Business Strategy and Analysis Report for LOY Auto (Module X)

This report provides a comprehensive analysis of LOY Auto's business strategy. It begins with an introduction to business strategy, followed by an organizational audit using SWOT analysis, and an environmental audit using PESTLE analysis of Volkswagen. The report emphasizes the importance of stakeholder analysis for formulating new strategies, particularly in the context of producing environmentally friendly products. It then discusses the strategic position of LOY Auto, considering its strengths, weaknesses, opportunities, and threats. The report evaluates the appropriateness of alternative strategies such as substantive growth, limited growth, and retrenchment, recommending limited growth. The analysis is justified by the need to address current challenges and capture a larger market share. Finally, the report outlines the roles and responsibilities of personnel, resources required, and the contribution of SMART objectives for successful strategy implementation.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Strategic position of an enterprise by conducting organisational audit............................1
2.2 Environment audit of firm................................................................................................3
2.3 Importance of stakeholder analysis for formulating new strategy for the business.........5
2.4 Strategy for an enterprise..................................................................................................6
TASK 3............................................................................................................................................6
3.1 Appropriateness of alternative strategy............................................................................6
3.2 Justification of strategy.....................................................................................................7
TASK 4............................................................................................................................................8
4.1 Roles and responsibilities of personnel included the implementation of strategy...........8
4.2 Resource required or implementation of strategy............................................................9
4.3 Contribution of SMART objectives for the achievement of strategy implementation. .10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Sequence of steps used by an organisation for achieving its both short and long term
objectives is known as business strategy. Various tools and techniques are used by the manager
under this for making quality products for numerous customers (Business Strategy, 2017).
Optimum utilisation of resources and performance of whole enterprise can be increased with the
help of this. It assists the managers in setting effective goals and targets for business. One of the
main advantages of effective business strategy is that it gives opportunity to the manager to
evaluate effectiveness and profitability of various products made by the firm. This increases the
efficiency of various activities of business. The report will analyse the business plan of LOY
Auto mobiles. Presently, firms produce a variety of products for satisfying the needs of large
number of individuals. The way in which various elements such as goals and mission of firm
affect the process of strategic planning are discussed in this report. Volkswagen is also chosen in
this study to state the way managers of firm can capture higher market share by using the
concept of SMART targets. Along with this, the report will analyse resources required for
implementing strategy.
TASK 1
Attached in power point presentation
TASK 2
2.1 Strategic position of an enterprise by conducting organisational audit
Evaluation of every activity done by the enterprise for satisfying needs and wants of
customers and to improve the results and output of operation is known as organisational audit.
Main benefit of this is that it helps in identifying the skills of firm such as its resources,
infrastructure and at the same time, guides manager in making effective policies (Alsudiri, Al-
Karaghouli and Eldabi, 2013). For this, SWOT analysis can be used by the manager for
identifying strengths, weaknesses, opportunities and threats of firm. SWOT analysis of
Volkswagen can be understood by the following points:
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(Source: Information Retrieval and research methods SWOT , 2017)
Strengths: Capabilities and skills of a commercial entity which differentiate it from competitors
is known as strengths (Azar 2011). By effectively utilising this greater market share can be
captured by the Volkswagen. Main strengths of Volkswagen are as follows:
 Firm make and deliver quality and variety of products for satisfying the needs of large
number of customers.
 Effective process is used by the firm for producing final goods for numerous customers.
 Effective and standard method is used by Volkswagen for making final products.
 Activities of firm are expanded in large number of areas.
 Positive brand image is one of the biggest strength of Volkswagen which ensure large
number of sales of its products.
 Firm's effective and innovative products is one of the reason which attract more number
of customers every year.
 Enterprise uses an effective way of making goods for its customers which increase the
goodwill of firm and standard methods of doing the work remove the grounds of rising
conflicts and issues at workplace.
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Illustration 1: SWOT Analysis

 Skilled employees and advances research & development department is one of the
biggest strength of the company. Various activities of research department provide
opportunity to the firm to make products as per the needs of customers.
Weakness: Weakness of Volkswagen can be understood by the following points:
1. Increasing number of competitors is one of the weakness of firm.
2. Lack of knowledge of workers affect the process of implementing strategy.
Opportunities:
 Increasing scope of technological products give opportunity to the firm to expand its
activities in other areas. As needs and wants of customers are changing at a fast speed, this provide opportunity to
the enterprise do add more features in the product for delivering effective services
(Bucolo and Matthews 2011).
Threats:
 Policies made by the government and various rules creates unnecessary obstacles in the
functioning of firm.
 Number of competitors is one of the main threat for Volkswagen.
By using SWOT for the firm Volkswagen it can be said that at present company is able to
capable a larger market share by making and delivering innovative product to its customers. By
making and implementing effective strategies, larger market share can be captured by the firm.
2.2 Environment audit of firm
Environmental audit is the process of identifying various elements exist in the
environment in which a firm execute its activities and effect of that factors on the process of
business (Azar, 2011). Any variation take place in these largely affect the operation of an
organisation. One of the main advantage of doing environmental audit is that it support and guide
the top manager during the process of making policies and strategies. PESTLE is one of the
approach which can be used by firm to identify the factors of external environment. PESTLE of
Volkswagen can be better understood by the following points:
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(Source: Steyn, 2014) Political factors: Due to operating of countries at present firm is facing lot of political
issues. Company is responsible to follow rules and operate as set by the government
(Business Strategy, 2017). So before staring and doing expansion of business activities in
another country it is very necessary to first evaluate the impact of political elements on
business process. Economic factors: Bank rate, wage rate, inflation and deflation rate exist in the market,
income level of customers all come under the economic factor. For example if different
banks increase the rate of loans than this will create hurdle in the expansion of firm's
operation because now company has to pay a more interest (Dandira 2011). On the other
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Illustration 2: Pestle Analysis

hand decrease rate of interest will influence the top managers to expand business
activities in new areas. Social factors: Lifestyle, spending patterns of customers and various trends exist in the
market all this come under the category of social factors. All this affect the purchasing
process of individuals. Increasing usage of technological products is positively increasing
the sale of Volkswagen. Technological factors: For increase the sale of products and to capture a larger market
share it is very necessary for every enterprise to adopt the new technology. Customers
like updated and new products. Adoption of new technology decrease the cost of firm's
operation and increase the efficiency. Legal factors: Rules and regulations of every country come under the legal factors.
Sometimes these also serve as an obstacle in the functioning of firm.
 Environmental factors: Every firm is responsible to use effective process to make
products for not to harm the environment. So for running smoothly it is very important
for the Volkswagen to make environmental friendly products (Bucolo and Matthews,
2011). For this quality raw materials and effective process can be used by the firm.
All these are the main external or macro factors which can affect the activities of an
enterprise. So all these should be evaluate by the managers of Volkswagen can effectively
expand its business activities in other countries. By doing this, firm can add necessary features in
the product to attract large number of customers and gain higher large market share than its rivals
(Elhamma and Zhang 2013).
2.3 Importance of stakeholder analysis for formulating new strategy for the business
Volkswagen produce variety of automotive products to satisfy the different needs and
wants of customers. Stakeholders are the group of people which provide their support and
resources for achieving success (Business Strategy, 2017). Employees, customers, managers and
suppliers all come under this. Analysis of stakeholder is a process identifying their contribution
in the success of enterprise. One of the main advantage of doing this it provide support to top
managers in deciding future activities of business (Bucolo and Matthews, 2011). This analysis
guide what decision and actions should be taken by the firm and what modifications should be
done in the current product for making it more attractive.
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Further, this helps managers in identifying the expectations of stakeholders from firm. It
is necessary to satisfy the needs of stakeholders for getting their support in future activities of
business. By this, firm can earn the trust of its stakeholders and capture a larger market share.
2.4 Strategy for an enterprise
Due to increasing concern about environment it become more necessary for the firms to
produce and offer environmental friendly products to large number of customers. In United
Kingdom government make it compulsory for automobile companies to produce environmental
friendly cars because of increasing amount of pollution in water and air. Cars producing more
pollution are restricted. This is done by the government to decrease the amount of contamination
and safe air and water (Butler, 2012). Earlier these type of cars was made by the Volkswagen but
after the reveal of this fact government stop this production and firm done a lot of changes in its
current product. After this, firm started doing production of electronic cars. This was unique and
environment friendly idea. This provide opportunity to the firm to capture a larger market share
by making environment friendly cars. This is effective solution for the issue face by the firm. By
adopting this approach firm can capture a larger market share (Ferreira and et. al., 2011).
TASK 3
3.1 Appropriateness of alternative strategy
For capturing a larger market share and to expand its business activities in various
countries various strategies can be used by the company. Substantive growth strategy: Under this strategy firm expand its activities either
vertically or horizontally for serving more customers. Under this organisation acquire
another firms or merge with it for expanding business operations in other areas (Galpin
and Lee Whittington 2012). Increasing number of business activities increase the profits
of firm. Volkswagen wants to expand its business activities by introducing the concept
of electronic cars. Limited growth: Under this strategy various tactics are used by the firm for achieving the
set target. Innovation, product development, penetration and other concepts are used by
the firm under this. In the case of Volkswagen, concept of innovation can be used by the
organisation by introducing an electronic car (Dandira, 2011). For getting support
facilities and large number of resources strategy of joint venture can be used by the firm.
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In joint venture two companies start work together for achieving the business objectives.
Main advantage of this strategy is this increase the resources required for effectively
implementing the strategy.
 Retrenchment: This is one of the effective approach, under this top managers evaluate
all the profitability and effectiveness of all products made the company. After that
company delete the products which are not producing effective results (Elhamma and
Zhang, 2013). One of the biggest advantage of this strategy is that it save a lot of
unnecessary cost of the firm. This cost can be save by thee Volkswagen in others
profitable venture for getting high return on investment. Basically strategy of
retrenchment is divided into three categories called revenue's generation, assets reduction
and cost reduction (Goll and Rasheed 2011).
(Source: Marketing strategy, 2017).
As per the case study, Volkswagen should use the limited growth strategy as presently firm
have two ventures in china. Under this various and effective tactics can be used by the
organisation for influencing more customers towards its product and to achieve a better position
than its rivals.
3.2 Justification of strategy
At per the case study Volkswagen is facing a number of issues which are creating
unnecessary problems. So not to face these kinds of issues in future and to capture a larger
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Illustration 3: Marketing strategies

market share it is very necessary for the Volkswagen to use an effective strategy (Hall and
Wagner 2012). For making better and quality products it will be beneficial for the firm to use
engines of better quality while making electronic based cars. United Kingdom is facing a lot of
environmental issues like huge amount of pollution. For solving this problem various top and
legal authorities are investigating which process and method should be used by the companies
for making environmental friendly cars. Before launching a new product at big level various tests
are done by the government to test how friendly a car is.
Further, for getting long term advantage all rules and regulations set by the government
should be followed by the firms (Galpin and Lee Whittington, 2012). By doing this company can
attract more number of customers towards its product and can capture a larger market share.
Further by using effective process for making products efficiency can be achieved by the
company.
TASK 4
4.1 Roles and responsibilities of personnel included the implementation of strategy
Adoption or implementation of new methods for completing various tasks of a business
enterprise is knows as strategy implementation. Reason behind doing is to increase the market
share of firm and to achieve competitive advantage. Employees and their support play a big role
in effectively implementing the new strategy. Without their support effective implementation is
not possible. For this a written plan should be made by the firm and effective communication
should be used by the company for clear all roles and responsibilities of employees. For
achieving desired results it is necessary for the employees to give their full support during the
process of strategy implementation (Goll and Rasheed, 2011). Main roles and responsibilities of
personnel; can be understand by the following points:
Managers: Effective role is played by the manager in the process of strategy
implementation. These are the one who make a written plan and include all the necessary steps
required to implement the plan. Managers not only identify the resources required for
implementing the strategy but also collect them. Function of recruitment is also done by them.
Further evaluation of all activities done by employees and conduct training or development
programme for workers, all this done by the managers. Moreover, main responsibilities of
managers can be better understood by the following points:
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 Managers are the one who identify the trends exist in the market and do the necessary
changes accordingly. They use various type of incentives called monetary and non-monetary for motivating
the workers to do their best.
Employees: Subordinates are the essential element of strategy implementation because
these are the one work on the new methods introduced by the managers. These are the one who
make final service and product for large number of individuals (Kalyani and Sahoo 2011). It
comes under the responsibility of employees to identify why the management is introducing
change and give full support to the business.
Engineers: Engineers are the individuals who have some kind of expertise in a field.
They provide support and technical guidance during the whole process of strategy
implementation. With the help of these firm add new features in the product and attract large
number of customers(Moseley 2017).
4.2 Resource required or implementation of strategy
It is very necessary that firm should have all the required resources for effectively
implement the strategy (Murano et. al., 2011). Lack of resources creates unnecessary delays and
increase the cost of business operations. Main resources required for effectively implementing
the strategy can be understood by the following points: Funds: Funds are one of the essential resource required for strategy implementation.
Without proper amount of funds Volkswagen cannot implement the strategy effectively.
For collecting firm can take loan from banks and other financial resources. Fixed resources: Furniture, building and other technical resources are required for
implement the strategy (Ferreira and et. al., 2011).
 Workers: Employees are an essential element of almost every activity of firm. Large
number of skilled capable employees are required for implement the strategy and achieve
better results.
By identifying all the resources required for effectively implementing the strategies volkswagen
can achieve better results.
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4.3 Contribution of SMART objectives for the achievement of strategy implementation
Strategy is an action plan or sequence of steps which help the enterprise in achieve ends
results in a specific manner (Granados and Gupta, 2013). Effective implementation of strategy is
necessary for utilise all the resources of firm and to increase its productivity. For this manager
can make written action plans for increasing effectiveness in the business operations. For making
an effective plan concept of SMART targets can be used by Volkswagen. Smart, measurable,
attainable, realistic and time bound targets helps in achieving efficiency in the business
operations. Top managers are responsible for making and set SMART targets for the firm. Specific: Targets of the strategy implementation should be specific and flexible rather
than rigid (Rahbar and Abdul Wahid 2011). Responsibilities of all workers should be
defined clearly so that confusion can be erase form the mind of workers and grounds of
rising issues can be removed from the workplace. Further effective results can be
achieved by the company. Measurable: Targets of the firm must be measurable. It means profits rise from the
targets can be measured by the enterprise. One of the main benefit of this it help
managers in evaluating the success or failure of strategy implementation (Ferreira and et.
al., 2011). Measurable targets support and motivate the managers. A measurable target of
Volkswagen can be increase sales by 50%. Acceptable: All the set targets of firm should be acceptable in nature. Which means all
the target should be acceptable by the employees and should add effectiveness in various
activities of business (Schaltegger and Wagner 2011). Further acceptability of all
stakeholders is very necessary for getting their support in the process of strategy
implementation. Relevant: Relevant simply means all short term goals and objectives of firm should add
effectiveness to the overall process of enterprise. This ensure the top managers that
project is executing effectively (Hall and Wagner, 2012). For example increase in sale by
50% in next 3 months is link with the financial performance of business.
 Time bound: All the set targets should be time bound. It means a fix time period should
be set by the managers for completing a task. This save the valuable time of firm and help
in achieving efficiency in various operations of business.
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For implement the strategy in an effective way and to achieve the set results it is very
necessary that SMART objectives should be set by the managers of Volkswagen.
CONCLUSION
From the above information, it can be concluded making effective strategies and policies
regarding the future activities of a business is very essential for a firm like Volkswagen. The
report analysed the business plan of LOY auto mobiles which is majorly focusing on launching
cards at affordable prices with comfortable interior. Manager of firm should have detailed
knowledge about the vision, mission and core competencies of the company because all this
largely affect the process of strategic planning. Further, SWOT approach can be used by the firm
to get information about its strengths, weakness, opportunities and threats because this help the
enterprise in planning its future activities and to capture a larger market share. PESTLE can be
used by the managers of firm that how these factors affect the various commercial operations.
Manager should consider the concept of SMART target during the process of making strategies
and its implementation. It is the main responsibility of manager to do planning about the
resources required to effectively implement the strategy and attain its objectives. Manager of
Volkswagen should do the planning about the resources required for implement the strategy and
to achieve its results. Results and set targets cannot achieve by the firm in the absence of support
and commitment of employees. So it is the responsibility of top management to influence the
employees to accept the changes by using monetary and non-monetary incentives.
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