Business Strategy and Environmental Sustainability

This assignment examines the relationship between business strategy, environmental sustainability, and performance. It requires students to analyze various frameworks such as Michael Porter's Five Generic Strategies and apply them to understand how businesses can achieve both economic success and environmental responsibility. The analysis should also consider factors like environmental uncertainty and its impact on strategic decisions.

BUSINESS STRATEGY

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
1.1 Business missions, visions, objectives, goals and core competencies inform strategic
planning.......................................................................................................................................4
1.2 The factors that have to be considered when formulating strategic plans............................5
1.3 the effectiveness of techniques used when developing strategic business plans..................6
TASK 2............................................................................................................................................7
2.1 Strategic positioning of a given organisation by carrying out an organisational audit.........7
2.2 Carry out an environmental audit for a given organisation...................................................8
2.3 The significance of stakeholder analysis when formulating new strategy............................8
2.4 Present a new strategy for a given organisation....................................................................9
TASK 3..........................................................................................................................................10
3.1 The appropriateness of alternative strategies relating to market entry,substantive growth,
limited growth or retrenchment for a given organisation..........................................................10
3.2 Justify the selection of a strategy........................................................................................10
TASK 4..........................................................................................................................................11
4.1 Assess the roles and responsibilities of personnel who are charged with strategy
implementation..........................................................................................................................11
4.2 Analyse the estimated resource requirements for implementing a new strategy for a given
organisation...............................................................................................................................12
4.3 SMART targets to the achievement of strategy implementation in a given organisation...13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

EXECUTIVE SUMMARY
It is essential for the Volkswagen to use their strategic tools and techniques in a effective
manner so that it can help to attain its long term goals and objectives. With the help to
organisational and environmental audit the can knows their internal and external environment so
that they can overcome potential risk on the business operations. Apart form that they can also
use Porters-five-forces-analysis model which can provide a guidelines for its strategic planning
and they can provide competitive advantages over its rival companies in the airlines industry.

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 goals. It is efforts from the higher authorities in order to provide a right direction to a
business organisation. There are various factors which can influenced the business operations
and success of the company (Teece, 2010). The present report is based on Volkswagen which is
one of the leading brand in car manufacturer. They provide innovative and technologically
advanced products to its customers. The main purpose of this report is to understand strategic
planning process in order to achieve long term goals and objectives effectively.
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 and every company having their own mission, vision,
objectives and core competencies so that they make its strategic plan effectively (Astrachan,
2010). There are mission, vision, goals & objectives and core competencies of Volkswagen as
given below:
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. According to 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 and every company. It is related with the
future 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 products to its customer (Woodcock,
Green and Starkey, 2011).
Objectives: The goals and objectives are those target which
having a specific time frame. These goals and
objectives can be short term and long term.
The long term goals of Volkswagen is to
provide provide technologically advanced car
which is also environment friendly for the
company.
Core competencies: This is one of the key aspects for each and
every business unit. Because it can provide a
competitive advantages 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 (Chang, and Chuang, 2011.).
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 in
order to attain its long term goals and objectives. There are various factors which can influenced
strategic plan and adverse impact on the firms growth. These factors can be:
Industry factors: These factors are related with the particular industry. In the context of
Volkswagen, vehicle manufacturing sectors is one of the complex and competitive sectors. It can
involved 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 (Dong-Hun, 2010). In
order to maintain their market share and revenue Volkswagen can approach for new markets.
There are various emerging markets specially in Southest Asia can provide a huge market which
can help to increase their profitability.
Global factors: This is another major factors 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 great
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 (Reinhardt, and
Stavins, 2010). 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 in order 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 in order to design and
developing strategic plan. In this model, there are five key factors which must be considered by
the cited company.
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 (Hsieh, and Chen, 2011). 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 influenced their profitability.
Substitute products: This is another aspects 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 (Verreynne, and Meyer,
2010).
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.
TASK 2
2.1 Strategic positioning of a given organisation by carrying out an organisational audit
Volkswagen is an international brand which is operating their business at the global level.
They provide high quality and innovative vehicles for their customers. The cited company
economies of scale is quite good as compare to its rival organisations (Nordqvist, and Melin,
2010). It is essential for the business unit is to analyse and evaluate their internal environment
which can help to know their capabilities and weaknesses. For this they can use SWOT analyses
which is given below:
Strength The company has a wide range of cars which provide a long list for choose.
It is high value brand which adding the customer value.
They having more than 350000 staff at the global level.
There assembly plants are located in to various countries like Germany,
India, China, Indonesia, Brazil etc.
There products are technologically superior over its competitors.
Weakness Tough competition in the UK market which can leads to reducing its
profitability and market share.
Last year controversy and fraud found regarding the emission of their
products (Parnell, and et. al., 2012).
Opportunities There are various emerging market which can provide enough opportunities
for the future growth.
Focused on the research and development and create a new products which

is less harmful for the environment.
In the last decade the purchasing power of people increase which can help
to increase in the demand of car
Fuel cost is cut down which can also support in the cratering new demand
for their products.
Threats Large number of competitors avail in the market.
Incraese fuel cost which leads to decrease the demand of the products.
2.2 Carry out an environmental audit for a given organisation
It is important for a company is that to analyses their environment carefully so that they
can make their strategic plan in a appropriate manner. For this Volkswagen required to conduct
environmental analyses through PESTEL which is given below:
Political factors: This is related with the government stability and business policies of
the company. UK is a stable government which can provide certainty in the rules and regulations
of the business. It can help to provide consistent growth for the cited business unit (Slater, and et.
al., 2011).
Economical factors: This is another key factor which is related with the economic
performance of a particular country. United Kingdom is one of the leading economy approx.
$2.2 trillion which can provide enough growth for the future.
Social factors: In this factor per capita income, social trends, population size and other
social elements. In the context of UK which having good per capita income as compare to other
European nation which having a good opportunities for the product demand.
Technological factors: Technology played a prominent role in the success of a business
unit. Volkswagen can use technology in to their production process which can help to maintain
economies of scale.
Environmental factors: Today customer is more aware towards the environmental
issues therefore car manufacturing companies are focusing on the designing and developing new
car which is environment friendly. Therefore, Volkswagen is also produce hybrid and electric car
for the future demand (Acquaah, 2011).

Legal factors: There are various legal factors which can influenced business operations
of the company. For example, new environmental policy can adverse impact on their production
and output.
2.3 The significance of stakeholder analysis when formulating new strategy
Stakeholders played a significant role in the formulating and designing a business
strategy and its effective implementation. There are various stakeholders of Volkswagen such as
customers, employees, suppliers, government, financial institutions and community. Therefore,
the higher authorities of the cited business unit required to identified and determine its key
stakeholders through following process.
Stage1: In this stage the cited business firm is identified their stakeholder. In the context
of Volkswagen they having more than 350000 employees, customer, government, suppliers and
also determine its core objectives from the business (Elliot, 2011).
Stage2: This is another factors which is related with the stakeholder interest, its
bargaining power, interest etc. for example, in the car manufacturing the suppliers and
government played a significant role because they can directly affects firm's business operations
and profitability.
Stage3: The final stage of stakeholders analyses is related with the understanding interest
of both and its the responsibilities of the marketing department of Volkswagen is to
communicate with them over a period of time and inform them on their various activities which
are related with them.
2.4 Present a new strategy for a given organisation
It is essential for Volkswagen is to create and develop their new strategy for their near
future. So that they can provide strategic advantages over their competitors in the market. The
cited company required that to adopt new strategies and market plan. Therefore, Volkswagen is
investing in to their research and development in order to develop new innovation such as self
driving system, e mobility, and digital formation in their overall system (Liedtka,2010). It is also
important that their rival business units are also developing such system for the future. Today
customer is more aware towards environmental and climate issues. It can increase the demand of
those products which are fuel sufficient and less harmful for the environment. In order to meet
these needs company is develop hybrid and electronic cars which are more advanced and eco
friendly. For this, they launching various vehicle in this segment like E-golf which can satisfy

the needs of their potential customers. Apart from that they also focusing on the management
side and employees side. They launching various programmes which can help to adding the
value of their staff through providing professional and personal development.
TASK 3
3.1 The appropriateness of alternative strategies relating to market entry,substantive growth,
limited growth or retrenchment for a given organisation
Sustainable and consistent growth is required for each and every business unit. And for
this they required various strategies and approaches in order to maintain their growth in the
market (Melville, 2010). Volkswagen is having a good market share in the UK and European
market buy to to increasing the number of players it can reducing their market share and
profitability. Therefore they required to expand their market through using suitable strategy for
their consistent growth. These are:
Market entry strategy: Volkswagen is required to increase their operations and expand
market share through entering in to new markets (Teece, 2010). There are various emerging
economies such as Indonesia, Vietnam, Russia, India which can provide a good opportunities.
But for this they can choose appropriate market entry strategy which are given below:
Exporting: This is a market entry strategy where a company can export their produced
products in to another market. It is one of the best strategy for those businesses which are quite
small. Volkswagen can also used this strategy and they can export their car in to emerging
market. This is a cost effective approach for the cited company which required less investment.
Joint Venture: This is another approach where a business unit can partnering with another
firm in the same segment. This is a most suitable tool in order to entering in to new market.
Volkswagen can joint venture with other car manufacturers and product their products for the
new market (Astrachan, 2010). The advantages of this method they can share their resources
with each other.
Merger: This is another method for market entry. In this tools a company can merge a
small size company which is produced the same products. This approach can be used by the
Volkswagen and they can buy small companies and increase their customer reach.

3.2 Justify the selection of a strategy
It is one of the complex task for a business organisation is that to select an appropriate
market entry strategy for expanding their business and maintain its market share. There are wide
range of tools which can be used by the company. Therefore, Volkswagen required that to
determine and evaluate these tools according to the requirements (Woodcock, Green,and
Starkey, 2011). Here, it is important that each country having their own rules and characteristics
which need to be followed by the business unit. The top management of the cited business firm's
required that to study these factors and than choose its strategy. For example, Volkswagen wants
to expand their business in to India. Now they need to study various factors, laws and legislation
of that country. For them, Joint venture is the most suitable option for the company. Joint venture
is a strategic alliance where two or more business organisations are joint together and conduct
their operations. Volkswagen can joint venturing with the domestic companies in India. There
are various advantages of such strategy. The major advantage is that the domestic company is
aware about the India market and its customer choice (Chang, and Chuang, 2011). They having
good knowledge and information which can be used by the cited business unit. The another
advantage is that partners can be shared their resources and expertise which can provide
competitive advantage over others. It is a cost effective tools where both business unit can shared
their spending. Thus, Volkswagen required that to study various factors of a particular business
environment and then make their decisions accordingly.
TASK 4
4.1 Assess the roles and responsibilities of personnel who are charged with strategy
implementation
Strategy formulation and implementation is one of the tough task for the higher
authorities. It required enough knowledge and information regarding the overall market in order
to make their decision. In the strategy implementation the role of CEOP and the managing
director of the company is significant (Dong-Hun, 2010). They required to focused on the
strategic, operational and tactical level management in for policy and plan implementation. There
are various roles and responsibilities which can be performed by the CEO as given below:
Allocation of resources: This is the major role of a CEO in the strategy implementation.
Volkswagen required that to provide enough resources to their various functional department so

that they can perform their task. Apart form that they also provide power and authority so that
they can freely working for the business.
Create and develop culture: This is another key role which can be performed by the
CEO. Here the culture is related with the organisational culture where their values and behaviour
can be shared by the member of the company. In order to implement Volkswagen strategy plan
they required to develop and design a culture which can support the overall business activities of
the company. So that all functional departments and divisions are working together in order to
attain organisational goals collectively (Reinhardt, and Stavins, 2010).
Make quick Decisions: This is another role which required to performed by the higher
authorities. There are various decision at various levels such as strategic level, operational level
and tactical level. These decision are required the relevant data and information which can be
used by the managers. So that they can make their decision quickly and effectively.
4.2 Analyse the estimated resource requirements for implementing a new strategy for a given
organisation
Strategy implementation required various resources in order to attain their long term
goals and objectives. Volkswagen is a multinational company which have large pool of resources
in order to implement their business strategy (Hsieh, and Chen, 2011). In order to achieve their
long term goals and objectives there are following types of resources mentioned below:
Human resource: The staff of the company are the valuable for the business
organisation. They can help to attain their targets collectively. Volkswagen having more than
350000 employees which are skilled and talented. In order to implement their strategy they
required to recruit more work force which are qualified and skilled. For their HR resources they
can use various tools and techniques for recruitment and selection. There are two ways one is
internal and another one is external recruitment which can help to provide talented and skilled
workforce for the near future.
Financial resources: These are another important resources which having a great
significant in the implementation of strategic planning (Verreynne, and Meyer, 2010).
Volkswagen is a multinational corporation which having large financial resources. They required
to allocate these funds in those areas where its required. Apart from that cited business unit
financial performance is quite good which can allow to take loan from external sources such as
banks and financial institutions.

Information and knowledge: It is essential for a company that to analyse their overall
environment and collect information and data in order to implement their market plan. For this,
Volkswagen can conduct market research and data for a particular area which can help to make
the decisions effectively.
4.3 SMART targets to the achievement of strategy implementation in a given organisation.
The goals and target are very crucial for every business organisation. This is required a
careful planning in order to set their future targets. These targets must be appropriate in terms of
achievable and desirable in nature. For this the cited business unit can be used SMART model in
order to established their goals and objectives. It is approach which can help to set their target for
the future according to their capabilities and resources (Nordqvist, and Melin, 2010). The
manager of the cited company are required to share these goals to their staff members so that
they feel confident and motivated. These SMART goals of Volkswagen are required if these
targets are not specific that what they wanted to attain. In the context of cited business
organisation there specific goals can be related with the customers and its need. Their targets if
not measurable in terms of number they can not achievable for no one. Therefore. The main
target of the company in the next five years is to increase market share by 3.5 percent at the
domestic and internal market.
CONCLUSION
As per the above mentioned report it has been concluded that strategic planning is
approach where a company can use in the long term in order to attain success. This report is
described about the firm's mission and vision statement which having a great significant. Apart
form that the report is explained about the various factors which can internal and external and its
influenced in the business operations and profitability. Further it also mentioned about the
various tools in order to entering in to the market so that Volkswagen can maintain their market
share and profitability. In the end, the report concluded about the various roles which can be
performed by the top management and various resources which shared by the functional
department. So that they can attain their long and short term goals and objectives effectively.

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MICHAEL PORTER'S FIVE GENERIC STRATEGIES. 2017. [Online]. Available through:
<http://refreshbreeze.weebly.com/48-michael-porters-5-generic-strategies.html>.
[Accessed on 25th March 2017].
PORTER’S FIVE FORCES. 2017. [Online]. Available through:
<ANALYSIShttp://pestleanalysis.com/porters-five-forces-analysis/>. [Accessed on 25th
March 2017].