Business Strategy Report: Analysis of Volkswagen Group's Strategy

This report offers a comprehensive analysis of Volkswagen's business strategy, encompassing organizational audits, environmental assessments, and stakeholder management. It delves into the identification of strategic positions through organizational audits, followed by an environmental audit using the PESTLE framework to address challenges faced by the company. The report also examines stakeholder measures in strategy preparation and proposes a new strategy for Volkswagen. It explores alternative strategies related to market entry, limited growth, and sustainability, ultimately selecting the best strategy for implementation. Furthermore, the report details the roles and responsibilities of personnel in strategy implementation, resource requirements, and the evaluation of SMART targets. The analysis highlights key elements such as SWOT analysis, market growth strategies, and the importance of adapting to technological advancements and environmental considerations. The report concludes with a discussion of how these strategies aim to improve brand image and promote environmentally friendly practices within Volkswagen, ensuring long-term profitability and sustainable growth.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Identification of strategic position with assistance of organizational audit..........................1
2.2 Environmental audit for Volkswagen...................................................................................2
2.3 Measures related with stakeholders in preparing of strategies..............................................3
2.4 New strategy for Volkswagen...............................................................................................4
TASK 3............................................................................................................................................5
3.1 Alternative strategies related to market entry limited growth and sustainability..................5
3.2 Selection of best strategy......................................................................................................6
TASK 4............................................................................................................................................6
4.1 Roles and responsibilities of personnel in strategy implementation....................................6
4.2 Resources requirements for execution of new strategy for VWAG.....................................7
4.3 Evaluation of SMART targets in business strategy..............................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
Books & Journals........................................................................................................................9

INTRODUCTION
Business strategy is described as management of science and art which is related with
cross function decisions in order to attain long terms goals and objectives. This is an important
tool in order to evaluate overall performance of business and design a ways where all their goals
and objectives can be achieved. Business strategy is described as the greatest level of managerial
acts. These strategy are approved by higher level of authorities at work place. It is very useful in
providing direction to employees so they can do their performance in desired ways in order to
achieve their overall targets (Astrachan, 2010). It helps in bringing stability at work place in
order to establish positive working environment. Strategy are very important element for every
business in order to increase their finance and achieve their designed long term goals.
Volkswagen also uses different types of business strategy in order to ensure smooth running of
their business activities and helps in gaining ling term profitability. If business faces any problem
it can easily be resolved with the help of implementing effective strategy. The report contains
study about various strategic planning and implementation of strategy at work place. Tools and
techniques which can be used for evaluation of strategy and last selection and implementation of
best and effective strategy.
TASK 1
Covered in PPT
TASK 2
2.1 Identification of strategic position with assistance of organizational audit
Each business is focusing on making plans which helps them to evaluate those factors in
environment which does not let them achieve success in their ventures. Internal audits are useful
tools in order to analyse all difficulties which are faced by business in their ventures. If firms
focuses on achievement of effectual plans and strategies then they can attain higher level of
success in economy. Workers are given rights to monitor and keep record of all the operations
which are performed by them in order to maintain healthy relations with employees. Marketing
strategies are adopted in order to achieve higher positions at market place and stakeholders who
are involved in business operations can achieve success in their ventures (Burlton, 2010).
SWOT analyses are important tool in order to analyse internal and external factors which
are affecting their performance. In order to fight with all type of difficulties plans and strategies
can be formulated in order to attain success.
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STRENGTH
They are given chance in order to expand their
overall business operations in economy at
national and international areas.
They are able to gain higher market shares and
profitability ratios.
They are achieving success in their ventures as
they have profitability and revenues are
constantly increasing (Campbell, Edgar and
Stonehouse, 2011).
Operations of business can be expanded by
adopting different type of social measures.
WEAKNESS
They have left with old model of cars in large
amount as there is up-gradation in technologies
and people are not willing to buy them. This
results in descending their profitability.
There pricing structures are policies are
disturbed to a greater level (Scholes, 2015).
Plans and strategies should be developed in
order to gain strong positions at market places.
OPPORTUNITIES
These business are having higher chances in
order to make their operations expand at
national and international areas.
They can easily make entry into new segments.
Changes can be implemented in manufacturing
process by adopted new technologies to
develop new model of cars.
THREATS
They are facing heavy loss in their profitability
as they are having stock which is unsold.
Plans should be made in order to develop
strategies to analyse needs of customers and
develop products accordingly (Cinquini and
Tenucci, 2010).
2.2 Environmental audit for Volkswagen
There was problem faced by business in 2015 as the cars which were developed by them
were having issue in their engines as they were eliminating smoke in larger amount. This has
affected natural environment and also health of humans. This problem was not identified by
firms as they were not aware of such type of issues nor they have done any test drive. The
mangers became aware were there was decrease in sales ratios and people were making
complains about difficulties faced by them (Verbeke, 2013). There was need to resolve issues by
developing effective strategies in order to build positive image and increase probability and sales
ratios.
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Strategies should be made by conducting environmental audits as it is the most effective
tools to solve issues that are faced by auto mobile industry like Volkswagen.
PESTLE framework are evaluated as:
Political environment: The cited firms can achieve success in expanding their business
activities as they had to pay less tariffs, exercise duties and taxes because they are dealing in auto
mobile sectors. This helps in saving their cost factors thus they can achieve higher profitability
ratios (Scholes, 2015). Government is giving heavy discounts to firms dealing in auto-mobile in
order to promote their business at higher scales.
Economic Environment: Plans and strategies should be formulated in order to diversify
business activities and achieve higher economies of scales in economy. There should not be
underutilisation of resources as it crates problem for economy.
Social environment: The major types of social aspects are linked with all the
environmental factors which are valuable in shaping behavioural aspects of consumers, buying
preferences of customers in order to develop cars according to taste and buying preferences of
clients.
Technological changes: This factor is related with manufacturing goods according to
technological advancement in order to manufacture cars according to taste and preferences of
customers. This is valuable in increasing profitability ratios of firms ( Dong-Hun 2010). There
should be efficiency and effectiveness in work process by developing new accessories which can
be executed in new models of cars.
Environmental aspects: The business should consider environmental aspects in their
ventures so they will not affect their business operations like cars should emit low smokes and
making efforts in order to develop green and environmental friendly cars.
Legal Environment: It consist of current legislation plans and policies which are
affecting their business operations. This factor is much similar to political aspects but they also
contains legal beetles which comprises of trademarks. There should be policies formulated in
order to make their firms achieve competitive gains (Eccles and Krzus, 2010). They should also
focus on establishing good brand image for their products.
2.3 Measures related with stakeholders in preparing of strategies
Stakeholders are most essential elements who are working in order to achieve
predetermined aims and objectives in effectual ways in order to achieve success. Formulation of
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business strategies helps in achievement of both long and short term objectives. These persons
formulate plans in order to identify present needs of customers at market place and develop
products accordingly in order to their needs and wants. This is vital for firms if they wants to
execute their operations at domestic and international areas. Research activities are valuable in
identifying choices and preferences of clients this helps in gaining competitive benefit. The cited
firms are using matrix policies because it is valuable in identifying needs and wants of clients
who are involved in business operations (Reinhardt and Stavins, 2010).
Value of stakeholder analysis are evaluated as:
These stakeholders are involving themselves in making effective plans which results in
establishing CSR at business organisations.
Strategies are made in order to analyse current marketing positions of firms thus
achievement of competitive advantages.
All plans and policies are determined in order to evaluate current conditions at market
place so that they can easily achieve competition from their rivalry business.
Plans are essential for every business in order to run their operations effective and
maintaining coordination between every department so that activities are results in positive
outcomes.
Strategies are beneficial in providing direction to employees in which they will execute
their activities and achieve desired targets.
2.4 New strategy for Volkswagen
Business strategy are important element for every firms as it helps in providing direction
in which business will execute their operations in planned and effectual ways. This results in
increasing their profitability and productivity ratios (Hahn, Kolk and Winn, 2010). The new
strategy which are designed for business are based on stakeholders who are involved in business
operations and targeting of new areas to sell their products in market.
The new strategy are formulated as they had spoiled their current positions at market
areas thus they have to make plans in order to improve them.
First step is to mapping of stakeholders so they can easily evaluate demand of clients at
market areas. This can be achievable with help of Maslow theory as it contains needs of different
groups in economy. Firms have to plan strategies in order to fulfil necessitate of all customers.
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Stakeholders can formulate strategies in order to expand their operations at various level
in economy and offering quality models of cars to clients. This is possible if management
focuses on gaining trust of their employees and provide them goods according to technology
advancement and pollution free cars (Woodcock, Green and Starkey, 2011).
Market growth strategies are beneficial for firms in order to evaluate those areas at
market places where their business activities can be easily expanded (Haley, Haley and Tan,
2011). This factor is valuable in order to gain competencies by developing products which are
environmental friendly. All these elements are taken as base in order to work according to
designed pattern and attain growth (Pagani, 2013).
These are new strategies which can be implemented by Volkswagen in order to improve
their brand images and manufacture environmental friendly cars.
TASK 3
3.1 Alternative strategies related to market entry limited growth and sustainability
The different type of strategies which are used by Volkswagen are helpful for
management in order to formulate plans which are useful for their operations. They are focusing
on formulating those plans which helps in achievement of growth and development for their
business.
Market entry: Firms are mainly focusing on achieving target customers who will use
their goods and services in effective and planned ways. This can be possible with expanding their
operations at national at international levels so that customers can easily purchase goods. This is
valuable for them in order to earn high profitability.
Sustainable growth: Company had to adopt effective pricing policy at market place
which helps them to gain target customers which will buy their cars. This helps in gaining
attention of customers which results in increasing profitability and revenues ratios. It is related
with merger and acquisition (Li and Tan, 2013). These strategies are mostly used when there are
sufficient resources to invest in business operations.
Limited growth strategies- This strategy is mainly used by those business who are not
having sufficient amount of money to invest in their business operations. This is the most
effective strategies which are used by Volkswagen in order to enhance their performance
standards. Cited firms have adopted joint ventures in order to make entry into new market areas
thus gaining more shares at market places.
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Retrenchment- This is the end stages where company is facing heavy losses thus they
have to sell their assets in order to recover all their debt. In this situations operations of firms had
to be closed thus facing heavy loss. Thus this strategy are not suitable for Volkswagen.
3.2 Selection of best strategy
The best and effective strategies have to be selected by firms which helps them in
attaining success in their business operations. Volkswagen have analysed situations of various
markets in the overall economy (Melville, 2010). They have to design effective plans in order to
add new features in cars so that it can easily satisfy different needs and wants of clients.
The best suitable strategies for Volkswagen are limited growth as it helps in enhancing
their productivity levels thus reducing cost involved in business operations. The resources which
are available in economy are effectively utilised. They have to formulate plans in order to make
entry into new markets and achieve target customers who will buy their products.
The firms are using this strategy in order to gaining high competitive advantage and
increase in their overall market shares. This results in enhancing sales ratios of firms. Business is
mainly focused towards manufacturing those goods which are demanded by customers thus
increasing their profitability (Meskendahl, 2010). This results in attaining higher growth in
economy. They are mainly targeting those customers who will buy their products and results in
increasing profitability for business. This is the most effective strategy as it helps in increasing
growth factors for firms. Thus it can be said that it is the most effective strategy which helps in
enhancing productivity ratios.
TASK 4
4.1 Roles and responsibilities of personnel in strategy implementation
There are various individual who are involved in making effective strategies at work
places which results in attainment of higher growth. This results in attaining higher growth level
in economy. If workers show their interest in making effective strategies then it can results in
attaining higher growth and profitability factors.
Strategy can be implemented at work place by these people which are discussed below
as:
Senior authorities: The cited firms are making their higher managers responsible for
making effective strategies. They are monitoring plans in effective ways in order to get good
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results. All authorities who are operating at high levels are involved in making good strategies
which helps in attaining higher success level in economy. They are giving guidance to authorities
who are working at top level in order to execute best strategy.
Top management: They have the sole responsibilities in order to make new and
innovate plans which are beneficial in achieving growth for business (Meskendahl, 2010). They
are providing training to employees in order to work effectively and achieve higher competitive
advantages.
Engineers and research personnel: If firms want to make effective strategies then they
require technical persons who will execute all planned strategies in effective ways. Research and
development activities are beneficial in evaluating needs and wants of clients (Business Strategy,
2017).
4.2 Resources requirements for execution of new strategy for VWAG
If Volkswagen are adopting measures in order to execute effective strategies at work
place then they had to make use of available resources in planned and effective ways. Effective
implementation of resources are valuable in attainment of all long and short term gaols and
objectives. The most important and valuable resources which are needed in implementing
strategies are described as:
Human resource are important departments for every business thus results in attainment
of growth and development in their ventures. Training activities are important for new
employees to make them familiar with working environments and achievement of competitive
gains (Tmithas and Lucas, 2010). The main focus of firms is to recruit skill and technical
employees who will assist in achieving growth for business.
Strategy implementation requires both financial and physical resources in order to
achieve effective results. Physical resources are related with using machinery with advanced
technologies in order to gain effective outputs. Money is needed to carry forward all their
business operations and achievement of competitive gains. The main monetary sources for firms
are shareholders, creditors and money lenders.
4.3 Evaluation of SMART targets in business strategy
Mangers of Volkswagen are facing facing difficulties from various factors which are
operating in business environment. They have to make plans in order to execute SMART goals
and objectives in performing their business operations. This results in achievement of high
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market shares and growth rates. There are various plans and policies adopted in order to enhance
their performance level and develop skills and capabilities of employees (Montgomery, 2011).
SMART objectives should be Specific, Measurable, Attainable, Realistic and Time bound.
Firms are focusing on setting targets for employees in order to enhance their performance
and increase productivity at work places. There should be good coordination among all
departments in order to achieve good results. The main aims and objective of selected firms are
described below as
 Strategy helps in increasing profitability ratios by 30%.
 Increasing number of customers who can use their services and increase profitability
ratios.
 Shareholders should be valued at work places in order to achieve high profitability.
CONCLUSION
From the above report it can be concluded that business strategies are valuable in
achieving competitive advantages of business by making plans which are different from their
rivalry business. Top mangers are exciting plans in order to make employees execute their
working in planned directions in order to achieve targets. Stakeholders are valuable persons
which helps in determining success of business. SWOT and PESTEL analysis are important in
analysing factors which are affecting business operations. SMART objectives are valuable in
completing the assigned task in desired time which are allotted to workers.
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REFERENCES
Books & Journals
Astrachan, J. H., 2010. Strategy in family business: Toward a multidimensional research
agenda.Journal of Family Business Strategy.1(1). pp.6-14.
Burlton, R., 2010. Delivering business strategy through process management. InHandbook on
Business Process Management 2(pp. 5-37). Springer Berlin Heidelberg.
Campbell, D., Edgar, D. and Stonehouse, G., 2011.Business strategy: an introduction. Palgrave
Macmillan.
Cinquini, L. and Tenucci, A., 2010. Strategic management accounting and business strategy: a
loose coupling?.Journal of Accounting & organizational change.6(2). pp.228-259.
Dong-Hun, L., 2010. Korean Consumer & Society: Growing Popularity of Social Media and
Business Strategy.SERI Quarterly.3(4). p.112.
Eccles, R. G. and Krzus, M. P., 2010. Integrated reporting for a sustainable strategy: One Report
has the potential to significantly change how companies operate and investors think,
shifting the focus from that of meeting short-term financial goals to developing a long-
term business strategy that not only makes a commitment to corporate social
responsibility, but also to a sustainable society.Financial executive.26(2). pp.28-33.
Hahn, T., Kolk, A. and Winn, M., 2010. A new future for business? Rethinking management
theory and business strategy. Business & Society. 49(3). pp.385-401.
Haley, G. T., Haley, U. C. and Tan, C., 2011. The Chinese Tao of business: The logic of
successful business strategy. John Wiley & Sons.
Li, Y. and Tan, C. H., 2013. Matching business strategy and CIO characteristics: The impact on
organizational performance. Journal of Business Research. 66(2). pp.248-259.
Melville, N. P., 2010. Information systems innovation for environmental sustainability. MIS
quarterly. 34(1). pp.1-21.
Meskendahl, S., 2010. The influence of business strategy on project portfolio management and
its success—a conceptual framework. International Journal of Project Management.
28(8). pp.807-817.
Meskendahl, S., 2010. The influence of business strategy on project portfolio management and
its success—a conceptual framework.International Journal of Project
Management.28(8). pp.807-817.
Mithas, S. and Lucas, H. C., 2010. What is your digital business strategy?. IT professional.
12(6). pp.4-6.
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Montgomery, C. A. ed., 2011. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media.
Pagani, M., 2013. Digital business strategy and value creation: Framing the dynamic cycle of
control points.Mis Quarterly.37(2). pp.617-632.
Reinhardt, F. L. and Stavins, R. N., 2010. Corporate social responsibility, business strategy, and
the environment.Oxford Review of Economic Policy.26(2). pp.164-181.
Scholes, M.S., 2015.Taxes and business strategy. Prentice Hall.Teece, D.J., 2010. Business
models, business strategy and innovation.Long range planning.43(2). pp.172-194.
Verbeke, A., 2013.International business strategy. Cambridge University Press.
Woodcock, N., Green, A. and Starkey, M., 2011. Social CRM as a business strategy.Journal of
Database Marketing & Customer Strategy Management.18(1). pp.50-64.
ONLINE
Business Strategy 2017. [Online] Available through
<https://en.wikibooks.org/wiki/Business_Strategy>. [Accessed on 2nd October 2017].
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