Business Strategy

This presentation discusses the importance of strategic planning in business organizations and explores the concepts of business missions, visions, objectives, goals, and core competencies. It also examines the factors that need to be considered when formulating strategic plans and evaluates the effectiveness of techniques used in developing strategic business plans. The presentation provides insights into the industry and global factors that can influence strategic planning and offers a case study on Volkswagen.

BUSINESS STRATEGY

INTRODUCTION
 Strategic planning is an organisational management
activity which is used to set priorities, resources,
strengthen operations, ensure all stakeholders are
working together to attain a common goal. It is efforts
from the higher authorities to provide a right direction
to a business organisation.

TASK 1

1.1 Business missions, visions, objectives,
goals and core competencies inform
strategic planning
 It is essential for a business organisation that to plan their goals and objectives in
advance and make its strategies accordingly.
 Each company having their own mission, vision, objectives and core competencies so
that they make its strategic plan effectively. There are mission, vision, goals &
objectives and core competencies of Volkswagen.

Mission
 A mission is the desire which a business unit wants to
attain in the future. It can help to determine their
stakeholders and its potential products and its quality.
Per the case there are mission statement of Volkswagen
“The Group's goal is to offer attractive, safe and
environmentally sound vehicles which can compete in
an increasingly though market and set world standards
in their respective class”.

Vision
 The vision statement is another significant for each
company. It is related with the outlook of the business
organisation so that they can provide consistent growth
in the near future. Volkswagen wants to be a valuable
brand in different segment and provide a high-quality
product to its customer

Objectives
 The goals and objectives are those targets which having
a specific time frame. These goals and objectives can be
short term and long term. The long-term goals of
Volkswagen are to provide technologically advanced car
which is also environment friendly for the company

Core competencies
 This is one of the key aspects for each business unit.
Because it can provide a competitive advantage over
rival companies. The core competencies of Volkswagen
can be its performance and the growing success of
economies of scale from its extensive brand portfolio

1.2 The factors that have to be considered
when formulating strategic plans
 Strategic planning is required for each and every level
of business unit. It is related with the effective decision
making regarding firm's resources and its allocation and
implementation. Therefore, Volkswagen is more focused
on their strategic planning and marketing strategies to
attain its long-term goals and objectives. There are
various factors which can influenced strategic plan and
adverse impact on the firm’s growth. These factors can
be:
 Industry factors

Industry factors
 These factors are related with the industry. In the context of Volkswagen,
vehicle manufacturing sectors is one of the complex and competitive sectors. It
can involve market size, potential growth, new markets, profitability and
future threats.
 UK market is having good growth in this sector but there are various large
number of companies can increase the competition level which can leads to
decrease its market share.
 To maintain their market share and revenue Volkswagen can approach for new
markets.
 There are various emerging markets specially in Southeast Asia can provide a
huge market which can help to increase their profitability.

Global factors
 This is another major factor which is related with the global environment of
the business. Fuel prices is one of the major factor in the vehicle
manufacturing. But in the last few years there are ups and down in the fuel
prices which can having a significant impact on the demand of their products.
 Another major issues is that there are various oil producer countries specially
in the middle East is political unrest and war. It can also slowdown the growth
in the demand side of their products.
 Therefore, Volkswagen required that to study all these factors carefully at the
time of strategic planning so that they can attain its targets effectively.

1.3 the effectiveness of techniques used
when developing strategic business plans
 Strategic planning is a challenging and competitive task for a company which
required appropriate tools and methods in such planning. There are various
tools methods which can be used by Volkswagen to attain their targets. These
tools can help to formulating their strategic plan more effectively. Porters-five-
forces-analysis can help to strategic planning which is given below:
 This model is one of the suitable approach for Volkswagen to design
and developing strategic plan. In this model, there are five key factors which
must be considered by the cited company.

Continue…

Threats of new entry
 This is one of the major elements in this model. This
factors is related with the new entry in the car
manufacturing.
 This is less effective for Volkswagen because it required
huge capital and research and development which is not
possible for a new company.

Competitive rivalry
 This is one of the key factors which having a great
influenced on the Volkswagen business operations.
 There are various competitors such as General Motors,
Ford, Tata Motors etc. which can have influenced their
profitability.

Substitute products
 This is another aspect which can overcome the demand
of their products.
 In the present time, UK is trying to promote public
transportation and electric vehicle which can leads to
decrease the demand of their products.

Bargaining power of buyer
 If there are large number of seller in the market it can
increase the bargaining power of customers.
 It can increase pressure on the cited company to cut
down their products price which can leads to reducing
profitability

Bargaining power of suppliers
 There are various suppliers such as row materials,
different components in the market.
 If these suppliers are limited it can increase the
bargaining power which is not good for the company.

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