Volkswagen AG Strategic Position
Added on 2020-02-05
11 Pages3633 Words60 Views
BUSINESS STRATEGY
Table of ContentsINTRODUCTION......................................................................................................................1TASK 2......................................................................................................................................12.1 Strategic position of VW AG...........................................................................................12.2 Environmental audit for VW AG.....................................................................................22.3 Significance of stakeholder analysis while formulating new strategy.............................32.4 New strategy for VW........................................................................................................4TASK 3......................................................................................................................................43.1 Appropriateness of alternative strategies for Volkswagen...............................................43.2 Justification of the selection of strategy...........................................................................5TASK 4......................................................................................................................................64.1 Roles and responsibilities for strategy implementation....................................................64.2 Resource requirement to implement a new strategy for VW AG....................................64.3 Contribution of SMART targets to the achievement of strategy implementation in VWAG..........................................................................................................................................6CONCLUSION..........................................................................................................................7REFERENCES...........................................................................................................................8
INTRODUCTIONThe business strategy concept is the means by which the business organisations sets outactivities to achieve their desired goals. Simply, it can be referred to long-term businessplanning. Further, there are several issues about resources is considered in the businessstrategy, i.e. raising capital for the introduction and operation of any project. The strategiesare also about making decisions related to resources quality to be allocated for the decidedproducts manufacturing. Developing productive and effective business strategy is the mainactivity of management in any business firm. The best possible strategy can be selected afterthe determination of internal and external factors that boost the business in attainingcompetitive advantage in the market. Here, the report is briefing about the strategic planningprocess of Volkswagen due to the emission scandal negative impact on the company’soperations and image in the market. The following paper is aimed to determine sustainablestrategies for the company to rebuild its market position and achieve long-term success inbusiness. TASK 22.1 Strategic position of VW AGThe following SWOT analysis is illustrating strategic position of Volkswagen in theautomotive industry:StrengthsStrong portfolio of brandWorldwide presenceWell performing brandsStrong presence in ChinaSynergyWeaknessesWeak position on the passenger carmarket of USMost of the Volkswagen cars are notenvironmental friendlyOpportunitiesChanging needs of customersRising prices of fuelsGrowth by acquisitionsPositive attitudes of the managementtowards green techniques ofmanufacturing vehiclesThreatsNew standards related to car emissionIncreasing prices of raw materialFluctuating prices of fuelFluctuating rates of exchange1
2.2 Environmental audit for VW AGThe following environmental factors influence the business activities of VW:Political factors – The political factors comprise the main regulations, laws, restrictions andsecurity measures that apply to the entire automotive sector. Due to the distinct politicaldecisions Volkswagen have to take some care and precautions regarding the environmentalissues while manufacturing cars. At present, hybrid cars are in more demands and country’sgovernment is also supporting such type of projects. Therefore, all production of VW shouldcomply with vehicle emission standards of EU and Euro standard regulations (Brinkschröder,2014). Economic factors – These are mainly in relation to global economic growth, exchange ratesand certain setting of business that predominate the whole industry. In past some years, theautomobiles prices have enhanced because of rise in inflation rate. In terms of automobileindustry infrastructure development is most demanding. The key factor that influences theelasticity of external prices comes from the industry’s dependence on oil (Eyceoz, 2009).However, high prices of petrol does not bring any changes in vehicles demands as most of theVolkswagen cars are fuel efficient. The changes in productions and demand based on motortrade create sizable impacts not on the company alone but also on the supply chain activitiesof the business. Furthermore, in an increasingly rising international markets, the alterations ofcurrency have significant influence on the VW supplies and goods competitiveness (Freeman,2010). Social factors – These generally includes changes in global demographics and culture apartfrom the customers buying patterns changes. The cars choices not just influenced byeconomic changes but through socio-cultural aspects as well. The rising awareness ofcustomers and concern about the vehicle driving implications is the most significant socialtendency to be addressed by manufacturers of automobile. Volkswagen is attempting toaddress the issue by enhancing its hybrid and electric cars range (Hill, Jones and Schilling,2014). Another essential demographic factor that affect the overall sales of VW is agingpopulation. Also, the company is greatly affected by the additional range of social aspectslike changes in the attitudes of customers, changes in family values, opinions towardstravelling and automobiles, media perception about brand and target customer’s welfare andhealth. The ability of VW to bring the world-class vehicles depends on the hard work andcraftsmanship of Americans who manufacture parts for its trucks and automobiles. Due to2
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