Business Strategy and Performance Analysis

The assignment is a compilation of research papers and articles on business strategy and performance. It includes studies on the impact of small business institute participation on entrepreneurial attitudes, transition to the embedded librarian model, and analysis of Volkswagen's SWOT analysis. The assignment also covers topics such as digital transformation strategies, service failures and financial performance, and innovation strategies. It provides a comprehensive understanding of business strategy and performance analysis for students.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Organisational Audit of Volkswagen...............................................................................1
2.2 Environmental Audit of Volkswagen...............................................................................2
2.3 Importance of Stakeholder Analysis................................................................................3
2.4 New strategy for Volkswagen..........................................................................................4
M3...........................................................................................................................................5
TASK 3............................................................................................................................................6
3.1 Analysis of appropriate strategies....................................................................................6
3.2 Justification of selecting a strategy...................................................................................7
TASK 4 ...........................................................................................................................................8
4.1 Roles and Responsibilities ...............................................................................................8
4.2 Analysing the Resource Requirements.............................................................................8
4.3 Contribution of SMART targets.......................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is an important part of any organisation. It helps the business to attain
its goals and objectives in a systematic and effectual way. It basically means a plan which is
made by top level management of companies and implemented by the middle level managers
under guidance of higher level managers. The company referred here is Volkswagen which is an
Auto mobile company from Germany. This report will analyse the strategic positioning of the
given company and an environment audit of the company will also be covered in this report. The
importance of stake holders analysis and a new strategy will also be prepared for then company.
It will also cover the approaches which are use for the strategies evaluation and how a chosen
strategies is implemented is also covered in this.
TASK 1
Covered in PPT
TASK 2
2.1 Organisational Audit of Volkswagen
In order to conduct the organisational audit of VOLKSWAGEN, it is necessary for the
company to evaluate its core strengths and weaknesses so that correct situation of company is
known to the management (Aitken, 2016). The correct way to conduct the organisational audit is
to do SWOT analysis of the company. It will help in knowing the strategic positioning of the
company in the market. It is very essential for the company to acknowledge its positioning in the
market. It will help them in realising their strengths and weakness. It will help them in
becomoing a superior performer in the market. Volkswagen is an automotive company that is
successfully selling its various brands like Bently, Bugatti, Audi , Porsche etc. they are operating
in more than 150 countries and they are having their two major ventures in china as well.
The SWOT analysis of VOLKSAWAGEN is described below:-
STRENGTH WEAKNESS
 Among all the automotive company
the brand portfolio of Volkswagen is
the widest.
 They are a follower of diversification
 Weak in customer satisfaction part and
it needs to be improved to achieve
customer loyalty.
 The market position in North America
1

strategy which means that the company
is trying their hand in every other
business also (Brush and et. al).
 The joint ventures done with the local
Chinese auto makers are a big support
for the company because company gets
help from them whenever they require
any.
is not satisfactory which needs to be
improved.
 The market coverage in the whole
market is to increased and for that
market shares in major market segment
needs to be improved.
 Needs improvement in its price and
revenue segment also
OPORTUNITIES THREATS
 It is having good market position in
China, Argentina, south Africa and
Brazil which helps them in developing
the market in Asia.
 The dealer network is of high
integration which helps the company in
increasing its efficiency.
 The brand is considered superior in he
car market which helps the company in
expanding the product program and to
enter new segments in the market.
 Maybe VOLKSAWAGEN is a superior
brand but it also faces threats with other
brands present in the market namely
Skoda, Honda etc.
 Increasing government regulations
creates a problem for the company in
conducting the operation of the
company (Carraher and Paridon,
2015).
 The damages that will happen in future
will have to be paid by the company
itself if it is related to the production
then only.
Besides this, porter's generic model is also used by VOLKSAWAGEN for gaining high
competitive advantage in market by providing greater and valuable products to the customers.
The detailed analysis of this strategy can be explained as:-
 Cost leadership – Their main aim is to produce low cost products so that more customers
are attracted towards the company. It is new of the traditional methods of ascertaining
cost.
2

 Cost focus - VOLKSAWAGEN can reduce the prices of their products but only in small
market segment. It is because these products have the capacity to increase sales as well as
profits of the company.
 Differentiation focus – This is an important part of the company as it is essential for the
company to differentiate their products from other products present in the market.
 Differentiation leadership - The business strategy refers to select one or more criteria for
buyers in target market.
2.2 Environmental Audit of Volkswagen
There are various factors in the environment which affect the decision making process of
the companies. These environment can be Micro or Macro. In a auto mobile industry, macro
environment plays a significant role which includes political, economic, social, technological and
legal factor (Chang, 2016). These are called as PESTLE analysis. The conducting the
environmental audit, its pestle analysis needs to be conducted which is as follows:-
 Political Factors:- Company is serving in different countries therefore they are facing
different political situations of different countries. Volkswagen has to make its strategies
according to the political conditions of the company. The strategies must be planned
very carefully because all the industries like banking industry, government, finance sector
are very much affected by these car industries.
 Economic Factors:- Volkswagen being a superior brand helps the countries in Increasing
their GDP and this is the main reason that economics of different countries are helping
the auto mobile industries in development . Because of automotive industries, other
industries are also getting developed like steel industry , glass industries etc. which helps
in the development of the economy overall.
 Social Factors:- the automotive industries affects he society in a big way. It is the society
only for which the car industry is producing cars. Also, they are providing employment to
the people of society by giving them work in company.
 Technological Factors:- Technology acts as a success factor in the car manufacturing
company and Volkswagen uses the best technology for its customers . A good technology
is required for production of efficient cars like BMW etc.
3

 Legal Factors:- All then industries whether it is car or FMCG, everyone has to follow
the legal laws which are made by government. It is very difficult for Volkswagen to serve
in different countries and then following the laws of different countries as well.
2.3 Importance of Stakeholder Analysis
Stakeholders can be defined as an individual, group or a company who is involved in the
activities of organisation (Hanks, 2015). Stakeholder analysis is a technique that is used in
identification of people who are in support of the business. Its importance is given below:-
 Companies get necessary opinions from the stakeholders.
 Gets support from some powerful stakeholders.
 Able to estimate the reaction of people about liking the business or not.
 Understanding nature by making communication.
The main aim of conducting the stakeholder analysis is to bring cooperativeness among the
project team of the organisation and the stakeholders to bring out success from the organisation
(Harris and et. al). The stakeholder analysis of Volkswagen can be done as :-
 Step 1:- in the 1st step it is evaluated that who are the people who are getting effectedb by
the business operations of the business.
 Step 2:- here, analysis is conducted to check the power and influence of the stakeholders
and for analysing it they can use the BCG Matrix.
 Step 3:- This is the final step where a good understanding is being developed by the
company along with its stakeholder so that hey are able to get good feedback and support.
Therefore it can be said that stakeholder analysis is very much important for the
companies before making its strategic plans because through this analysis company gets to know
that whether public is even interested in the product or not. This helps the company in getting
saved from facing failure in the market (Helms Marilyn and Melissa Whitesell).
Stake holder mapping of Volkswagen is given below:-
High level of stake holder
interest
Low level of Stakeholder
interest
High level of stake holder
power
Know the key players in the
market
Keep the customers satisfied
4

Notice every activities of them
Low level of stake holder
power
Regular communication is
necessary to work smoothly
Here communication is done
only when necessary.
In Volkswagen, they keep the needs and expectations of stakeholders on priority as they
are very much important for the company. It helps the organisation in implementation the task
successfully . But it is not compulsory for all the stakeholders to involve in this process , it is
based on choice.
In Volkswagen, the needs and demands if the customers are considered as priority as they
feel that it is the main factor because of which the company can gain success in the marketplace.
Stakeholder analysis is very important in Volkswagen as they act like as support system while
the projects are implemented in the company. Here, few stakeholders takes active part in
executing the idea and some are not involved and this creates a difference It is recommended to
the management of the company to consult few experts before executing the project.
2.4 New strategy for Volkswagen
To create a strategy for Volkswagen, it is very important for the company to understand
its vision, mission, goals and objectives so that the purpose for which the strategy is being
created is accomplished. The details of strategy is given below:-
Objectives:-
 To increase sales in the given time period.
 To improve its quality of production
 To reduce it cost of production
Goal:-
 The goal of company is to cover the car market of the entire world and currently they are
serving to approx 153 countries in the world (Higgins and et. al). They have produced
successful brands like Audi, Bentley, Bugatti which will help them ion attaining the goals
very easily.
Strategies:-
5

 They have planned their target that till 2025, they have to become the leading auto
mobile company in the world.
Target market:-
The target market for auto mobile company is the young customers who are car lovers as
well (Hoejmose, Stephen Brammer and Andrew Millington). The target market can be classified
in various segments:-
 Psycho graphic- It is according to the income group and the standard of living of the
customers.
 Demographic:- This is as per the cast, gender, religion, age of the customers.
 Geographic:- It depends upon the types of city the customer is living and its structure
also.
Marketing Mix:- The marketing mix of Volkswagen is as follows:-
 Product:- new models should be introduced were there is demand of the products.
 Place:- To set up in the country where they feel that there are chances of growth and the
company doesn't face any legal problems in its operations.
 Price:- The prices of the products should be according to the area in which they are
serving.
 Promotion:- Companies should use various mediums to reach o0uit to its customers so
that more and more sale can be done.
M3
The case study presented in the report covers the following findings:-
 Volkswagen (VW) is having two of its major ventures in China as FAW
VOLKSAWAGEN and SHANGHAI VOLKSAWAGEN.
 US Environment Protection Agency had a complain that the company is having illegal
software to cheat the emission tests because their car is producing 40 times more
pollution to the environment (Ibrahim, 2015).
 They even said that each and every euro present in the organisation is helpful at this point
of this (Lawton, 2017).
 This scam spoilt the rand image of Volkswagen as their market capitalisation reduced by
40%.
6

 The CEO of Volkswagen announced an $86 billion five year investment plan to save
their planned investments .
There are different kinds of methods that are utilized by the company to develop their
business plan strategically. These method cater the the way of working. The techniques that is
used by VOLKSAWAGEN is the BCG matrix. It is very effective for the company as they are
perfect for them if they want to make a different place in the market.
TASK 3
3.1 Analysis of appropriate strategies
The detailed analysis of type of alternative strategies which is necessary for market
entry, substantive growth, limited growth, retrenchment are given below:-
1. Market entry strategies:
 Merger:- This happens when two or more organisations combine together and work as a
single company.
 Acquisition;- It happens when a company takes over another company entirely i.e. 100%
acquisition.
 Strategic alliance:- In this two or more business share their assets to complete their
objectives.
2. Substantive growth:-
 Related diversification:- when diversification is related to the product line thenitr is called
related diversification.
 Unrelated diversification:- when two companies who are of different gets involved at
same stage .
 Horizontal integration
 Vertical integration
3. Limited Growth:-
 Market penetration:- here, the existing market is penetrated by increasing the market
share of existing product or introducing new product in the market and this can be done
only by using specific strategies like discounts etc. (Lussier and Corman, 2015).
 Market development:- here the companies introduce the existing product or service in a
different market place .
7

 Product development:- It basically includes creating designing, ,marketing brand new
products as per the needs of the customers as it also help sin increasing revenues of the
company also.
4. Retrenchment:-
 Turnaround:- This technique is used to convert the underperforming company into a
profitable company by solving their financial problems and thus bringing improvement in
their performance.
 Liquidation:- This is used by the companies when they reach at the last stage of its life
cycle. Here, the company closes down its business and sell off its assets (Matt and et. al).
 Divestment:- here the business is being sold to another company.
3.2 Justification of selecting a strategy
As per the study done on Volkswagen, it is very clear that the strategy which is followed
by the company is very effective because the are getting the results of their plans and they are
achieving slowly and slowly what they have described in their vision statement. They said that
they have to rule in the entire world as they are ruling in 153 countries in the entire world and
many more (Moseley III, George BPeppard and Ward, 2016). They have successfully made the
brands like Bugatti, Lamborghini and many more. There are various strategies which are held in
appropriate manner, some are included below:-
 SUSTAINABLE:- Appropriate application of strategies help the organisation in
sustaining in the market for longer period of time. If the company is in developing mode
continuously, it creates a good image in the minds of the customers and a brand value is
created in the market.
 RELIABLE:- If the objectives of the company is continuously followed by the company
members then it becomes easy for the to achieve their goals and the customers will also
trust the company and they will be attached to it. These all depends upon the strategies
which will be implemented in the company therefore correct strategies must be applied in
the organisation.
 FLEXIBLE:- The products which are produced by the company should be so flexible
that they could be sold to any type of customers and the facilities that provided along
with the product must also be according to needs of the customers (Pisano, 2015).
8

The cited company needs to do more preparation so as to enter into new marketplace and
then targetting the customers. Company will choose their target customers earlier only i.e. while
planning so that the time in is not wasted further.
TASK 4
4.1 Roles and Responsibilities
The strategic implementation in an organisation needs an person who can lead the person
and have the ability to divide the work into other employees according to their level and role in
the organisation . The employees of Volkswagen who have been given he responsibility to
implement the strategies in the organisation must follow some responsibilities with them. To
implement a strategy successfully, the roles and responsibilities of each and every company
should be clearly defined (Ryu, and et. al). The top level management of Volkswagen is
responsible for communicating the strategies and the informations related to it to the employees
of the company. The CEO is also responsible to look and guide the strategic planning done in the
company. Proper record should be maintained by the person who is given the responsibility to
handle it. It is very important for the company as it helps in avoiding legal problems in the
company.
PERSONNEL ROLES AND RESPONSIBILITIES
Top management They are the ones who are are exclusively
accountable for devising new scheme and plans
so as to accomplish growth and improvement.
Senior authorities The organisation's intention is to make their
superior managers more trustworthy so that
they are able to help the top level management
in designing strategies .
Engineers personnel These are the people who help the company in
deciding which strategy is good for them and
which is not .
9

4.2 Analysing the Resource Requirements
There are three types of resource requirements which are helpful in implementing the
strategies:-
 Human Resources:- I order to successfully implement the strategies , Volkswagen will
require human resource with them because they need someone to manage the whole
organisation and successful implementation of strategies as well.
 Financial Resources:- Theses are required to implement the strategies successfully. If
the funds will not be there then how will the company function therefore it is very
important for companies to have sufficient financial resources with them.
 Time and Material Resources:- Specific time limit must be set by the companies in
order to complete the implementation of the strategies because it will help in growth of
the company as well (Wheelen and Hunger, 2017).
The company should decide in advance only that how much resources they will require
so as to formulate and implement the strategy effectively in the company and then further in
market. It will also include the discussion on funds. Along with this , there will also be a
discussion on the funds that is incoled by the management while making the strategies. So, it
can be assumed that company is using both physical and financial resources as they both are very
necessary for the company.
4.3 Contribution of SMART targets
The Importance of SMART targets in an organisation is given below:-
 The targets must be specific otherwise all the efforts that is applied on its implementation
will go waste,
 The targets must be measurable or else it will be difficult for the company to find the
loop holes if there are any,
 The targets should be not be imaginary as imaginative things can't be attained,
 The time limit must be set before starting the plans (Zott, Raphael Amit, and Lorenzo
Mas) .
SMART objectives include:
10

 Specific – organisation should aim to deliver only advanced quality goods in the market
and they should also take care of the environment as well
 Measurable - Here, the company should make sure that the goals which they are setting
is measurable as it will be measured in future.
 Attainable – The targets set by the company should be possible to attain and not be set
irrelevantly.
 Relevant - the goals and objectives should be relevant as per the visions and mission of
the institution .
 Time based – The time allotted to each activity should be adequate to finish it within
time.
Below mentioned some SMART targets of Volkswagen: -
 Market share will be increased by 20% till 2020.
 Broadening the number of customers by providing them qualitative products and
services.
 Serving customers requirements with having a strong portfolio.
 Fulfilment of corporate social responsibilities.
CONCLUSION
From this report, it is concluded that business strategy is very important for an
organisation and it is also very important to implement it effectively as it is required for proper
analysis of environment. Company which was referred here is Volkswagen, in this report its
strategic positioning is included which is carried out through an organisational audit, an
environmental audit is also conducted of the organisation. The importance of stakeholder
analysis while formulating strategies is also analysed here. The appropriateness of alternative
strategies relating to market entry and substantive growth and justification for selecting a
strategy and roles and responsibilities of persons who are given charge to implement the
strategies is also included in this report.
11

REFERENCES
Books and Journals
Aitken, H.G., 2016. Continuous Wave (pp. 512-13). Princeton University Pres.
Brush, C. G. and et. al., 2015. The impact of resources on small firm
internationalization. Journal of Small Business Strategy. 13(1). pp.1-17.
12

Carraher, S. M. and Paridon, T. J. 2015. Entrepreneurship journal rankings across the discipline.
Journal of Small Business Strategy. 19(2). pp.89-98.
Chang, J. F., 2016. Business process management systems: strategy and implementation. CRC
Press.
Hanks, S. H., 2015. The organization life cycle: Integrating content and process. Journal of
Small Business Strategy. 1(1). pp.1-12.
Harris, M. L., and et. al., 2015. Examining the impact of small business institute participation on
entrepreneurial attitudes. Journal of Small Business Strategy. 18(2). pp.57-76.
Helms, Marilyn M., and Melissa Whitesell. "Transitioning to the embedded librarian model and
improving the senior capstone business strategy course." The Journal of Academic
Librarianship 39. no. 5 (2013): 401-413.
Ibrahim, A. B., 2015. Strategy types and small firms' performance an empirical investigation.
Journal of Small Business Strategy. 4(1). pp.13-22.
Karpovsky, A., and Galliers, R. D., 2015. Aligning in practice: from current cases to a new
agenda. Journal of Information Technology, 30(2), pp.136-160.
Lawton, T. C., 2017. Cleared for take-off: structure and strategy in the low fare airline business.
Routledge.
Lussier. R. N., and Corman. J., 2015. A business success versus failure prediction model for
entrepreneurs with 0-10 employees. Journal of Small Business Strategy. 7(1). pp.21-36.
Malerba, F., and et. al., Dynamics of knowledge intensive entrepreneurship: Business strategy
and public policy (Vol. 38). Routledge.
Matt, C. and et. al., 2015 Digital transformation strategies. Business & Information Systems
Engineering. 57(5). pp.339-343.
Mellat-Parast, M., and et. al., 2015. Linking business strategy to service failures and financial
performance: Empirical evidence from the US domestic airline industry. Journal of
Operations Management, 38, pp.14-24.
Moseley III, George B. Managing Health Care Business Strategy. Jones & Bartlett Learning,
2017.
Peppard, J., and Ward, J., 2016. The strategic management of information systems: Building a
digital strategy. John Wiley & Sons.
Pisano, G. P., 2015. You need an innovation strategy. Harvard Business Review. 93(6). pp.44-
54.
13

Ryu, H. S., Lee, J. N. and Choi, B., 2015. Alignment between service innovation strategy and
business strategy and its effect on firm performance: An empirical investigation. IEEE
Transactions on Engineering Management, 62(1), pp.100-113.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. Pearson.
Zott, Christoph, Raphael Amit, and Lorenzo Massa. "The business model: recent developments
and future research." Journal of management 37. no. 4 (2011): 1019-1042.
Online
SWOT analysis of Volkswagen. 2016. [Online]. Available through:
<https://www.strategicmanagementinsight.com/swot-analyses/volkswagen-swot-
analysis.html>. [Accessed on 26th September 2017]
The Volkswagen Group. 2013. [Online]. Available through: <https://prezi.com/sfcypysiewnt/the-
volkswagen-group/?webgl=0>. [Accessed on 26th September 2017]
14

15