Strategic Planning and Formulation of New Strategies for Business

This HND Business Level 5 assignment on Unit: 7 – Business Strategy requires learners to engage deeply with the strategic planning process over a span of 60 learning hours and 90 self-learning hours. The assignment emphasizes understanding how business missions, visions, objectives, goals, and core competencies guide the formulation of strategic plans (Learning Outcome LO1). Learners must assess these elements' influence on strategic planning, analyze factors to be considered during plan formulation, and evaluate techniques used in developing business strategies. Additionally, the assignment involves formulating new strategies by analyzing a given organization's strategic positioning through organizational audits (LO2), conducting environmental audits, and assessing stakeholder analysis significance. The detailed assessment criteria guide learners to demonstrate their comprehension and analytical skills across these areas.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Objectives, goals, vision and mission of business inform strategic planning.......................1
1.2 Elements to be considered during formulation of strategic plans.........................................2
1.3 Effectiveness of various techniques used during development of business plans................3
TASK 2............................................................................................................................................4
2.1 Strategic positioning of enterprise with the help of organisational audit..............................4
2.2 Environmental audit..............................................................................................................5
2.3 Importance of stakeholder analysis.......................................................................................6
2.4 New strategy for organisation...............................................................................................7
TASK 3............................................................................................................................................7
3.1 Appropriateness of alternative strategy.................................................................................7
3.2 Justification of selected strategy...........................................................................................8
TASK 4............................................................................................................................................8
4.1 Roles and responsibilities of personnel during strategy implementation..............................8
4.2 Resources required for implementation of new strategy.......................................................9
4.3 Contribution of SMART targets in achieve objectives of strategy implementation...........10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy mainly refers to the long term planning done by managers in order to
achieve predetermined goals and objectives. This indicates the summary of all future actions of
company to fulfil demands of its customers (Granados and Gupta, 2013). Main feature of
effective business strategy is that it helps business in utilising all its resources and help in
achieving efficiency in the production process. Before formulating a strategy for business, it is
essential for the manager to first identify and analyse the needs of its customers and stakeholders
as fulfilment of needs of these is essential to achieve success of business. Volkswagen, one of the
biggest manufacturers of automobile is chosen in this report for study. Significance of
stakeholder analysis and roles and responsibilities of employees during process of strategy
implementation are all detailed in this report. Contribution of SMART objectives in achievement
of business objectives is all mentioned under this.
TASK 1
Covered in PPT
TASK 2
2.1 Strategic positioning of enterprise with the help of organisational audit
Organisational audit is known as the procedure under which manager evaluate various
activities of firm in order to achieve goals and to better satisfy the needs of its customers
(Alsudiri, Al-Karaghouli and Eldabi, 2013). One of the main feature of this is that it help
manager in collect information about various aspects such as strengths and weakness of
company. For this SWOT analysis can be used by the managers of Volkswagen.
Strengths: Capabilities of firm which help in get competitive advantage in market is known as
strengths of firm. Identification of these is very essential as manager can use it to capture a larger
market share. Main strengths of Volkswagen are:
 Company use an effective approach for undertake it production which help enterprise in
maintain the quality and also attract large number of customers. Presently operations of company are expanded in various areas which help enterprise in
generate large amount of profits every year.
Weakness:
 Lack of sills of employees working in Volkswagen negatively affect the business
operations.
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 Increase number of competitors.
Opportunities:
 Increasing tend of technological products give an opportunity to enterprise to make and
offer innovative products to its customers. Further, variation in needs and requirement of customers provide a platform to company
to add new features in its product.
Threats:
 As automobile industry has high rate of growth than it attract number of participants
which serve a biggest threat to company.
 Changes in government and its policies negatively affect the business activities and
decision making process of enterprise.
2.2 Environmental audit
Environmental audit is known as the process under which manager first identify the
various factors exist in business environment and study impact of those elements on decision
making process of company. All this help manager in formulate effective policies for business
operations. PESTLE approach can be used by the managers of Volkswagen to determine the
impact of external elements on business activities: Political factors: Political stability in a country and various rules, regulation and policies
formulate by government in order to maintain economic growth of country is come under
this. As Volkswagen is operating on an international level so different norms and rules of
various countries affect the marketing decision of company (Azar, 2011). To achieve set
goals and objectives all these factors must be study by the manager of company. Economic elements: This include the various elements such as inflation rate, deflation
rate and exchange rate which affect the operations of a company. For example: If
government increase the tax rate of firms than this will negatively affect the expansion
activities of Volkswagen. Social factors: Various factors such as attitudes, beliefs, interest and behaviour of target
customers come under this. Any variation in these factors must be consider by the m
managers to make products as per the requirements of customers. Technological elements: Technology used by enterprise for undertake production of
products play a big role and largely affect the success of company. It is very essential for
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Volkswagen to use updated technology and offer variety of features in company's
product. Legal factors: Government of every country formulate some rules to control business
activities of companies. Whenever an enterprise decide to start its business operations in
that country than it become liable to follow those rules and all this affect the variety of
products a company offer to its customers.
 Environmental factors: Due to increase awareness among customers related with safety
of environment every enterprise is liable use good quality raw materials in production
process.
All these are the main macro factors, by evaluate all these manager can identify the current
position of Volkswagen in market.
2.3 Importance of stakeholder analysis
Stakeholder analysis is the process in which manager review the impact of stakeholder
and its activities on business activities. This is now become more important because employees,
communities, customers, business partners and shareholders all have become an essential pat of
business success. Now it is need of every country to identify and understand the requirement of
each stakeholder and than formulate business strategies in order to meet them during business
operations. One of the main reason why this study is important, is secure this give shape or
direction marketing strategies of company (Bucolo and Matthews, 2011). For this marketer can
conduct market research to learn more about motives and needs of its target customers. If
company give credence to the needs of customers in its stakeholder analysis than it affect the
promotion and product development activities of company. Analyse the role of workers in
enterprise help in increase their satisfaction and productivity. Main key elements of this
employee assessment are its morale and satisfaction. Understanding the needs of employees help
enterprise in motivate them, which increase their productivity and output. One of the main
feature which increase the importance of stakeholder analysis is it help manager in create and
maintain good relationship with suppliers which help company in deliver best quality products to
its customers (Hall and Wagner, 2012). Stakeholder analysis help enterprise in execute big
projects effectively. By fulfil needs of stakeholders company can get their support and loyalty
for long term. Further, collected information help manager in formulate effective strategies and
business plans or company and help in attain predetermined objectives of company.
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2.4 New strategy for organisation
To save environment, government of UK formulated various laws and make it
compulsory for business enterprise to use good quality raw material to produce final products for
its customers. Further government has formulate various policies due to increase amount of
pollution in water and air. Vehicles which produce huge amount of pollution are restricted in
UK. Government take this initiative due to increase amount of contamination in water and air
and to decrease the amount of this in environment (Bucolo and Matthews, 2011). Earlier,
Volkswagen made the cars which produce high amount of pollution in air and water and after
this fact come before government banned the production to save the environment. After that to
attract more number of customers and to capture a large market share firm introduce various
specific features in its product. Firm start undertake the production of electronic cars, this idea
attract more customers as ideas of firm is unique. Production of electronic cars offer variety of
benefits to firm. As per the current business condition of Volkswagen this is best solution for
company.
The Volkswagen formulates the new strategy and that is related to the New Product.
Through this kind of strategy this firm produce the new products or cars which will be pollution
free and also with the new or unique features. It is an effective strategy in order to increasing the
sales of company.
TASK 3
3.1 Appropriateness of alternative strategy
Selection of appropriate strategy is essential by business in order to achieve its pre
determined goals and objective. Main strategies which can be used by Volkswagen can be better
understood by following points: Substantive growth strategy: Under this strategy managers make business plans to
expand business operations in other non covered areas. Company expand its activities
either vertically or horizontally. In this, Volkswagen can either acquire one firm or can
merge with another company in order to expand business activities. This contribute in
growth of company and increase of its profits. Company can generate more amount of
revenues by introduce the concept of electronic cars. Limited growth: Under this strategy, manager produce and use different tactics to
achieve its target. Main tactics which can be used by Volkswagen are market penetration,
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innovation and product development (Butler, 2012). Innovation is a concept used by
Volkswagen to introduce concept of electronic cars. For better implement the concept of
innovation company can go for joint venture as this will help firm ad provide all
necessary resources and support require to implement the concept of innovation.
 Retrenchment: Under this strategy of manager first identify the main products sold by
firm to its customers. After that manager analyse the or calculate the profits generated by
each other and deleted those products which does not produce any kind of profits for
company. One of the main advantage of this strategy is that it save huge amount of
enterprise and help managers in invest the same amount in other profitable ventures.
3.2 Justification of selected strategy
Volkswagen faced various issues due to production of pollution vehicles and all this
increase complexity of business in execute its activities. In order to decrease the negative impact
of all these and not to face the same situation in future it is very essential for choose a best and
effective strategy. This problem can be solve by firm with the help of undertake production of
electronic cars. Due to high amount of contamination in water and air UK is already facing lot of
environmental problems (Dandira, 2011). To identify solution of this problem top authorities can
conduct research in order to find out the best method which must be chosen by company. To
maintain the environment government first test the features of product and than give permission
to enterprise for its production. To increase acceptability of product in market it is very important
for Volkswagen to produce products as per the standards and rules of government. By this,
company can attract large number of customers towards it and can capture a larger market share.
TASK 4
4.1 Roles and responsibilities of personnel during strategy implementation
Strategy implementation is a process under which manager execute various operations
and take business actions to achieve predetermined goals and objectives. For formulate a
business effective strategy manager collect information from various sources such as feedback of
customers, data collected from various survey, research and many more. Formulation of an
effective strategy is not essential but implementation of that strategy is also essential to achieve
set objectives and targets. This ensure attainment of company's objectives and ensure optimum
utilisation of all resources. Employees of enterprise play a big role in effective implementation of
strategy. From top level managers to lower level workers all play a significant role in process of
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strategy implementation. It is very essential that there must be effective communication channel
in company so all workers can better understand their roles and responsibilities. Main
responsibilities of a manager during strategy implementation can be better understood by
following points:
 It is one of the main responsibility of manager to use different tools and techniques
during strategy implementation to motivate them to give their best.
 Managers is the one who conduct research to identify the main trends exist in market and
than introduce require changes in production process.
 Managers is the one who first identify the resources required to implement the strategy
and than allocate resources and make budgets of various department working in
enterprise.
 Manager formulate strategy and give shape to policies to ensure effective execution of
various business activities.
Employees: Today workers are known as one of the important and most valuable assets
of every enterprise. These are the one who undertake production process and make final products
for large number of customer as per their specific requirement (Elhamma and Zhang, 2013) .
These are the one who play a big role in enterprise especially at the time of strategy
implementation. To increase the contribution of employees in organisation success it is
responsibility of manager to supply them adequate information so they can give direction to its
business activities.
Engineers: These are those individuals who provide technical guidance and their
specialised skills to enterprise during implementation of strategy. This help company in handle
technical equipments.
4.2 Resources required for implementation of new strategy
Implementation of strategy largely affect the success of a company. Effectiveness
implementation leads to affect the business in a positive way. But implementation of strategy
required lot of resources such as technical, human resource, financial resources and many more
(Galpin and Lee Whittington, 2012). It is very essential that Volkswagen should have all the
resources required to implement the strategy to achieve objectives of strategy. Main resources
required for implementation of strategy include the following:
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 Financial resource: An enterprise cannot achieve execute any operation without funds.
Funds are known as blood of every company without which a company cannot exist. It is
very essential that firms should have required resources to perform business activities
because lack or shortage of funds create unnecessary delays in execution of company's
activity. Fixed resources: This include the resources such as building, furniture, equipments and
other assets required to implement the strategy. Lack of fixed resources affect the quality
of business operations in negative way.
 Workers: employees play a big role in success of every enterprise. These are the one who
provide their support to enterprise during implementation of strategy. Skilled employees
are required to execute operations of business in an effective way.
All these are the main resources required for effective implementation of strategy. It is very
important that Volkswagen should have these resources to implement the strategy.
4.3 Contribution of SMART targets in achieve objectives of strategy implementation
Execution of various business activities in order to achieve end results or goals of
business is known as strategy implementation (Goll and Rasheed,2011). Various efforts are done
by manager to ensure effective implementation of various business operations. Concept of
SMART objective is the aspect which can be used by the managers of Volkswagen to achieve
effective implementation of strategy. SMART refers to specific, measurable, attainable, realistic
and time bound objectives for company. One of the main advantage of this concept is that it help
in maximum utilise all resources of company and also help enterprise in achieve efficiency in its
production process. Specific: This simply means that end goals or targets of firm must be specific. Main
feature of specific objectives is that it help continuously help and guide manager to end
goals of company.
Eg- If the goals of company and time achieving time period will be specific to
employees, then they will work properly and achieve set target in given time period. Measurable: It means that end results and goals of company must be measurable in
nature. It help manager in evaluate the effectiveness of strategy used by business.
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 Acceptable: Set targets and objectives of firm must be acceptable by all stakeholders and
customers in order to get their support during business operations. All this enhance
productivity of employees and increase their satisfaction towards their job. Relevant: This simply means that all ends targets of company must be something which
add values to the overall activity of business.
 Time bound: Manager of firm should set the time limit in which every task need to be
completed. Main advantage of time bound goals is that it save cost and time of enterprise.
For an example- Company has to achieve its target in 6 months, so in this case manager
should give the specific time period to its employees so that they can achieve target in given time
period.
Overall concept of SMART objectives help manager in allocate resources so they can be utilise
at their optimum level and can maintain the quality of products offer to its customers.
CONCLUSION
From the above information it can be summarised that formulation of an effective
strategy must be done by the managers of Volkswagen in order to achieve its objectives. This
can be done by manager by identify the various factors exist in business environment and by
consider the needs and requirements of stakeholders. Various elements such as vision, mission
and objectives of enterprise largely affect the strategic planning of company so all these must be
consider by manager. Manager of Volkswagen can conduct environmental analysis of company
with the help of PESTLE analysis and by this he can formulate effective plans for future
activities of company. Employees of company play a big role especially at the time of strategy
implementation so effective communication should be used managers to clear roles and
responsibilities of employees. It is very important that firm should have all resources required
during implementation of various activities of business.
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