Business Strategy Report: Volkswagen Analysis, HND Business, Sem 1

This report provides a comprehensive analysis of Volkswagen's business strategy, encompassing various crucial aspects of strategic planning and implementation. The report begins with an introduction to business strategy and its significance, followed by an assessment of Volkswagen's mission, vision, goals, objectives, and core competencies. Task 1 focuses on the process of formulating strategic plans, evaluating elements like industry factors, competition, strengths, and weaknesses. It also evaluates techniques for developing strategic plans, including the Growth-Sharing Matrix (BCG Matrix) and Profit Impact of Market Strategy (PIMS). Task 2 involves the formulation of strategy through an organizational audit using SWOT analysis and an environmental audit using PESTLE analysis. It emphasizes the importance of stakeholder analysis and explores the development of new strategies. The report further delves into strategic evaluation approaches, ascertaining the suitability of alternative strategies and justifying the strategy selection. Finally, it analyzes the way of implementing strategy, assessing the roles and responsibilities of personnel, evaluating resource requirements, and calculating the contribution of SMART targets to strategy achievement. The report concludes with a summary of the findings and references used.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Task 1: Process of formulating strategic Plans................................................................................1
1.1 Assessment of mission vision goals, objectives, and core competencies of Hungry house. 1
Mission........................................................................................................................................1
1.2 Elements to be considered while developing strategic plans................................................2
1.3 Evaluating the techniques for developing strategic plans for Hungry..................................3
Task-2 Formulating strategy ...........................................................................................................5
2.1 AN organisation audit for Volkswagen (VW)......................................................................5
2.2 conducting environmental audit for Volkswagen.................................................................6
2.3 Importance of stakeholder analysis in framing stratergy......................................................8
2.4 Developing new strategy for Volkswagen..........................................................................10
3. Strategic evaluation approaches................................................................................................11
3.1 Ascertaining the suitability of alternative strategies in relation to growth or retrenchment
for Volkswagen.........................................................................................................................11
3.2 Justifying the strategy selection .........................................................................................13
4. Analysing the way of implementing strategy............................................................................13
4.1 Assessment of roles and responsibilities of personnel in implementing strategy...............13
4.2 Evaluating the resource requirement in implementation of strategy..................................14
4.3 Calculating the contribution of SMART target to strategy achievement and
implementation in Volkswagen.................................................................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business strategy refers to designing of long term plans by
company to achieve its goals and objectives. Business strategy can also
be defined as the process of analysing mission, vision, goals and
objectives of the firm. Business strategy helps organisation in providing
direction in order to achieve its aim and objectives. It has a crucial role
to play in organisation as without proper guidance, company will not be
able to work smoothly.
The purpose of the study is to suggest effective strategic planning
for the Volkswagen company. Volkswagen is the leading organisation
dealing in Auto mobile sector. The study will include various processes
involved in strategy planning and implementation. The report will also
include the significance and influence of various people on organisation.
Task 1: Process of formulating strategic Plans
1.1 Assessment of mission vision goals, objectives, and core
competencies of Hungry House.
Mission
Mission is a statement that defines the purpose of establishment of a
particular firm. It helps organisation in analysing various the demand
and supply of product and services that the company is going to offer.
Mission statement of Volkswagen that contributes in strategic planning
are;
 To produce and deliver attractive, safe, luxury, safe and
environmental friendly vehicles.
 To expand its core business
 To earn higher profit.
 To gain high market share.
 To establish worlds standard in respective industry.
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Vision
Vision statement can be considered as the road map of any company. It
indicates what company wants to become and what position the firm
wants to achieve in the future, it helps in providing guidance by building
platform for growth of the firm.
Vision statement of Volkswagen
To become the top-rated auto mobile industry. Its mission is to have
focus on positioning as a international and economic as well as
environmental leader among auto mobile manufacturer. To be most
successful fascinating and sustainable auto maker.
Goals and objectives
The goals and objectives describes the target that the
company has to achieve throughout the year.
The objective and goal of the firm are:
1. To stand as winner in auto mobile industry.
2. To grow its business.
3. To introduce more services.
Core competencies
Core competencies refers to the skills that assist business in
gaining competitive advantage. The core competencies of Volkswagen
sales and marketing strategy. The organisation serves unique portfolio of
goods that is made up of successful brand that attracts customer.
Innovative skills has helped company in distinguishing their products and
services from that of competitors. Multi brand structure.
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1.2 Elements to be considered while developing strategic plans.
1. Factors related to industry-In planning strategy various
elements are needed to be analysed. These elements include
growth, competitive strength, profitability, market entrance etc. As
these elements may have great effect on its working.
2. Competition element: Examining the competitor’s position is
important part that need special attention while framing strategy
as this part may have great impact on survival of firm. The reasons
behind the success of any organisation is its understanding about
the competition in market and knowledge about its competitors.
3. Strength and weakness: Before planning or framing strategy
company should use swot analysis method in order to get
information about its strengths and weaknesses as this will assist
the firm in developing accurate strategy. In addition to this
appropriate strategy will help firm in reducing its weakness and
gaining competitive advantage.
1.3 Evaluating the Techniques for developing strategic plans for
Volkswagen
There are two techniques that can be used by Volkswagen which are:
Growth sharing matrix: This matrix has been created in order to assist
firm in long term strategical planning which will aid business in analysing
growth opportunities. These opportunities can be examined by
overviewing the products' portfolio and determining the field for
investment,etc.
It considers that firm’s business unit can be classified into 4 categories
which is based on combination growth of market share and market. (Sia
and Weill 2016.)
On the basic of this matrix various situation faced by company can be
analysed.
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1. Stars: This star symbol in BCG matrix shows high market share and
full growth. The company is placed in star situation when it is generating
large amount of cash due to their larger market share and high growth
they have to bear large amount of cash. In this case the company make
efforts to maintain its larger share in market then it can place itself in
the position of cash cow and can generate cash revenue.
2.Question marks-in this situation the firm consumes large amount of
cash and captures growth rapidly but the firm in this case is unable to
generate high revenues due to their low market share. This position
provides opportunity to company to transform themselves and take
place themselves in star position and further firm can convert their
situation in position of cash cow.
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Illustration 1: BCG Matrix
Source:
(http://http://www.smartinsights.com/
marketing-planning/marketing-
models/use-bcg-matrix/ )

3.Cash cows-In this situation the organisations, by investing little
amount of cash, generate large amount of profit. This enables firm to
fulfilled their requirement of cash and change their positions from
question mark to leaders on market and to recover the firms
administrative cost, to increase profits to be paid as dividend to their
shareholders etc. This situation allows the company to maintain its cash
flows.
4.Dogs-In this situation firm has low market share and low market
growth. This is a situation where company neither earn revenue During
this period company should decide to shut down their business and
should decide to start new business.
The advantages of BCG matrix for company are:
1. It helps the company in selecting investment criteria.
2. BCG matrix assist company in analysing the need to focus on new
business.
The disadvantages of BCG matrix for the company are:
1.It eliminates synergies effect among various units of business.
2.Market growth is not only the element that states market
attractiveness.
3.The company can earn revenue even more than cash cows.
4.Sometimes firm can earn higher profits with low share of market.
Profit impact of market strategy
It is performance improvement technique which helps the firm in
increasing profit margins and will assist firm in becoming market leader.
This strategy will assist Volkswagen in improving its market share and
enhancing profitability by considering following factors such as
organisation environment, activities related to operation, strategic
development etc.
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Task-2 Formulating strategy
2.1 Organisation audit for Volkswagen (VW)
SWOT analysis technique can be used for conducting organizational
audit for Volkswagen (VW).
Strengths of Volkswagen
1. The Volkswagen is leading
company in auto mobile
industries.
2. Joint venture strategy has
helped the company in
expanding its business.
3. Exploring new market and
developing innovative
product.
4. Bringing new concepts and
strategy in auto mobile
industry.
Weaknesses
1. Improper marketing
strategy.
2. Lack of competency in
introducing battery
operated vehicle.
3. The company was unable
to expand its market
share in UK.
4. The firm has little
expertise in auto mobile
industry.
Opportunities
1. As the inflation in prices of
fuels, taking advantage of
this company can charge
high price for their products
and services and can earn
profits.
Threats
1.Growing competition.
2.Laws and regulations related to
vehicles
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2. There in demand of battery
operated vehicle, the
organization has opportunity
to launch such vehicles.
By analyzing the strength and external opportunities it has been
concluded that the company has potential to grow and has competitive
advantage but for further growth company need to focus on enhancing
sustainability and should take efforts to increase effectiveness.
2.2 Conducting environmental audit for Volkswagen
PESTLE analysis technique is being used for conducting environmental
audit for company Political Factors
Volkswagens is serving their product and services in foreign market,
various factors may have influence on the company's working. Such
various elements are government policies and regulation, taxes,
legislation etc. In order to eliminate or reduce the effect of these factors
firm should develop more innovative product in order to gain competitive
advantage. The firm should develop the vehicles keeping in
consideration various political and legal factors.
Economic factors
As company is operating in various countries and people belonging to
various places have different choices, demand, difference in income,
people belonging to different culture and have various beliefs, these
factors may have influence on business operation. Operating in different
country includes high risk and these risks are associated with these
elements. The two elements that have contributed to success of
Volkswagen are diversification and globalisation.
Social factors:
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The social elements include behaviour of consumer, population etc.
Social changes have direct effect on the revenue, growth and profit
capacity of firm. To meet such social changes, to focus on operational
activities and to enhance its performance the firm has adopted various
policies and strategies.
Technological factors:
The product produce by two companies may be same but difference
may lie in the technology used by the company in manufacturing
product. The technology plays vital role in innovating and improving
quality and features of products.
In order to gain share in market the company has to focus on use of
advance technology in order to achieve efficiency in its operational
activities. The company by making effective use of technology can gain
the position of market leader.
Legal factors:
various factors include government policies and laws have direct
influence on the working performance of the Volkswagen.
Environmental factors:
various environmental factors include climate, availability of resources,
environmental laws etc. have direct impact on the firm. These elements
may result in additional cost to firm. In order to eliminate effect of these
factors the Volkswagen company has decided to focus on its
responsibilities towards society. The company is adopting various ways
to satisfy the need of stakeholder and society, the firm is contributing to
reduce the waste produced produced during manufacturing process, and
recycling waste in order to prevent environmental pollution.(Yaoand
Minner 2017)
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2.3 Importance of stakeholder analysis in framing strategy.
Stakeholders are the person who have direct interest in or those are
directly involved in the various activities carried out by firm. Employees,
shareholder, directors, suppliers etc. these all are the stakeholders.
Stake holder analysis is a technique in order to recognise people those
who are associated with activities carried out by organisations in one or
the other way.
Importance of stakeholder analysis
The stake holder analysis is also essential as it helps in examining and
reviewing the impact of various stakeholders on business and also aids
in judging their importance in various activities. It assists in
understanding the view and peoples reaction about firm. (Madsen,
2016).
There are 4 stages involved in shareholder analysis:
Stage 1 – Identifying the important stakeholders.
The key stakeholders can be identified by considering various factors
such as examining the potential beneficial stakeholders that might have
adverse effect on the company growth, whose support may lead to
company success etc.
Stage 2-Analysing the interest of stakeholders and its impact on
project performance by firm.
This can be achieved by answering various questions such as in which
Project the stakeholder is interested , benefits that stakeholders is
expecting to get from completing the project, the resource the
stakeholder is willing to use in the project.
Once the group of stakeholders is being identified it becomes easy to
examine their interest. But examining the stakeholder interest is another
difficult task to perform for that the Volkswagen company should create
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a stakeholder grid.
The high power will lead to generation of high level of interest of
stakeholder and they will ensure greater efforts to contribute towards
growth of organisation by promoting products and increasing their work
efficiency.
High power and low interest - has direct influence on the strategy. This
situation occurs when the stakeholders are being assigned with same
project repeatedly.
Low power and high interest – These stakeholders who have low power
and have high interest are very important for the company as these
stakeholders may contribute to the success of form and can positively
influence the strategy.
Low power and low interest-These stakeholders have neither contributed
to the success nor they have contribution in company’s activities and
they do not affect organisation in any ways. The company should not
make any efforts to monitor them.
Stage 3. Evaluate significance and impact
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