The Evolution and Impact of Business Strategy

This assignment delves into the concept of business strategy, examining its historical development and current trends. It analyzes various perspectives on strategy formulation and implementation, including market-oriented, resource-based, and network approaches. The assignment also investigates the relationship between business strategy and organizational performance, highlighting key factors that influence firm success in a dynamic environment.

Business strategy

Table of Contents
INTRODUCTION .....................................................................................................................3
TASK 1......................................................................................................................................4
..................................................................................................................................................14
TASK 2....................................................................................................................................14
2.1 Strategic positioning of VW AG by its organizational audit....................................14
2.2 Environmental audit for VW AG..............................................................................15
2.3 Importance of stakeholders at time of strategy making............................................17
2.4 New strategy for organisation...................................................................................18
TASK 3....................................................................................................................................20
3.1 Alternative strategy's effectiveness...........................................................................20
3.2 Justifying chosen strategies.......................................................................................21
TASK 4....................................................................................................................................21
4.1 Roles and responsibilities of personnel in implementing strategy............................21
4.2 Analysing resource estimation for new strategy.......................................................22
4.3 Evaluating SMART target's contribution.................................................................23
CONCLUSION .......................................................................................................................24
REFERENCES.........................................................................................................................25

INTRODUCTION
A business strategy plays a vital role in the success for each and every business
organization. In modern global environment it is difficult to maintain consistent growth and
development which is very crucial. In order to maintain competitive position business
strategy helps to meet their short and long term targets (Verbeke, 2013). This report based on
Volkswagen limited which is new electric car company and operate their business in the
United Kingdom. The firm wants to provide a consistent growth to their enterprise in the long
run and for this they need to construct innovative strategy so that they can sustain in such
competition level. This report will have explained about the mission, vision and core
competencies of a company and helps to set their future direction. The present report also
explained about the various factors relating to the strategy developed by the top management.
The second part of this report will talked about the VW AG and its environmental and
organizational audit which helps to increase their sales and gain competitive position in the
market. This is very crucial for a company is to understand the overall environment and
design their approaches according so that they can meet its expected results.

TASK 1

TASK 2
2.1 Strategic positioning of VW AG by its organizational audit
A business unit must develop their various tactics and plan which can meet their aims
and objectives for a given period of time. In the case of VW AG which is an automobile
company and operate their business in various countries (Zott, Amit and Massa, 2011). In the
recent years, there are various challenges facing by the cited firm which influence their
operational effectiveness at the greater level. These challenges must be analysed and
evaluated by the company so that they can maintain their performance level in the upcoming
years. The cited firm is operating its business in the UK and other European countries and the
competition level the car manufacturer most challenging task. Therefore, top management of
VW AG can be knowing their capabilities by using SWOT analysis:
Strength Volkswagen having a wide range of products such as Audi, Ducati,
Bugatti, Porsche, Man, Skoda etc.
This company is one of the leading brand recalls which can
provide competitive advantage.

Volkswagen one of the oldest automobile brand and its having
large number of customer across the world.
The cited firm is having more than 350000 staff across the world.
Volkswagen having its own manufacturing plant located in
different continent such as Asia, Europe, America and other parts
of the world.
The company R&D department is too strong which can help to
design innovate and technological advanced products and services.
Weakness Car manufacturing having intense competition which can reducing
Volkswagen market share and profitability (Scholes, 2015).
Last year there are various controversies and fraud which can
influence their brand image adversely.
In the last few years’ customer is more aware towards the
environment and it will increase its awareness about the
environment.
Opportunities Volkswagen having various joint venture in other countries which
provide a large network of its customer base.
There is various emerging car market such as India, China,
Indonesia which having larger base of potential customers which
can provide long term growth in terms of sales and market share.
After globalization market is interconnected which increase the per
capita income of an individual and leads to increase the purchasing
power.
Threats There are various government which increase government
regulation and it will be reducing their performance level.
There is also various new start up in the car manufacturing such as
Tesla and Google which increase competition level in the near
future.
2.2 Environmental audit for VW AG
In the modern business environment is dynamic in nature which required to
understand the future aspects. There are two types of environment internal and external and
its influence on the company current and future performance (Santos-Vijande, López-

Sánchez and Trespalacios, 2012). In the context of Volkswagen, it is more important to
evaluate these environments so that they can make their decision effective and protecting
company from any potential threats. Internal factors are those which influence a business
internally and can be managed by the firm. These elements can be involving customer,
employees, suppliers and so on. Whereas, external factors are related with the elements
cannot under control and having large influence of the company current and future
operations. Volkswagen can use PETEL analysis in order to make provide competitive
position in the market and gain competitive position. These tool are mentioned below:
Political factor This is one of the major factor where the role of government is
very significant. This is related with the political rest in the
country and it provide consistent policies. These are useful for a
business and its future growth.
Economic factor The role of economic element in business growth plays a
prominent role. There are various factors such as GDP, interest
rate, inflation, per capita income etc. For example, if the interest
rate is lower it will help to increase the sales of car in the
economy.
Legal factor There are various legal aspects related with the business and its
role on business operation. It involves, minimum wage rate,
employee discrimination act, working hours etc. For example,
increase in wage rate having negative influence on the
profitability and performance of the company.
Social factor There is various social factor such as culture, language, taste,
preferences etc. In the case of United Kingdom, there are various
people who having good income groups and helps to increase
sales of the company (Ronda‐Pupo and Guerras‐Martin, 2012).
Technological factor The role of innovation and technology is plays a vital role and
helps to gain competitive superiority. In the recent time people are
more demand for the electric and driverless car vehicles in the
upcoming time. Volkswagen is planning to launch their electric
car which can dominate in the automobile market. Further, cited
enterprise also spending billions of dollars on the research and
development so that they can produce a high quality and

technological advanced product in the market.
Environmental
factor
This is the major factor which can influence the growth of
company more negatively (Ramamurti, 2012). Volkswagen was in
the controversies cause of Emission Scandal of organization
according which the most of the cars of company is emitting
dangerous gases which are impacting the environment badly i.e. is
injurious for health of people or other creatures. The company
requires to modify its technologies of manufacture as well as its
vehicle for sustaining in the market of UK. Also for production of
automobiles, it need steel which is polluting the air and water. The
company have developed an effective strategies according which
it will try to convert 50% its activities Carbon free which may
lead enterprise to success.
2.3 Importance of stakeholders at time of strategy making
The people who are directly and indirectly engaged with organisation or related
activities that influence company called stakeholders. It includes employee, investors,
shareholders, suppliers, directors, consumers, unions, state, creditors and other communities.
It play a significant role in creating a plan or marketing or business strategy of a company so
as Volkswagen's. These entities are the crucial part of an organisation as it affect the activities
and amount of funds or profitability of a company. The method of stakeholder analysis helps
in identifying the interests and values of those in context of activities of business (McGrath,
2013).
Value of Stake holders
 Provide significant ideas about activity in the business.
 Render powerful organisation support to company.
 Assist in identifying and finalising the interest and nature of people of enterprise.
 Get and analyse the response of people in regard of various activities.
Below, the procedure of evaluation of Stakeholder is mentioned in step by step:
Step 1: On the initial stage of stakeholder analysis, the manager of Volkswagen identify
those entities who are engaged with the company activities in direct and indirect ways. This
includes employees, shareholders, state, investors and other people.

Step 2: The manager have to identify the power as well as their interest in the activities of
organisation. The company have eliminated those stakeholders in the list according to these
parameters in order to identify their participation in a Volkswagen practices (Hoejmose,
Brammer and Millington, 2013).
 People with high power & high interest that impact on the activities greatly through
providing their best performance. Stakeholder who have high power and high interest,
they will give their best effort in performance. It is useful for the business activities.
 Those who have great impact but dozed off from work. These includes less interested
with high powerful stakeholders.
 Those who have essential impact on the company involve people with high interest as
well as low power. These are helpful stakeholders of enterprise.
 Those who impact lesser on the company activities including less interested and less
powerful people of companies. On them the company make lesser efforts.
Step 3: The lasts step of stakeholder analysis is to evolve the the interaction and
communication among all those stakeholders by the manager of Volkswagen. This is
assisting in supporting company activities as well as understanding responses of them
(Johanson and Vahlne, 2011).
2.4 New strategy for organisation
In order to form or present a fresh strategy for the business, first of all, the company
should determine the goals, mission, vision and objectives of the organisation along with
target market and tactics.
Goals
The main aim of the company is to render the best and effective services of
automobiles in order to increase the sales as well as sustainability of enterprise among the
competitors.
Objectives
 To form a unique and largest image of brand in the automation industry (Grönroos,
and Ravald, 2011).
 Increment the base of potential buyers of organisation to raise the sales quantity.

 To evolve and emerge the products quality and manufacture healthy and nature
friendly commodifies.
Strategy
The company have developed “Together -2025” plan for the present and future
growth and development of company to become the most leading enterprise and gain more
sales of services and goods.
Tactics
Volkswagen can use of various effective tools of media or promotion mix consisting
hoardings, flyers, interests, online ads and many other (Cullingford and Blewitt, 2013).
Through the proper planning of marketing and promotion, the message of cited firm can
easily conveyed to their buyers and target public.
Positioning
Positioning of an organisation refer to the place of company in the perceptions of
consumers. After the emission scandal, Volkswagen have lost the effective image of
company in sight of customers. To get they back, company require to evolve their
technologies and consumer base by taking the harm of nature under the consideration. It can
work on new inventions or innovative ideas as well.
Target Market
The target market are the focused people of the company which they desire to
purchase the products and services of the organisation. The features and elements are done on
the interest and preferences basis of them (Cavusgil and et. al., 2014). Volkswagen have
distinguished their consumer on geographic, demographic and psychographic segments: Psycho-graphic- Clients are eliminated based on the annual income and behaviour of
their lifestyle. The company aim to middle as well as higher class people. Demographic- Firm distinct the consumer according to their demographic basis such
as Volkswagen goal to families and entrepreneurs etc.
 Geographic – Enterprise segment the clients on the place or geographic base such as
deploying business out of UK and other countries of world in which the company
hasn't reached yet.

 Company distinguish the consumer according to the geographic area. In this company
is plan to expand their market to most of the countries of world.
TASK 3
3.1 Alternative strategy's effectiveness
This is a significant factor of a company that is needed for the effective administrate
functioning and performance of a company. After the scandal situation and entry of
competitive market, it is necessary for Volkswagen to develop and modify the strategies
effectiveness in industry. These are discussed as followed:
 Retrenchment
 Substantive growth
 Market Entry
Substantive Growth strategy
The planning of substantive development strategy is more essential for an
organization in order to maintain the evolution of Volkswagen in the industry. For this, the
company conduct the strategies of integration & diversification. The company can set the
pattern of cost in horizontal or vertical integration pricing. To make increment in sales and
profits of goods, firm can manager the provider who are cheaper to control the expenses and
prices.
Retrenchment
This process helps in trimming not significant expenses of an organization.
Volkswagen can manage their expenditure through using turnaround, divestment and
liquidation techniques that are used for loss in credit pay, amount of loan pay as well as
interests (Carney and et. al., 2011). The best and most effective plan for the cited company
would be Liquidation strategy.
Strategy for Market Entry
With the assistance of franchisee, joint venture and company consolidation method,
the company can easily enter in new market and deploy its business. Such techniques can
help in foster and emergence the enterprise in market and manage the funds for the company
by gathering funds.

3.2 Justifying chosen strategies
After the scandal of emission in 2009, UK environment protection agency claimed
that the company itself is responsible for the scam (Campbell, Edgar and Stonehouse, 2011).
To develop in industry and gain the credibility again, it is essential for the enterprise to
develop an effective strategy for them to gain trust again and relaunch the company with
better image. 'Together-2025' is very effective strategy that can help it in rising again among
competitors because: Workable – It is very workable and practicable strategy which can conveniently
applied on various framework lead the operation toward success. Sustainable – This is able to have the acknowledgement of clients, it assist the
company in refraining in the industry and growing the basics of it.
 Satisfactory – Stakeholders and clients of enterprise are feeling more comfy and
better after this plan and acknowledging its outcome which have come yet.
TASK 4
4.1 Roles and responsibilities of personnel in implementing strategy
The implementation of strategy can only be done by organise and coordinating proper
management of personnel at various levels (Boons and Lüdeke-Freund, 2013). Here are the
duties and responsibilities of the personnel of Volkswagen mentioned as below: Upper level management – The higher authorities of cited organisation who are
responsible for the blueprint of planning which is needed for the execution. They
administrate the entire strategies by operating various functions which can help in
meeting the goals and objectives. It is their responsibilities to maintain and manage
the flow of communication as well as interact the message of company to the entire
personnel. Mid level - Mid level personnel are essential while it comes to managing the relation
with the employee and peer to communicate the message of high level personnel with
them. It is being managed by documenting the routine structure of them and providing
them target to achieve. These administrate the framework of different departments
and bodies of a company.

 Worker/ employee – Employee of company occupy the major part of enterprise which
aid a vital role in attempting the strategies implementation as well as proper
organising of business activity (Blackburn, Hart and Wainwright, 2013). The helps in
maximising the result through meeting the everyday target allotted by the mid level
personnel of Volkswagen.
4.2 Analysing resource estimation for new strategy
To bring out the essential elements of function and operations of a business and
implication of planned strategies, enterprise like Volkswagen would require some resource in
order to proper implementation of designed strategy as well as maximising the effect through
balanced use of them (Volkswagen’s Emissions Scandal: Lessons for Corporate Governance?
(Part 1), 2016.). Here are few important resource are discussed: Human resources – This is the most important resource which is required for
implication of any strategy in Volkswagen more efficiently. The company play a vital
role in planning the design of performance and operations. It will need the skills and
qualities in order to manage and maintain the functions of it. Time and raw materials – Proper timing can lead anyone toward the success and
wrong timing can make them face failure on the same strategy. Managing the
schedule of time is sentential which is helpful for the company in regard to exception
of plan. Also the Volkswagen will be needing the required elements or raw material
for the manufacturing of better products and services. Financial resources – Funds and financial support is necessary as much as the fuel in
a car; one can make the whole effective structure, but it will ignite only when it would
be fuelled. For the implementation of strategies for effectively, the company will
require more funds and sponsor for the plan (Birkinshaw, Brannen and Tung, 2011).
 Other Resources
1. Marketing Resources
2. Technical Resources
3. Proposal and other Resources etc.

4.3 Evaluating SMART target's contribution
The technique of SMART goals is very helpful as it aid the company in planning and
implementing the strategy through complying each step more appropriately measuring the
probable results. Here are the following method in context of Volkswagen company which
can aid them in sustaining in market after the Emission Scandal 2009:
Source 1: S.M.A.R.T. Goals Settings, 2016
Specific- S means Specific aims and objectives that is determined by a company that
help in understanding and managing the entire process more appropriately. This helps in
reducing the issues and conflicts while designing any plans leading Volkswagen toward the
success. The company had faced in 40% fall in sales of company which they aim to increase
through this new strategy.
Measurable – M state the either the set goals and objectives are scalable or not. This
strategy is more helpful the result is entirely measurable with the use of effective “Together
2025” plan (Ackermann and Audretsch. eds., 2013).
Attainable – This refer to the possibility of achieving the gaols and objectives that
have been set by the company. The company is improving their production and functional
system to produce more environment friendly products which can assist company in gaining
sales.
Relevant – R refer to the the relevancy of set aims and objectives which they goal to
meet. There are more probability for the company to achieve the desired goals with the the
help of effective strategy implication.

Time – T is stated for the period of time in which the company can achieve the goals
and objectives that have been set. Volkswagen would need some time to meet the consumer
credibility again after the scandal. It will minimum took 1-3 years for accomplishing the
aims.
CONCLUSION
From the above mentioned report, it has been concluded that managers needs to create
effective business strategies and policies so as to gain high competitive advantages. It is
assistive in gaining goals and objectives of the company in a certain time period. Apart from
this, the report is described vision, mission and competencies of the firm while preparing
strategic plans and policies. Organisational audit and environment audit is conducted through
SWOT and PESTLE so as to examine external forces which will put a huge impact on
company's market position. Along with this, SMART targets are created to as to gain high
market growth.

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Online
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