Sustainability Strategy & SWOT Analysis

This assignment focuses on strategic management in business ethics, talent management, environmental strategies, and global network analysis. Using the McKinsey 7s Model and performing a SWOT analysis on Volkswagen, students will analyze the company's internal strengths and weaknesses, as well as external opportunities and threats. The assignment also explores corporate sustainability governance and environmentally friendly export business strategies.

Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Assessing the way Business Vision, mission and goals and objectives inform strategic
planning..................................................................................................................................1
1.2 Analysing the factors that are required to be considered when developing strategic plan2
1.3 Evaluating the effectiveness of techniques used when developing strategic business plans
................................................................................................................................................3
TASK 2............................................................................................................................................4
2.1 Strategic position of VW AG by carrying out organisational audit. ...............................4
2.2 Environmental audit for VW AG.....................................................................................6
2.3 Significance of stakeholder analysis. ..............................................................................7
2.4 New strategy for VW AG.................................................................................................8
3.1 Alternative strategies relating to market entry, substantive growth and retrenchment....9
3.2 Justification of selection of strategy ................................................................................9
4.1 Roles and responsibilities of personnel at VW AG .......................................................10
4.2 Estimated resource requirement for implementing a new strategy................................10
4.3 Evaluate the contribution of SMART targets to strategy implementation. ...................11
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy play major role in the growth of the firm. It helps the entity in proper
planning and directing the firm in right direction that help them in achieving its goals and
objectives. It helps the firm in making right decision regarding the allocation of the resources so
that maximum use of it can be done.
Business strategy play major role in motivating and increasing the sustainability of the
firm in the market. Business strategy provide the firm with perfect guidance and the structures in
which business plans are implemented. In current report the importance of business strategy in
discussed in details along with this how a business strategy can help in survival of the firm is
also mentioned. Business Vision , mission, goals and objectives will be discussed along with
their role in strategic planning. Different factors that are considered at development of strategic
plan is also discussed in detail. Internal and external audit will also be mentioned. Importance of
stakeholder analysis along with various strategy that can be adopted by the firm will also be
analysed.
TASK 1
1.1 Assessing the way Business Vision, mission and goals and objectives inform strategic
planning
Strategic Planning is refers to the procedure of deciding and defining the strategies or
tactics that are required to be executed in order to achieve goals, objective and developing core
competencies. This procedure is largely impacted by the vision, mission, and core competency
of the firm. All these elements have great impact on the business policies, procedures, business
plan etc. The policies, system and procedures are designed by manager on the basis of the
organisation goals and objectives (Butler, 2012)
Hungry house is a company that deals in hotel industry. The organisation provides
premier online platform for takeaway and food delivery. It has 9999 restaurants worldwide.
Vision of Hungry House: Hungry house has partnered with the best takeaways across Britain so
that customer can find and order a delicious meal in minutes.
Vision is defined as the state that the business entity want to achieve in the future. The
vision of Hungry House is to generate wealth for workers, their families, franchisers and
business partners. Their other vision is to continue ethical working and developing a suitable
growth model that is suitable to food sector.
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Mission of the business entity is to deliver good quality food at reasonable price. It other
mission is to provide convenient, faster services to its clients. The other mission of the
organisation is to develop its employees so that the firm can deliver effective, quick and
professional service to its clients.
The objective of hungry house is same as other organisation that are dealing in food
industry. The purpose of Hungry house is to generate high volume sales. The objective of the
firm is to develop new programme in order to replace their existing solution to generate high
income.
Core competencies of Hungry House is that the company has expert team of cooks and
marketing team. The organisation also has innovative technology that assist enterprise in
preparing and delivery tasty food to customers. Business entity has conduct effective partnership
with the reputed firms that has allowed organisation to deliver quality food at reasonable price to
consumer. This partnership strategy has supported cited venture in gaining customer loyalty and
increase profitability. Unique culture has allowed business entity to gain support from its
member and achieve business goals as well as objectives (Dandira, 2011.)
1.2 Analysing the factors that are required to be considered when developing strategic plan
The strategic factors are those important elements that business entity require to
considered in order to achieve success and foster growth. The following are the elements that are
important to be considered when formulating strategic plan these are:
Vision and mission of the company-
Stakeholders-The stakeholders are those significant person who have direct impact on business
performance and great influence on decision, plans and policies of firm. The important
stakeholder of hungry house are managers, workers, supplier, customers, partners and creditors.
Stakeholders have various expectation that has great impact on decision and strategic planning.
This factor has great influence on the objective of strategic planning and also on the outcome
that is generated by implementing the plan. The strategic plan should consider the interest of
each individual who are directly associated with operational activities in organisation as this
factor has great effect on business performance.
Environment-The organisational environment can be categorise into two these are internal and
external conditions. Both the environment are required to be considered when developing
strategic planning. Analysing the internal factors assist manager in identifying the strength and
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weakness of firm. Scanning the external environment support manager in Planning the suitable
tactics in order to reduce the effect or influence of macro environmental variables on business
operations.
Action plans-These are to be considered as this factor has great effect on the outcome. These are
closer to achieve the goals which helps fulfil the Business objectives.
Resources: It is the basic requirement of any organisation that helps business entity in achieving
its strategic goals and objectives. The resources of the firm are required to be allocated as per the
output of the procedure. As lack of resources can lead to ineffective strategic planning.
Defining the competitive advantage-It helps the manager in determining the position that the
company can achieve in relation to its competitors (Elhamma and Zhang, 2013)
1.3 Evaluating the effectiveness of techniques used when developing strategic business plans
BCG matrix is the appropriate tool that can be used to measure the effectiveness of
Strategic business plan. It is a planning tool which utilises graphical representation of
organisation products and services. BCG matrix is an effort to assist business entity in deciding
what is should keep, sell or invest in. It also supports manager in identifying the condition or
situation of the company. It aids manager in developing plan and suitable tactics that can be used
by enterprise for solving various business issues and improving performance. BCG matrix assist
Hungry house manager in determining the level of industry in terms of share and market value.
It helps manager in formulating strategic business plans. The strategic organisational
plans are developed Buy considering the growth rate and current situation of the industry in
which the cited venture is operating. BCG matrix is more concerned with determining the
industrial growth along with the share of organisation. It consists of four dimensions these are
star, cash cow, dog and question mark. Cash cow indicates the stagnant growth of industry but
favourable market share for Hungry House. Question mark demonstrate low business share and
slow industrial growth. Stars symbol indicates high business and industrial growth rate. The dog
symbol demonstrate slow industrial and business growth (Bucoloand Matthews,2011)
The other technique is directional policy matrices that can be used to measure the
effectiveness of the technique used in development of strategic business plans. The significance
of this tool is that t is a choice between two or more good operations. It assists manager in
deciding which field the firm should develop tactics in order to achieve desired business goals
and objectives (Ferreira and et. al., 2011)
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TASK 2
2.1 Strategic position of VW AG by carrying out organisational audit.
Volkswagen is one of the biggest German automotive company that owns its existence
for more than 80 years. The firm is known for designing, manufacturing and distributing both
passenger and commercial vehicles, motorcycles and engines. In 2016, the firm become the
world’s largest auto maker by sales, overtaking Toyota. The firm is known for selling passenger
car under very well-known companies such as Audi, Bentley, Bugatti etc. However, the firm is
divided into two parts that is Automotive division and the financial service's division. The firm
has more than 342 subsidiaries. In current time, it is operating in more than 150 countries and
has 100 production facilities under its name in 27 countries all over the world (History of
Volkswagen, 2018). The recent Emission Scandal has made VW see it the biggest drop in the
business. Volkswagen was accused of installing illegal software to cheat emission test. It has the
most adverse effect on the sales of the firm. In the current time, the firm is trying to overcome
this issue by focusing more on their strategic planning which can help them in overcoming this
issue.
Internal audit helps the organisation in identifying various issues in the firm that are
affecting their performance. This supports the firm in coming up with the best solution that can
help them in overcoming this issue. There are many ways through which cited firm can conduct
its organisational audit which are mentioned below:
SWOT Analysis
Strength
 The firm has the widest portfolio
among all automotive companies.
 Strong diversification strategy
 Strong brand presence all over the
world (SWOT analysis of
Volkeswagen, 2016 )
 Joint ventures with local Chinese auto
maker.
 Well managed operations.
Weaknesses
 Emission scandal adverse effect on the
brand image of the firm.
 Low market share in U.S.
 No competence in making battery
driven vehicles. Have little to no
expertise in this.
 The firm has the highest recall rate in
the market of U.S.
 Parent brand can be strengthened
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 High investment in research and
development
Opportunities
 There is high chance that fuel prices
will rise in near future.
 In future, demands for autonomous
vehicles will also increase.
 Weakening of Euro will also work in
the favour of the firm. Firm should focus on sustainability
policies that can help them in
improving their brand image.
Threats
 High competition
 Increasing government regulation
 Emission issue
From the above analysis, the firm can evaluate its strength and weaknesses. Through this,
it can come up with better strategy that can highlight their strength and eliminate their
weaknesses and help the firm in achieving their goals.
McKinsey 7S is another technique that can be used by the firm in order to evaluate their
performance. In this, focus is laid on two elements that is hard element and soft element.
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Illustration 1: Mckinsey 7s model
(Source: Mckinsey 7s model 2013)
Hard Element Soft element
Strategy
System
Structure
Shared values
Staff
Skill
Style
The firm uses cost leadership in their working which makes it possible for the firm to
have maximum utilisation of economies of scale. It also helps the entity in exercising their
bargaining power that help them in securing various deal with suppliers at much lower price.
The firm is trying to implement flat structure in their working so that they can have better
relation with their employees at lower level and more efficiency can be brought in the decision-
making process (Ferreira and et. al., 2016). The firm is working in order to simplify their system;
it relies on various range of system to carry out its daily operations. More focus is laid on the
soft skill so that overall improvement in the firm can be brought.
2.2 Environmental audit for VW AG
Political factor: VW AG is a global firm that is operating in more than 150 countries and has to
follow the rules and regulation laid by the government of those countries. It is necessary for the
firm to understand the political pressure and situation of all the countries in order to work
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efficiently. Each country has different political condition and in order to survive, it is necessary
for the firm to come up with the strategy that can help them in their survival. Car industry
heavily relies on the various policies laid by the government (Klettner, Clarke and Boersma,
2014). The car industry also relies on financial and banking industry as they provide people with
the vehicle loan. The interest rates in this is determined by the government policies. Many
emerging economies are investing on the development of automotive industry and Volkswagen
is taking advantage of it.
Economic factors: As we have discussed before the developing countries are helping in the
development of the auto mobile industry as they play major role in the development of the of
countries economy. Automotive industry along with it also helps in the growth of other industry
such as steel and glass that play major role in the development emerging economy. This factor
will work in the favour of Volkswagen. There is also negative side of this uncertain economic
condition of the world as it have its impact on the Automotive industry. For e.g. European Debt
crisis is one of the biggest problem for this industry. If people do not have money, they will not
spend necessary amount on buying vehicle. So, it is necessary for the firm to understand the
economic environment and then come up with a strategy that can help them.
Social factors: Social factor also play big role in the development of auto-mobile industry. In
order to work efficiently, it is necessary for the entity to focus on the factor such as religious
faith etc. with care. By increasing number of accident, it is having adverse effect on the
perception of society (Shanbhag, Dutt and Bagwe, 2016). There is also positive side to this:
Volkswagen is big company and provide employment to thousands of the people. It helps in
improving the lifestyle of the people.
Technology Factor: Technology in the automotive industry is an important part. Volkswagen is
among those companies that have the best technology in the car manufacturing. As we already
know, it operates in both classical and sports cars. In order to survive in this competitive
environment, it is necessary for them invest in better technology for production that can help
them in their survival.
2.3 Significance of stakeholder analysis.
Stakeholder is those people who get directly or indirectly affected by the action of the
firm and has same influence on the working of the firm. Its essential of the firm to pay attention
to the needs and demand of their stakeholder before making any strategic plan as they act as the
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key factor in the business success. All project depend upon selecting a stakeholder with whom
they can work together so that threats can be reduced or reserved.
With the help of stakeholder analysis Volkswagen can come to know about the interest of
all stakeholders that may get affected by the changes. For instance Customers, When making a
strategy its important of the firm to pay special attention to the needs and demand of the
customers. Its expected of the firm to have honest, fair and transparent communication and
interaction with their customer (Niederwieser and et.al., 2016). With the help of market research
firm can come to know about the need and perception of their target market that helps them in
come up with better strategy that can help them in their success.
At the time of implementation of strategy proper stakeholder analysis helps in building
proper relationship. For instance, analysing the role of employees in the company help in
optimizing the satisfaction and production of the firm. Understanding the key needs and demand
of the employees and fulfilling them help the firm in motivating them. It also helps them in
increasing the involvement of employees they help the company by coming up with innovative
idea that can help them in overcoming the problems.
2.4 New strategy for VW AG
The term strategy means deciding the plan and action with the help of which the firm is
need to operate its function in the effective manner. This is the kin of the systematic process
which is helpful in order to deal with objective of the firm so that the organisation is able to run
its activities in the smooth manner. In this manner there are various kinds of the strategies are
given such are as-
Corporate strategy- in order to deal with the working of the enterprises the firm need to work
towards the one objective and they need to be focused about it.
Business strategy- They are the person who mainly deal with in order to have identification of
the choice and preference of the consumer so that they can able to work in the proper manner.
Operational strategy- In order to deal with the function of the firm it is very important to run
the oppression of the business effectively. In this they need to give major focus over the process,
propel and resources.
In order to overcome the scandal its necessary firm to take firm step in order to overcome
this and control the damage. The firm can put more focus on the sustainability development that
will help them in creating good image in the eye of the customers. One of the biggest weakness
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of the firm is their lack of competency in their electricity and battery driven market. IN order to
be successful its crucial of the firm to invest in the development of electric vehicles that can help
them in overcoming the issues they are facing and also help them in cope out from their diesel
emission test (Bull and et.al., 2016). Other than this firm can also cut some cost at their largest
revenue division and can invest that money in using “best environmental technology” that will
help them in creating positive image in the eye of the customer. In order to overcome this issue
its crucial of the Volkeswagen to take make necessary changes that can help them in recovering
from this scandal. The firm can run a PR campaign to make people aware about the real issue
that firm is facing, many of the people are still unaware about the main issue and only thought
that the firm has done something immoral. Many of the people doesn't care about the
environment as long as their car provide them with power and mileage. This campaign will help
them in clearing the issue among people. It will help them in regaining customer trust other than
this they can also conduct a rigorous Voluntary emission testing and certification. They can also
invest some money in the environmental charity activities.
Present strategy of firm-
The strategy is very important in relation to deal with the functioning of the firm in the ffectie
manner. By bringing the process of product development they are able to capture the long term
share in the market. With the help of the proper execution of the strategy the product can be
developed and innovation procedure can be taken. Product development is very helpful in order
to attract the new customer in the market so that they are able to maximise the large amiunt of
the profitability. The Volkswagen need to make changes in the products of the firm so that tghey
are able to generate high volume.
3.1 Alternative strategies relating to market entry, substantive growth and retrenchment.
Volkswagen main aim is to achieve their long term goal, in order to do so it tries to come up
with different strategy that can help them in achieving that. Below different strategies are given
which can be adopted by the firm. Market entry: This type of strategies help the cited firm in entering new market and
establishing their business there. With the help of this strategy the Volkswagen can
analysis their new market, potential customer and competitors. Volkswagen can adopt
acquisition in their working this will help them in increasing their brand awareness and
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brand name. Its also most effective method in the light of emission scandal it will help in
reducing the risk. Sustaining: This strategy focus on various diversification that can help firm in its
development. There are two basic diversification strategy. Related diversification focuses
on diverse its operation in the current market. Unrelated diversification help company to
indulge product category (Martinez-Simarro, Devece and Llopis-Albert, 2015).
 Retrenchment strategy: This strategy help the firm in selling their non profit stores and
help in investing their money in right place so better results can be achieved.
3.2 Justification of selection of strategy
Volkswagen can use various strategies that can help them in attaining their desired goals
from all the mention above strategies the firm can focus on the market entry strategy such as
merger and acquisition both will work in the favour of the firm. In current time when the
customer trust in the firm is still unstable this strategy will help them in establishing their
business in emerging countries. With the help of merger and acquisition the firm can reduce the
risk that come with the entry in new market (Scholes, 2015). It will also provide the firm with
necessary support that can help them in entering the new market. Other than this in merger and
acquisition the risk are reduced in half and there is also a continuous flow of money which is
necessary for the various operation of the firm. This technique will help the firm in achieving its
goal of global expansion further it will also increase their profit. These techniques are most
suitable as it helps them in achieving their goals in the best possible way.
4.1 Roles and responsibilities of personnel at VW AG
The main aim of the strategic implementation is to help the cited firm in achieving their
desired goals. In order to achieve their desired goals its necessary of the entity to make sure that
each of its employee understand its roles and responsibilities so that they can also contribute in
the success of the firm. To have proper implementation of business plan its necessary of the firm
to have effective management team that can help the firm in proper implementation and proper
monitoring of the plan (Sia, Soh and Weill, 2016). A good leader make sure that it delegates the
duty among its subordinates on the basis of their capabilities. So that they can perform well and
can assist the firm in attaining their goals and objectives. The top management is responsible for
the proper communication, so that each employee can become aware about the plan and can help
in the implementation. The management makes sure that whole process is done in proper
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systematic manner so that errors can be avoided. It also helps in analysing the gap between
desired performance and actual performance.
Roles and responsibilities
Low level management: Low level management or employee need to make sure that they follow
all the policies and procedures for smoother working.
Top level management: They are responsible to come up with effective strategies and policies
that can be used by firm in order to achieve their goals and objectives.
Middle level management: They are responsible to create communication between lower and
higher management so that better coordination can be created that can help in the development.
4.2 Estimated resource requirement for implementing a new strategy
In order to implement new strategy the firm is required to have many resources that can
help them in proper working. Some resources required by the firm are mentioned below
Human resources: Human resources is one of the biggest asset of the Volkswagen. Its only
resource that have the potential of continuous development and giving better result. A good team
will help the cited firm throughout the process. Its crucial of the firm to have diverse workforce
that can assist them. Financial resources: It's a must resource that is required by the company in order to
carry out their operations. Financial resources provide the firm with necessary support
that is necessary for the activity. For instance if the firm is planning to enter new market
they are required investing a lot of finance in market research, hiring new employee and
investing in new technology (Ferreira and et. al., 2016). Its important to invest in these
factors as they play important role in carrying out business activities. Material resources: Volkswagen require lot of material in order to implement their
business plan. This will help the firm in producing quality product that can satisfy the
needs and demands of people. It will also help them in attracting lot of customer toward
the firm.
 Time resources: Time is one of the important resources that determines the success of
the firm. Its necessary of the firm to have proper time management so that they can
complete their work in specified time (Klettner, Clarke and Boersma, 2014). Having
proper management will help the firm in making sure that they give specified time to
each of the task so that quality can be maintained.
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4.3 Evaluate the contribution of SMART targets to strategy implementation.
SMART target will help the firm in proper implementation of new market strategy so
that they can gain market share and profitability. With the help of market entry strategy the firm
will be able to establish its business in the new market. This will not only help the firm in
penetrating new market but will also help them in increasing their customer base and
maximising their profitability (Shanbhag, Dutt and Bagwe, 2016). The strong economy of
developing country will help the firm in its development and growth. Along with this the firm
can also invest in digital marketing in order to divert the attention of potential customer towards
them. With the help of smart target the firm will be able to achieve its goal.
This is need to be described in the following manner are as-
In this the S stands for the set objective if the firm in relation to have increment in the market
share of the enterprise so that they are able to achieve the large amount of profitability.
In this the M stands for the measurable target. With the help of this the profitability can be
measured.
In this A stand for the Achievable target which work in relation to execute the each thing in the
better manner.
In this the R stands for the realistic target which work in relation to have two kinds of the
approach are as realistic and unrealistic which is helpful in order to have increment in the market
share.
IN this the T refer to time. This is mist effective function in this way each things is need to be
done in timely so that the firm is able to deal with the oppression in the expert mode.
CONCLUSION
From the above report it can be concluded that the business strategy play major role in
attaining and achieving the goals of the firm. In order to come up with the best strategic plan its
crucial of the entity to pay attention to both internal and external environment so that they can
come to know about their strength and weaknesses and come up with the best strategy that can
help them. Along with this the firm can adopt various tactics that can help them in entering new
market. SMART objectives help the firm in achieving their goals and objectives.
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