Strategic Planning | Case Study

Running head: STRATEGIC PLANNING
STRATEGIC PLANNING
Name of the Student
Name of the University
Author Note

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Company overview
Volkswagen Group is an automotive manufacturing which is internationally known as the
Volkswagen Group of Industries. It is a German multinational car manufacturing company that is
known for having its headquarters in Wolfsburg, Lower Saxony, Germany. The company is
mainly owned by the Austrian Porsche and Piech families (Bomey 2016, June 16). The company
mainly manufacturers in the automotive industry back from the period of Adolf Hitler that in the
early 1938. The company in the present date is second largest manufacturer of car, it has more
than 600,000 representatives who are known for manufacturing more than 28,000 vehicles per
day.
Industry analysis with Porter Five Forces
Bargaining power of the Buyers
The bargaining power of the buyer is quite low as because of few factors like the determinants of
cost and easy to switch option. This makes it very hard for the customers to shift to other brands
like Ford, Toyota and Honda just because of competitive prices. It is also known for
manufacturing premium products that attracts premium buyers in the market which helped the
company to gain huge customer loyalty.
Bargaining power of the Suppliers
The bargaining power of the suppliers are much low in the case as because the company is
known for getting its products supplied from specialized suppliers in the market who are
completely reluctant to the company itself. In this case suppliers cannot afford to lose the buyers.

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Threats of new entrants
According to the author Ewing and Bowley (2015) the automotive industry is known for having
large entry barriers for new companies to start their business in the new market. Therefore it can
be said that the threat of new entrant is usually low, for the high cost start up and difficulties in
achieving importance in market.
Threat from Substitute Product
It can be said that company faces medium threat from the substitute products just because in the
increment in the price of gas, the operational initiative from the government and as well as the
promotion of environment friendly products.
Rivalry from existing players
The level of competition in the automotive market is much high, therefore the company faces
high level of competition from the other manufacturing companies like Nissan, Ford, Toyota and
Honda. All these manufacturing companies are known for making efforts to grab the market
share (Bowler, 2015, October 2).
Competitor Analysis
The Volkswagen Australian principle activities mainly includes the manufacturing, import of
exclusive vehicles and distribution of the vehicles and vehicle parts in the market of Australia.
The company in its showroom also is known for selling various types of Volkswagen pre owned
cars, parts accessories for all Volkswagen model and merchandise (Boston, 2017, January 09).
The Volkswagen model of cars include Golf, polo, Tiguan, Jetta, Van and pickup truck.
Therefore in the market of Australia the company is known for facing intense market

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competition from its top five competitors like Toyota, General Motors, Ford, Hyundai and BMW
(BusinessTech 2016, February 29).
Fig 1. Represents the Competitors analysis for Volkswagen Company in Australia
Source: (Boston, 2017, January 09)
Resources and competencies of the organization based on Resource
Based Theory
The Resource based theory is known for suggesting that the particular resources which
are utilized by the company are rare to find, difficult to get and are non substitutable for the firm
in the long run. Therefore the available resources should be used efficiently and effectively by
the firm so that it can provide the company the foundation to develop various types of
capabilities to achieve a superior performance from the other companies functioning in the same

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market. Therefore the Resource based theory is known for contending the possessions of
strategic resources which will thus provide the organization with a golden opportunity to develop
a good competitive advantage over the rival companies (AGM, 2017).
Therefore the resources and competencies for the company mainly include the use of
finance, technological inventions and as well as the effective use of raw materials such as
aluminums, steel and other useful metals which are used in building and manufacturing of the
automotive vehicles in the market. Talking about the competencies of Volkswagen mainly
include innovation, creativity and diverse product portfolio (Benoit, 2017). The company has
continued to invest more in the development of latest use of technologies and safety sensors in
the cars which has helped it to grow and create a successful brand.
SWOT Analysis
Strengths for the company mainly include the strong international presence and brand image.
The company is known for having its market presence in more than 86 countries all over the
world. It has vast passenger driven vehicle which are of much demand in the market.
Volkswagen has a strong brand image in the market and is one of the most popular automotive
brands in the market. Also the huge amount of growth in the Asia Pacific has been a strong point
for the company. It is gaining more power in Asia Pacific as because it has few of the world’s
fastest growing economies.
Weakness of the company mainly include the diesel scandal in the year 2015, which had
turnished the reputation for the company. The company was caught for billion dollars for its
dubbed diesel scam, which was later on accepted by the company. The company is also known

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for facing reduced operating profit due to the increase in compliance issues. The brand had more
than 25 billion fines in US market for the restitution of 5,80,000 tainted vehicles. It had thus
affected the company with its operating profits.
Opportunities for the company mainly include the growing deamdn for passenger vehicles in the
market of Asia Pacific. It will present a major opportunity for the car makers to grab the market.
Therefore the market of China and India will offer big opportunities
Threats for the company mainly include the heavy competition across the automotive industry
which is constantly growing and thus becoming more intense. Thus it is leading the company to
invest more in the research and development program to anticipate the threats faced by the
company.

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References
AGM. Retrieved April 2, 2017, from http://www.reuters.com/article/us-volkswagen-
shareholders-idUSKCN0Z60V6
Benoit, D. (n.d.). The Hottest Metric in Finance: ROIC. Retrieved April 2, 2017, from
https://www.wsj.com/articles/the-hottest-metric-in-finance-roic-1462267809
Bomey, N. (2016, June 16). Volkswagen bets big on electric cars. Retrieved from
https://www.usatoday.com/story/money/cars/2016/06/16/volkswagen-electric-vehicles-
mobility/85972522/
Boston, W. (2017, January 09). Volkswagen sales rise in 2016 despite scandal. Retrieved April
02, 2017, from http://www.marketwatch.com/story/volkswagen-sales-rise-in-2016-despite-
scandal-2017-01-09
Bowler, T. (2015, October 2). Volkswagen: From the Third Reich to emissions scandal.
Retrieved January 26, 2017, from http://www.bbc.com/news/business-34358783
BusinessTech. (2016, February 29). Friedman, G. (2017, January 18). 3 issues that will lead to
trouble in Europe in 2017.
Duke, S. (2016, August 24). Why diesel cars are bad for our health. Retrieved January 27, 2017,
from https://seanduke.com/2016/08/24/why-diesel-cars-are-bad-for-our-health/
Egan, M. (2017, March 31). Wells Fargo scandal is not over. Over a dozen probes remain.
Retrieved April 02, 2017, from http://money.cnn.com/2017/03/31/investing/wells-fargo-
investigations-fake-account-scandal/

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Ewing, J. & Bowley, G. (2015, December 13). The Engineering of Volkswagen’s Aggressive
Ambition. The New York Times. Retrieved May 23, 2016,