Business Strategy of Volkswagen : Report

Added on - 06 Jun 2020

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Business Strategy
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1TASK 2 FORMULATING A NEW STRATEGY..........................................................................12.1 Strategic positioning of Volkswagen after carrying out an environmental audit..................12.2 Organisational Audit for Volkswagen..................................................................................22.3 A new strategy for Volkswagen............................................................................................3TASK 3............................................................................................................................................43.1 Analysis of appropriateness of alternative strategies relating to market entry, substantivegrowth, limited growth or retrenchment for Volkswagen...........................................................43.2 Justification for selection of strategy for Volkswagen..........................................................5TASK 4: IMPLEMENTATION OF CHOSEN STRATEGY.........................................................64.1 Roles and responsibilities of personnel at Volkswagen who are in charged with strategyimplementation............................................................................................................................64.2 Analysis of estimated resource requirements for implementation of new strategy..............74.3 Contribution of SMART targets for achievement of strategy implementation.....................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONFor business improvement strategic planning is essential to compete with theenvironment in which the organisation exists. Articulating an effective strategy is an essentialpart of strategic management. Before formulating the strategy, first step is to carry out anenvironmental audit for the organisation so that the internal (micro) and external (macro)environments are analysed and evaluated for the purpose of selecting the best alternative strategyout of all available strategies. There are few alternative approaches to analyse the businessstrategies like market entry, substantive growth strategies, limited growth or retrenchment(Kourdi, 2015) However, CEO and COO of company are responsible for implementation ofstrategy, all other departments are also affected. Owners have to communicate the planthoroughly because shared vision is important for organisation to motivate employees. It bringsenergy and focus in workforce, creating a learning organisation. To achieve full potential out ofStrategy formulated; SMART targets are considered in strategy planning i.e. targets should beSpecific, Measurable, Attainable, Relevant and Time Specific such that they contribute towardseffective strategy implementation.TASK 1Enclosed in PPT.TASK 2 FORMULATING A NEW STRATEGY2.1 Strategic positioning of Volkswagen after carrying out an environmental audit.Environmental audit is broadly conducted to evaluate the current positioning of business.Also, named as Cycle Audit, to assess capacity of the organisation in all areas of cycle: planning,resourcing/funding, or marketing etc. It is the self diagnosis of organisation, Volkswagen'sstrategic vision is to become the most successful, captivating and viable auto-mobilemanufacturer, company is realigning the targets due to fundamental changes in the industry. Themain goal of company is to become global ecological and economic leader of automobileindustry, in that context company has come up with intelligent innovations to satisfy customers'needs and quality demands.1
The organisation has relied upon market growth expecting 10 million vehicles to be soldper year. Company pays particular attention to the environmental protection and profitability toits vehicle-related projects, simultaneously controlling the size of investments (Campbell, Edgarand Stonehouse, 2011). The attractive range of environment friendly vehicles has elevated thecompany's market position in the industry. Continous expansion of individual brands has takenthe company to excellent position in the Car Industry. Volkswagen wants to be the global dealerin Electric cars by 2025 i.e shift to clean energy vehicles. To determine new ecological criteriaefforts are being put in production of vehicles, aggregates and light constructions. Dailyactivities aiming to productivity are performed to increase customer satisfaction without any timelimit, irrespective of overall economic situation. Standardisation of production cycles are beingdone, with consistent cost investment discipline to achieve long term objectives concerningprofits and financial solvency. Additionally, the “future tracks” plan has already been laid forrealigning the future e-mobility issues, new business strategies and digitalization.For year 2025, the strategy focusing on digitalization, integrity and legal affairs, andsustainability, presented results in mid-2016. Satisfied customers and motivated employees,excellent quality products and services, sustainable profitability and ecological responsibility arethe aims of Strategy 2018, and remained unchanged. Company is seeking 8 percent sales beforetax to ensure solid financial positioning in the industry. It wants to achieve the best employertitle in automobile industry, having best team in car industry. Having highly professional andqualified staff who would be motivated and passionate towards their work is what companyrequires. Lazy and unprofessional staff gradually leads to failure of organisational goals.2.2 Organisational Audit for VolkswagenAfter conducting organisational audit by SWOT and PEST analysis to evaluate theVolkswagen's strategic positioning. It has been found that the company's strengths are wellstructured brand, being one of the oldest car manufacturing company. Volkswagen is growingfast and high technology inbuilt in cars shows the strength in Research and development,weaknesses of the company are 'The Emissions scandal' which affected the brand thoroughly andcompetition eating away margins. Opportunities for the company is increased purchasing power,possible world expansion, modern and innovative design after emission scandal. Organisation2
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