Business Strategy and PESTLE & SWOT Analyses

The provided content consists of several academic articles and online resources that discuss the relationship between business strategy and socially responsible supply chain management, the influence of business strategy on project portfolio management and its success, digital business strategy and value creation, environmental uncertainty and performance in SMEs, measuring the information systems-business strategy relationship, corporate social responsibility and the environment, taxes and business strategy, marketing organization culture and performance, SWOT analysis and PESTLE analysis. The articles highlight the importance of aligning business strategy with socially responsible supply chain management, project portfolio management, digital business strategy, environmental uncertainty, and other factors to achieve success.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Asses how business objectives and core competencies inform strategic planning when
formulating strategic plans.....................................................................................................1
1.2 Factors that have to be considered when formulating strategic plan................................2
1.3 Evaluate the effectiveness of techniques used when developing strategic business plans3
TASK 2 ...........................................................................................................................................4
2.1 Analyse the strategic positioning of VW AG by carrying out an organizational audit....4
2.2 Environment audit for VW AG........................................................................................5
2.3 Assess the significance of stakeholder analysis...............................................................6
2.4 Present a new strategy for VW AG..................................................................................7
TASK 3 ...........................................................................................................................................7
3.1 Analyse the appropriateness of alternative strategies related to market entry, substantive
growth, limited growth and retrenchment..............................................................................7
3.2 Justify the selection of a strategy......................................................................................8
TASK 4 ........................................................................................................................................8
4.1 Assess the roles and responsibilities of personnel who are charged with strategy
implementation.......................................................................................................................8
4.2 Analyse the estimated resources requirements for implementing a new strategy for VW
AG..........................................................................................................................................9
4.3 Evaluate the contribution of SMART targets to the achievement of strategy
implementation.....................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................12

INTRODUCTION
Business strategies are related to practices which are performed by the organization to
fulfil their objectives. Through these strategies, the firm will be able to accomplish their long
term goals that will lead towards the success. Through these strategies, companies will be able to
sustain their competitive advantage and along with this they can improve their financial growth
in the market (Scholes, 2015). Resources are important asset of the enterprise such as
employees, brand value, suppliers. Companies should follow strategies to manage all the
activities so that they can expand their business at the global level. The present report is based on
Volkswagen which performs their operations in the automotive industry. The below mentioned
report is based on business strategy which explains the process of strategic planning and what
kind of techniques are used by the firm to develop the plan. Along with this, it also focuses on
different types of approaches used by the entity to evaluate the strategies. Further, it emphasizes
on the SMART objectives can help the firm in implementing the strategic plans.
TASK 1
1.1 Asses how business objectives and core competencies inform strategic planning when
formulating strategic plans
Volkswagen is the automotive industry and they are planning to expand their business in
some countries of United Kingdom so that they can create a strong base of the customers. When
the company makes a plan to implement their strategy then they focuses on the mission, vision,
objectives, goals and their core competencies so that the plan can be implemented in an effective
manner (Teece, 2010). The business plan can be presented to the Dragon den which is a TV
show. Through this, the enterprise will be able to get an opportunity to attract number of
investors. Mission: This is a kind of statement which is made by the business organization and this
shows their goals and targets. Along with this, it describes their purpose that why they
establish their business and how they will achieve their vision (Godwin, Kalapana and
Valli, 2013). For example, the mission statement of Volkswagen is to make long term
strategies to improve their relations with the customers and provide them with quality
services.

 Vision: This depicts the future of the company that what they want and where they will
operate. This also identifies the potential benefits and growth of the company. For
example, the vision statement of Volkswagen is to make the company more innovative
and offer services throughout the world. Goal and objectives: Organization set some objectives and goals to improve their growth
and position in the market. Objectives are short term and goals are long term. Here, the
goal of the company is to expand the business in United Kingdom and attract more
customers throughout the world. The objectives are to offer quality services to the
customers so that their level of satisfaction can be increased.
 Core competencies: These are related to skills and special qualities of the business
organization so that they can achieve competitive advantage in the market. Some of the
core competencies of Volkswagen are distribution, manufacturing process and so on.
Through these they will be able to get success (What Is a Business Strategy?. 2017).
1.2 Factors that have to be considered when formulating strategic plan
At the time of developing their plan then there are many factors which may affect
strategic planning of the company (Bharadwaj and et.al., 2013). Strategic planning is a process
that is used by Volkswagen to improve their growth. Some of the factors are as follows:
Internal factors: These factors are related to the policies, culture and strategies of the
organization. When the firm develop their plan then they should focus on these factors so that
plan can be made in an efficient manner. Along with this, plan should be based on the values and
beliefs of Volkswagen.
External factors: These are also known as the macro factors which are not in control of
the organization. Some of the external factors are political, economical, social, technological,
competitors and so on (Srdjevic, Bajcetic and Srdjevic, 2012). These are:
 Political factors are related to laws and policies that are made by the state government of
the country. The manager has to make plan on the basis of rules and regulations so that
overall performance can be improved.
 Economical factors are related to wealth of the country and this will also affect business
operations of the firm due to unemployment, interest rate and so on.
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 Social factors are focused on taste and interest of the consumers. So, when the plan is
made by the manager of Volkswagen they should made the products as per the demand
and need of the customers so they will be able to increase their profits.
 Technological field is related to innovation in the services that they offer to their
customers. New ideas should be incorporated by the enterprise so that they can attract
number of customers towards their services.
 Competitors are the rival firm which can affect strategic plan of the enterprise.
Volkswagen should know about policies and strategies of other market player then only
they can sustain their competitive advantage.
1.3 Evaluate the effectiveness of techniques used when developing strategic business plans
The manager of Volkswagen uses many techniques to develop strategic business plan so
that they can expand their business in United Kingdom (Meskendahl, 2010). Some of the
techniques are:
SWOT analysis: SWOT stand for strength, weaknesses, opportunities and threat.
Through this model, Volkswagen will be able to identify their internal and external factors so
that the strategic plan can be made successful (Slater, Olson and Finnegan, 2011). Through this,
they will be able to identify opportunities which help in achieving competitive advantage. In
order to achieve this, they can use their strength and can overcome all their weaknesses. This is
an effective technique that is used by the enterprise so that they can expand their business in
London in an efficient manner. The advantage of this approach is that through this, the
companies brand image can be improved. Along with this, they can make their plans to remove
all the threats and weaknesses (What Is a SWOT Analysis?. 2017).
Porter five force model: This is another tool that is used by the organization to identify
the factors which can affect strategic plans of the company. This model is based on some
elements such as bargainingpower of buyer and bargaining power of supplier , threat from new
entrant, threat from substitute and inter firm rivalry. The advantage of this approach is that
through this they will be able to identify their status in the market. It also helps automotive
industry in identifying the bargaining power of suppliers and buyers, threat from new businesses
and threat from the competitors.
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TASK 2
2.1 Analyse the strategic positioning of VW AG by carrying out an organizational audit
Organizational audit is used by strategic planner manager of New Phoenix so that they
will be able to analyse position of VW AG in the market. The audit can be conducted for
automotive industry by using SWOT model which stands for strength, weaknesses, opportunities
and threats (Woodcock, Green and Starkey, 2011). Through this, he can identify their internal
strength and weaknesses as well as external opportunities and threats.
Strength: These are the characteristics of the business organization and on the basis of
these they will be able to gain benefits than any other market player.
 The company have a good brand image in the market than any other automotive industry.
 Volkswagen is the owner of many big car manufacturing industries so they have large
customer base.
 They have approx 350, 000 employees who offer quality services to their customers.
 The enterprise have joint ventures with the companies of china such as FAW
Volkswagen and Shanghai Volkswagen.
Weaknesses: These are the characteristics of the companies which can degrade their
performance. Some of the weaknesses are:
 There is higher competition among all the car manufacturing industries so the market
share of Volkswagen is low.
 Their global brand image is also get reduced due to the emission scandal.
Opportunities: These are related to the external factors through which they will be able to
gain the competitive advantage in the market.
 Volkswagen can create a relationship with the other car manufacturing industries.
 The enterprise can use the modern technological advancements so they will be able to
attract number of customers towards their innovative products.
 They can improve their global brand image by offering more innovative products in the
new market.
Threat: These are the elements that can degrade the performance of the company and
some of these factors are:
 Competitors can also use innovative strategies in order to attract customers towards their
services so this will affect the market share of Volkswagen .
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 If the prices of fuel is get increased then due to this purchase of car get reduced.
2.2 Environment audit for VW AG
Environment audit is a tool that is used by the organization so that they will be able to
identify their position in the market (Parnell, J.A. And et.al., 2012). Through this, the strategic
planner will be able to analyse the external factors that may affect the strategies of Volkswagen.
For this, PESTLE model can be used and this is stands for political, economical, social,
technological, legal and environment. These are:
Political: These factors are related to the trade barriers, tax policies, environmental laws
and so on. For example, Volkswagen offer their services in approx 150 countries so they are
facing some political issues in its development. They make their strategies according to the
political situation of the countries because different places have their different political situation.
Economical: These factors are related to the income, unemployment, interest rate of a
particular country. For example, car manufacturing industry contribute in the nation income of
the country. Economic debt crisis degrade the performance of the enterprise because when
people don't have to money then they will not purchase the car (Montgomery, 2011).
Social: The automotive industry changes the living of the standard of the people who are
living a country. Volkswagen give employment to the number of people so due to this
employment rate is also get increased in the country. Along with this, the consumers are
purchasing the car in order to maintain their societal status.
Technological: Technological advancements play an important role in the success of
Volkswagen. They are providing many high tech cars such as Audi and Bentley. The sales of the
car manufacturing industry is also get increased due to their innovative products.
Legal: This is a challenge for Volkswagen to follow all the legal laws that are made by
the state government as they are offering their services within 150 countries. Some of these
regulations are related to the consumers protection act, health and safety law and so on.
Environment: Car manufacturing industries affect the environment of the country as they
are using diesel and petrol as a fuel. Volkswagen has many manufacturing plants in the different
countries so due to these air pollution is get increased (Reich and Benbasat, 2013). They have to
take care of the environment of the nation so that health of the people can be ensured.
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2.3 Assess the significance of stakeholder analysis
Stakeholder analysis can be used by the strategic planner of New Phoenix. Through this,
he will be able to identify the role of stakeholder in decision making process (Verbeke, 2013). It
is a systematic process that involve some steps such as:
In the first step, strategic planner will be able to identify the people who are involved in
the business activities of Volkswagen and who get affect due to the operations of the enterprise.
In the second step, he has to identify the needs and interest of the different stakeholders.
For this, he can use stakeholder mapping. People with high power and high interest are closely
associated with the company and they also promote the services of automotive industry. On the
another hand, people with low power and low interest are not influenced by the business
operations of the firm.
(Stakeholder Mapping, 2017)
In the last step of stakeholder analysis, company develop a good understanding with the
stakeholder of the firm. The industry can also take the feedback from them so that overall
performance can be improved.
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Illustration 1: Stakeholder Mapping, 2017

Through the stakeholder analysis, the firm will be able to identify the contribution of the
people in the decision making process. Along with this, the core competencies of the workers
can be identified.
2.4 Present a new strategy for VW AG
VW AG can offer their products in the new market in order to attract number of
customers towards their services (Cinquini and Tenucci, 2010). Volkswagen can follow market
development and product development strategies. In the first strategy, the automotive industry
can offer their current products in the new market such as London. Through this, they will be
able to improve their growth in the country than any other market leader. In the another strategy,
the firm can offer new products in the existing market in order to convert the regular customer
into loyal consumer.
Volkswagen can use porter generic strategy in order to develop the new products in the
market. The porter generic strategy focuses on the cost, differentiation and focus. In the first
strategy, they are focused on the cost of their products through this they will be able to achieve
the cost leadership in the market (Hoejmose, Brammer and Millington, 2013). In the
differentiation approach, the firm focuses on the unique features so that they will be able to
attract loyal customers towards their services. On the basis of focus strategy, they are focuses on
the people who are price sensitive but looking for unique products. So, the VW AG should
follow differentiation strategy because through this they will be able to generate more revenues.
TASK 3
3.1 Analyse the appropriateness of alternative strategies related to market entry, substantive
growth, limited growth and retrenchment
Volkswagen can use alternative strategies in order to improve their brand image and
growth in the market. These strategies are:
Market entry: This is an effective strategy that is used by the organization in order to
develop their services in another market (Pagani, 2013). Through this strategy, the firm will be
able to increase their market share. Some of the market entry strategies are merger, acquisition,
joint ventures, strategic alliances, licensing and franchising.
Substantive growth: This is a strategy that is used by the organization so that they can
attract number of customers towards their services. Through this, they will be able to improve
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their growth in an effective manner. For this, the car manufacturing industry can use
diversification, vertical and horizontal integration. VM AG can offer their new products into the
new market.
Limited growth: These strategies can be used by the business organization and through
this they can resolve all the issues and can handle adverse situations (Boyer, J. and et.al., 2010.).
These can be performed when companies are facing financial loss and when they will not be able
to increase their profits. Some of the strategies that are performance by Volkswagen are market
penetration, market development and product development.
Retrenchment: This strategy can be used by the organization when they are not be able
to increase their market share. Here, they can use some of the strategies such as divestment,
liquidation and turnaround. Along with this, they will be able to manage their resources and offer
services to the people in order to increase the satisfaction among all the customers.
3.2 Justify the selection of a strategy
The main aim of Volkswagen is to expand the business in some countries of UK such as
London so that they can increase their share and brand image. In order to expand their business
they can use market development strategy (Connor and Lande, 2012). In this strategy, the car
manufacturing industry can offer their current products into the existing market. They will be
able to attract new customers towards their services and along with this they can build a strong
base of service users. VG AG can use strategic alliances and joint ventures in order to enter into
the new market. Through this they will be able to generate more revenues so that overall
performance can be improved. After that they can use product development in order to
differentiate their services from other car manufacturing industries. Further, they will be able to
attract the loyal people towards their goods (What is Business Strategy?. 2017).
TASK 4
4.1 Assess the roles and responsibilities of personnel who are charged with strategy
implementation
When an organization implement a strategy then they need a personnel who can help the
firm in improving their growth . It is the responsibility of the person who can divide the work
among all the people as per their role and level in the enterprise (Burlton, 2010). The major roles
of the personnel are:
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 It is the responsibility of the person to communicate all the strategies in the department so
that they can achieve their specified goals.
 The person should know about the aim behind all the strategies so that he can easily
convince the workers that what they have to do.
 It is the responsibility of the personnel to improve the relations among all the people so
that trust can be build among them and overall performance can be improved.
 He has to involve number of people in the process of strategic implementation so that all
employees will be able to enhance their core competencies and through this
communication gap among all the staff members can be reduced.
 The distribution and allocation of the resources should be proper so that Volkswagen will
be able to generate revenues in an efficient manner.
 He has to monitor the process of strategic implementation on a continuous basis so that
the firm will be able to achieve their objectives in order to get success. Along with this,
he should know that what is going to next and how these strategies can be implemented
so that future goals can be achieved.
 He has to identify that how strategies are implemented by the employees in an efficient
manner or not so that overall performance can be improved.
4.2 Analyse the estimated resources requirements for implementing a new strategy for VW AG
When strategies are implemented by the organization then in order to implement those
strategies they need some resources such as human, financial, raw material and technological.
The enterprise will not be able to implement the strategies in an efficient manner without these
resources. Some of these are:
Human resources: Employees are an important asset of the business organization. The
firm have to retain their employees so that they can improve their performance and enhance their
growth so that profits can be increased (Reinhardt and Stavins, 2010). All the human resources
should be innovative or creative. It is the responsibility of the manager to to provide training and
development to the staff members so that they will be able to offer quality services to the
customers.
Financial resources: These resources are necessary in order to make the strategy
effective so that they can improve their growth. Through these, company will be able to buy the
raw material and pay the wages to their employees so that overall performance can be improved.
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Raw material: In order to manufacture the car, the company have to use some raw
materials so that an effective product can be made (Hsieh and Chen, 2011). Along with this, they
have to purchase the high quality material so that the luxury product can be made. Through the
innovative and luxury services the enterprise will be able to attract number of people towards
their services.
4.3 Evaluate the contribution of SMART targets to the achievement of strategy implementation
Volkswagen can use the SMART targets in order to set the objectives so that all
objectives can be achieved in an efficient manner (Verreynne and Meyer, 2010). SMART
objectives are stands for specific, measurable, achievable, realistic and time bound. These are:
 Specific targets are related to the objectives such as to increase the market share and
profits of Volkswagen. For example, the car manufacturing company can set the goal as
to increase the market share by 5%.
 Measurable targets are related to the numeric terms and these should have some meaning
so that in efficient manner the objectives can be achieved.
 All the goals should be attainable so organisation should set the targets as per their
capability so that expected results can be achieved.
 Realistic means all the objectives should be reasonable and result oriented so that their
overall performance can be improved.
 The last time bound is related to the time that all the objectives and goals should be
accomplished on time and given deadline. The organisation can revise their objectives
after some time so that they can sustain their competitive advantage in the market.
CONCLUSION
From the above mentioned report it has been concluded that business strategy can be
made by the organization so that they can accomplish their objectives. All the strategies should
be made on the basis of the vision and mission of the company. The firm can use swot and
porter five force model in order to evaluate the effective of the strategic plan. Along with this,
organizational and environmental audit can be conducted by the strategic planner so that an
effective plan can be made. Along with this, the enterprise can use different approaches such as
retrenchment, limited growth and so on. Further, some of the resources such as human, raw
material, financial are used by the Volkswagen so that overall performance can be improved.
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REFERENCES
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Boyer, J., Frank, B., Green, B., Harris, T. and Van De Vanter, K., 2010. Business Intelligence
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Hoejmose, S., Brammer, S. and Millington, A., 2013. An empirical examination of the
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Hsieh, Y.H. and Chen, H.M., 2011. Strategic fit among business competitive strategy, human
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Parnell, J.A., Lester, D.L., Long, Z. and Köseoglu, M.A., 2012. How environmental uncertainty
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What Is a Business Strategy?. 2017. [Online]. Available
through:<http://pestleanalysis.com/what-is-a-business-strategy/>. [Accessed on 6th
March 2017].
What Is a SWOT Analysis?. 2017. [Online]. Available through:<http://articles.bplans.com/how-
to-perform-swot-analysis/>. [Accessed on 6th March 2017].
What is Business Strategy?. 2017. [Online]. 2017. Available through:<http://www.strategy-
keys.com/what-is-business-strategy.html>. [Accessed on 6th March 2017].
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