference
in future. Their personnel who is made in charge of the activities will have to make sure that all
the work is being done as per the plan only. In any issue is arise in future then they will only
correct it.
The roles and responsibilities of personnel who are associated with the strategic planning are :-
PERSONNEL ROLES AND RESPONSIBILITIES
Top Management These are the most important people of the
business and they are only responsible for
making strategies and plans so as to achieve
growth and development in the market.
Senior Management These people help the top management in
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designing an effective strategy for the
company. They are being appointed by the top
level management and thus they will be very
efficient in their job.
Engineers Personnel These are the people who help the company in
deciding upon that which strategy is best for
the company and will benefit it in long run.
4.2 Resource requirement to implement a new strategy
There are several types of resources that are necessary to be used while implementing a
strategy. Since the aim of Volkswagen group is to enhance its market share and increase the no.
of outlets all over. They are making use of Ansoff's market growth strategy so as to grow in the
marketplace. They will require various resources so as to implement these strategies effectively.
Few of them are:-
 Human Resources – These are considered as one of the most important resource in any
organisation since they are the only ones who implement all these strategies in an
organisation (Aitken, 2016). By taking help of these, the company tries to fulfil their
objectives. The staff members do their part of their work effectively and help the
company in achieving the market share in an effective manner. With the help of these
employees , the company can successfully open new retail stores and manage it also.
 Financial Resources – It is also one of the pivotal resource that is required in any
businesses. Without these no company can conduct any operations as they help in buying
the resources which are then used to make the products. Since Volkswagen aims to open
new retail stores then they will definitely need financial resources so as to set the
business effectively. Company can raise finance through equity and debt or using their
own cash.
 Time and Material resources – It is another type of resource that is used by the
companies to implement their strategies successfully. These resources can be in any form
like Technology, machines etc. These resources will help the employees in completing
their part of work efficiently (Amran and et. al., 2016). It is the responsibility of the
management to make sure that they are making use of good resources so that the
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workload of employees is reduced. The employees should be trained about the
technologies that will be used by them in performing their work. Through this, the
company will be able to achieve their targets on time.
4.3 Contribution of SMART targets to the achievement of the strategy implementation
If the company wants to achieve success by implementing strategy then they will have to
make sure that their objectives are made as per the SMART targets. The managers should ensure
that the goals that are prepared should be smart and eligible. It will help them in achieving high
market share and growth as well.
The SMART targets is as follows:-
 Specific- The aim of the company should be to deliver high quality products to its
customers and make sure that their production does not hurt the environment.
 Measurable – It should be noted that the goals of the company should be able to
measured on time. They can make use of graphs and chart or some data.
 Attainable – The goals which are set by the company should be attainable and practically
applicable too. It is very necessary because otherwise company will keep on working and
will not reach anywhere (Higgins, Omer and Phillips, 2015).
 Relevant – The aim of the company should be relevant and relatable with the vision and
mission of the organisation.
 Time Based – The time which is allotted against each and every activity should be
appropriate and not less otherwise the work will not be completed on time.
CONCLUSION
It get concluded from the project that business require sufficient fund as well as
techniques in order to deal with markets and their competitors. For this, they have to prepare a
mission & vision as well as goal, objectives which facilitate effective growth. Moreover, for
creating new strategic plans, association have to evaluate all their strength and weakness and
external market environment. Moreover, they also have to map out stakeholders of a business
whom are responsible in order to make things correct. Supervisors also have to evaluate all
alternative strategies properly so with an approach, alternative action plan is also essential.
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REFERENCES
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