Assessment 2: Case Study on Individual Business Strategy of Audi

This case study examines the business strategy of Audi, a prominent German automotive manufacturer. The report begins with an executive summary and table of contents, followed by an introduction that defines business strategy and its importance. The core of the analysis focuses on Audi's generic business strategy, including Porter's generic strategies of cost leadership, differentiation, and focus. The study further explores Audi's intensive growth strategies, elaborating on Ansoff's product market expansion matrix, which encompasses market penetration, product development, and market development. The report analyzes how Audi applies these strategies to enhance competitiveness, achieve market leadership, and drive growth. The conclusion summarizes the key findings, emphasizing the role of strategic planning in Audi's success, while also offering recommendations for further improvements. The analysis provides a comprehensive understanding of Audi's strategic approach in the automotive industry.

Assessment 2-
Case Study Individual
Business Strategy of Audi

EXECUTIVE SUMMARY
The following report discusses the business strategy of an organisation that refers to the
combination of active and proactive actions for enhancing and improving the overall
performance of the organisation for achieving its goals effectively and efficiently. It has been
discussed in the report that there are many business strategies that can be undertaken by an
organisation with the aim of achieving desired results. It has been understood that an
organisation's business plan is made with the purpose of achieving effectiveness, identifying and
utilising the business opportunities for growth with the help of a purposeful business strategy.
Business strategy with the help of Michael porter generic strategies framework has been
explained in the following report. The use of Michael Porter intensive growth strategies has been
discussed that provides the description of cost leadership, differentiation and focus strategy by
the organisation for achieving competitive advantage. Application of intensive growth strategies
has been discussed in the end of the report that can be helpful in improving the organisational
performance and provide higher opportunities for growth of the organisation. With the help of
intensive growth strategies there has been a discussion of market penetration, product
development and market development strategy of the organisation.

Table of Contents
INTRODUCTION...........................................................................................................................1
AUDI GENERIC BUSINESS STRATEGY...................................................................................1
PORTER”S GENERIC STRATEGY OF AUDI...................................................................2
INTENSIVE GROWTH STRATEGIES OF AUDI........................................................................4
ANSOFF’s PRODUCT MARKET EXPANSION STRATEGY...........................................5
CONCLUSION................................................................................................................................7
RECOMMENDATION...................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business strategy can be referred to the competitive actions that are taken by an organisation
for attracting customers, enhancing competitiveness, creating better performance and achieving
the goals and objectives of the organisation. A business strategy mainly creates a pathway and
outlines a business plan that can be helpful to reach desired results or achieve objectives and
goals. Business strategy helps the overall management activities of an organisation with the
integration of a framework for analysing, exploiting and discovering beneficial opportunities.
Identify potential threats and make optimum utilisation of resources and the strength of
organisation to counter balance its weaknesses. Audi is a German automotive manufacturer of
luxury vehicles headquartered in Bavaria, Germany. The company is the subsidiary of its parent
company, the Volkswagen group; Audi produces vehicles in nine production facilities
worldwide. The report will explain the business strategy of the organisation for pricing its
product, better marketing and advertising, improving quality and performance etc. In the end, it
will provide the growth strategy of the organisation with the help of a framework in regard to
market penetration, product development and market diversification.
AUDI GENERIC BUSINESS STRATEGY
Audi is a multinational German automotive manufacturer that has a very high level of
recognition in the automotive industries and has a great brand image in front of its target market
segments. It is very difficult for the organisation to stay competitive in the industry because of
the increasing level of competition that is affecting the market leadership position and firms'
share in the market (Liu and Kong, 2021). Due to the intensifying competition in the business
environment the Audi is compelled to achieve critical benefits over its competitors to stay ahead
in the market. The organisation has a global brand image with intense presence throughout the
globe; Audi has competitively positioned itself based on critical factors that intensify its
competitiveness in the market. Audi's strategies that can provide greater competitiveness to the
organisation can be understood by highlighting the intensive growth model with the help of
porter's generic used by the organisation. Audi has adopted a combination of managed strategies
like focus strategies, differentiation strategy and cost leadership for increasing its
competitiveness and moving ahead of its rivals.
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PORTER”S GENERIC STRATEGY OF AUDI
The company utilises business strategies like sales growth and expansion objectives so that
the company can focus on obtaining the most appropriate growth strategies based on the generic
strategy streams (focus, cost and differentiation). Market development, product development,
market penetration and diversification strategies are also used by Audi for intensifying its
competitive strength. The company has focused on improving its competitiveness with the use of
Porter's generic strategy framework that was introduced by Michael Porter in 1980. This
framework is a very effective framework that can be used by organisations for achieving
competitive advantage by choosing the most effective strategies for the business (Hristov &
Appolloni 2022). The framework mainly focuses on 3 strategies that are cost focus,
differentiation and cost leadership strategies. The famous explains that the companies can
achieve competitiveness in the market by lowering down the cost of products, providing different
products as compared to their competitors or to use premium pricing for high quality products.
Figure 1: Porter’s Generic Strategy
Cost leadership
This strategy of porter's generic mainly explains the advantage gained by the companies
by lowering down their cost of products (Ali, & Anwar, 2021). Audi uses cost leadership in the
following manners.
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 Audi preserves its position as a market leader by using this strategy that helps to provide
and develop an effective and efficient value chain market.
 Audi uses this strategy to target consumers from the middle class which covers the
maximum proportion in the overall consumer market throughout the world. Middle class
consumers are highly sensitive towards costing and generally have high favour on the
price or cost of products and use of cost leadership helps to the needs of middle class
consumers.
 Audi provides easy access and affordable products of its vehicles throughout the world
which has created greater brand awareness and increase in overall sales that provide
competitive advantage to the business.
 By charging low prices for products by decreasing the production cost and maximizing
supply chain efficiency Audi has gained competitive advantage. The company also
provides discounts and offers to achieve its overall sales target and handle competitive
advantages.
Differentiation
It is among the most common Porter's generic strategies for increasing competitiveness of
an enterprise. This strategy helps Audi to increase its competitor base by providing highly
differentiated and unique products and features to the customers. The main purposes of using
differentiation by the organisation can be understood with the following points.
 With the help of differentiation Audi tries to embed innovation in its products and
address consumer health concerns so that maximum number of consumers can be
attracted. The company has expanded its product segment after understanding the
consumer demand and trends that provide growth opportunities for the organisation (Sun,
2019).
 The combination of cost leadership and differentiation is a strategy adopted by Audi that
has helped the organisation to set high performance standards with cheaper rates that has
increased customer loyalty and competitiveness.
 With the help of differentiation generic strategy, Audi offers its products by positioning
itself such that it looks different from available alternatives in the market. With a
positive brand image the company has gained a strong foothold in the market, due to its
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extensive advertising and marketing with the help of celebrity endorsement that highly
differentiated Audi vehicles from other brands.
Focus strategy
It is the third generic competitive strategy that is used by organisations to concentrate or
focus their resources over the expansion of niche target segments. Audi has adopted this strategy
for focusing on specific market segments in particular for achieving competitive advantage.
 Audi adapted the focus strategy in terms of low cost with best value. The low-cost focus
strategy is mainly adopted by the organisation for serving the need of narrowly targeted
markets with low cost products.
 The Best value focus strategy is used by Audi to serve products to the customers
according to their target market to satisfy their specific taste, design, size and unique
requirement of the product.
 Focus strategy mainly deals in improving the attributes of a product like its branding,
innovation, designing, packaging, etc. for fulfilling customers' psychological expectations
and for their money spend (Desai, 2019).
INTENSIVE GROWTH STRATEGIES OF AUDI
Intensive growth strategies of the organisation mainly deals in innovating, developing,
designing, recreating and presenting new products or Market for achieving the growth objectives
of the organisation (Browne, and et. al. 2018). Audi specifically uses these strategies for
understanding the future needs for market expansion, product development and market
penetration so that competitiveness can be enhanced and customer interest can be satisfied. The
use of intensive growth strategies can help the organisation to actively look for the opportunities
for product or market expansion. The intensive growth strategies can be categorised in many
generic strategy systems that are elaborated below (Fernando and et. al. 2018). These product
market expansion strategies are depicted mainly in Ansoff's product market expansion Matrix
that includes market development, diversification, product development and market penetration.
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ANSOFF’s PRODUCT MARKET EXPANSION STRATEGY
Audi uses Ansoff's product market expansion strategy for maximizing profit and
broadening its market coverage by maintaining relevant business operations for the long term.
The company uses intensive growth strategies for improving its sales growth in the market and
expanding its consumer base.
Figure 2: general explanation to Ansoff Matrix
Market penetration
It mainly involves the strategy for enhancing growth of sales within the available
customer base and focusing on existing products in the existing market (Kreutzer, 2019).. It is
the primary intensive growth strategy that is adopted by the organisation to accomplish growth
objectives in following ways.
 Audi lowers download prices for promoting and marketing its products in the consumer
market and offers price discounts, offers and deals in its promotional campaigns for
attracting customers.
 The company tries to increase sales by using cost leadership and integrating innovation
for clear differentiation of products so that maximum customers can be attracted.
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 During the initial growth time of the organisation the company has used a market
penetration strategy that played an important role in making the organisation successful.
Product development strategy
It refers to the strategy that involves the development, modification or creation of existing
products and new products so that the company can create new product lines for target market
segments (Candelo, 2019). Audi uses product development strategy in following manners.
 Since the origin of the organisation, Audi has focused on extending its product segment
and broadening its market coverage so that it can gain competitive advantage and provide
innovative products that can tackle competition.
 The Company has intensified research and development activities so that innovations and
creativity can be seen in the products of the organisation and novel products can be
served to customers.
 Audi supports an intensive growth strategy for lowering down the cost of production and
using the existing infrastructure for launching advanced products that can emphasize the
growth of organisation in the market.
Market development strategy
Market development strategy can be explained as the intensive growth strategy of
Ansoff's growth matrix which mainly focuses on exploring and entering new markets (Widodo,
2019). Audi applies market development strategy in the following way.
 The Market development strategy used by Audi focuses on product development and
market penetration that has supported the organisation to expand in many countries
throughout the world.
 Company uses aggressive marketing and promotional activities like celebrity endorsed
promotional campaigns and exclusive marketing so that it can capture new customers and
become market leaders across new markets.
 Audi has used this strategy for expanding its value chain for improving its distribution
network globally and attaining a competitive position in the market.
 Audi has used cultural and local values and norms for its marketing campaigns by which
it was able to enter into new geographic locations throughout the globe.
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CONCLUSION
It has been concluded from the above report that business strategy helps an organisation to
develop effective plans to reach desired results. It has been discussed that an organisation that
has a business strategy can have better competitive images and chances of growth. It has been
understood that business strategies such as generic and intensive growth strategies can be
adopted by an organisation for improving its competitiveness and growth opportunities in the
market. Moreover, Porter's generic strategy, explaining cost leadership, differentiation and focus
strategy has been discussed for improving competitiveness of the organisation. Furthermore,
intensive growth strategies have been explained with the help of Ansoff's product market
expansion strategy. Finally, the demonstration and overview of market penetration, product
development strategy and market development strategy of the organisation has been discussed
for increasing growth opportunities of the organisation.
RECOMMENDATION
It can be recommended that an organisation should choose the right combination of
proposed generic and intensive growth strategies by critically evaluating and examining their
competitiveness in terms of their rivals and the prevailing marketing conditions and their market
performance. It can be suggested that there are various risks and challenges associated with the
use of intensive or generic growth strategies that vary from company to company and the choice
of organisation for their intensive growth strategy is connected to their generic growth strategy. It
is highly recommended that an organisation should consider the use of these strategies wisely
and after evaluating their current competitive abilities and market capabilities so that their
profitability, competitiveness and market share can be enhanced.
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REFERENCES
Books and Journals
Ali, B. J., & Anwar, G. (2021). Porter’s Generic Competitive Strategies and its influence on the
Competitive Advantage. Ali, BJ, & Anwar, G.(2021). Porter’s Generic Competitive
Strategies and its influence on the Competitive Advantage. International Journal of
Advanced Engineering, Management and Science, 7(6), 42-51.
Browne, S. and et. al. (2018). Shaking up business models with creative strategies: when tried
and true stops working. Journal of Business Strategy.
Candelo, E. (2019). Marketing innovations in the automotive industry: Meeting the challenges of
the digital age. Springer.
Desai, C. (2019). Strategy and strategic management. In Management for Scientists. Emerald
Publishing Limited.
Fernando, Y. and et. al. (2018). Managing project success using project risk and green supply
chain management: A survey of automotive industry. International Journal of Managing
Projects in Business.
Hristov, I., & Appolloni, A. (2022). Stakeholders' engagement in the business strategy as a key
driver to increase companies' performance: Evidence from managerial and stakeholders'
practices. Business Strategy and the Environment, 31(4), 1488-1503.
Kreutzer, R. T. (2019). Concepts for the Development of Strategies. In Toolbox for Marketing
and Management (pp. 49-87). Springer, Cham.
Liu, C. and Kong, D., (2021). Business strategy and sustainable development: Evidence from
China. Business Strategy and the Environment, 30(1), pp.657-670.
Sun, L. (2019). Innovation Strategy and Corporate Performance: An Empirical Study of the US
Automobile Industry (Doctoral dissertation, Maharishi University of Management).
Widodo, M. (2019). Developing The Competitiveness Strategy Of PT. Maxima Amerta Kerta In
Car Rental Industry.
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