Strategic Management: Volkswagen's Strategic Directions, External Environment, and Competitive Advantage

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Strategic Directions followed by Volkswagen in past...........................................................3
TASK 2............................................................................................................................................4
Reviewing external environment for Volkswagen.................................................................4
Critically evaluating competitive advantage of Volkswagen.................................................7
TASK 3............................................................................................................................................9
Strategic drift for Volkswagen...............................................................................................9
Vision and Mission statement analysis...................................................................................9
Strategic capabilities of Volkswagen...................................................................................10
Using Business Canvass Model............................................................................................12
TASK 4..........................................................................................................................................14
TASK 5..........................................................................................................................................15
Evaluating Resource implications of Volkswagen...............................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18
Books and Journals...............................................................................................................18

INTRODUCTION
Strategic management is that business practice in which any organization makes such
planning of business processes and resources which are helpful in achieving Business goals and
objectives in longer run. Strategic management is a tedious task and extensive as well. It requires
thorough understanding of various business factors and dimensions. While making any planning
in this context management in organizations are required to consider that planning must align
with business goals and objectives (Hitt and Duane Ireland, 2017).
In this report strategic management is discussed with respect to a very renowned
organization in automotive sector, Volkswagen. Volkswagen is operational in automotive
industry from nearly a century and the company have its establishments in almost every part of
the world, including South America and Brazil as well, where it has no less than 4 plants. In
context of Volkswagen, report will be discussing strategic directions that company have
followed in past, an evaluation of external environment and competitive advantages. Followed
by an understanding of strategic drift available and strategic capabilities of Volkswagen. Also, an
analysis of Vision and Mission, supportive in fulfilling needs of present times and an analysis of
ways in which Volkswagen is generating values for customers are made. Further strategic
planning for company is prepared and also resources that are required in this order are discussed.
TASK 1
Strategic Directions followed by Volkswagen in past
Volkswagen have always followed such strategies through which it can make its mobility
best possible comfortable and affordable for its consumers together with helping company to
generate more and more revenues and achieve greater prosperity. As, it is well known in the
market that Volkswagen is a company with diversified portfolio. Company serves demands of
many range of consumers in market from one who are preferring to use luxurious and expensive
cars to one who are willing to buy low priced and economy vehicles. The portfolio it has serves
demand of all these range of customers (Trigeorgis and Reuer, 2017). Volkswagen supports this
marketing management by selling cars under its own brand name of Volkswagen and under
several other brands like Audi, Porsche, Bentley, Lamborghini and many more. All these brands
are also having renowned names in market and their own brand values. What Volkswagen had
mostly followed in this way is to establish and use proper strategies so that the brand values of

these brands can be enhanced more, enabling them to cater more market shares, attracting more
consumers and providing much high valued and differentiated products. This strategy had the
main intention to retain and develop better consumer bases for Luxurious car models which are
already having significant market goodwill. Volkswagen have very zealously followed this
strategy throughout these past years in case of market of luxurious cars.
In case of Low-priced economic vehicles the strategy of Volkswagen is seen clear and
simple. Volkswagen have best analysed the perception of consumer segment in the market that
people under this market are more worried about the cost of products rather than value and
differentiated feature that they can be availing under products purchased by them. Hence,
following this perception of people and attacking their mindsets, Volkswagen decided to go on
emphasising over minimising its cost to best extent possible. However, this was not that case that
company is not seen offering any value and good features in their low priced products, but the
features that are being offered are aligning with the their cost, which means that are really basic
in nature and not that much advanced as seen in Luxurious cars of Volkswagen. The features are
sufficient in meeting expectations of consumers in this market. This particular strategy in case of
economy vehicles have helped Volkswagen in many ways (Ketchen Jr and Craighead, 2020).
First of all it helped company in gaining satisfaction of consumers, as it directly tried meeting
their expectations in manner of low-price and basic features. Secondly, low cost maintained by
Volkswagen is not being met by any other competitor of Volkswagen in market like Toyota and
Ford and FIAT. Even at similar features, prices of products of these companies are little higher
that Volkswagen and hence they are not able to surpass Volkswagen in this market.
Therefore, it can be said that strategy followed by Volkswagen in past years have been
very supportive for company. Volkswagen have tried different strategies in separate markets
which were best needed there.
TASK 2
Reviewing external environment for Volkswagen
External Environment of a company is composed of various factors that are present
outside the control of management in business organisation. These are factors that work in
outside environment and influence business planning and strategies. Since these are out of
control of management in business, but have their implications over business activities, it is best