HND Business Strategy Report: Strategic Analysis of Volkswagen AG

This report offers a detailed analysis of business strategy, focusing on the strategic planning process and its application to Volkswagen AG. It begins by examining how company aims, objectives, and core competencies influence strategic planning, followed by an assessment of factors crucial in the formulation process. The report then evaluates the effectiveness of techniques like the BCG matrix in developing strategic business plans. Furthermore, it conducts organizational and environmental audits for Volkswagen AG using SWOT and PESTLE analyses, respectively. The significance of stakeholder analysis in strategy formulation is assessed, and a new strategy for Volkswagen is proposed. The report also explores various approaches to strategic evaluation, determining the appropriateness of secondary strategies and justifying specific courses of action. Finally, it addresses strategy implementation, including the roles and responsibilities of individuals, estimated resource requirements, and the contribution of SMART targets to achieving strategy implementation within Volkswagen AG.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 Strategic planning process.................................................................................................1
1.1 Assessing how company aims and objective and core competencies modify strategic
planning.......................................................................................................................................1
1.2 Factors required consideration in formulation process.........................................................1
1.3 Evaluating the effectiveness of techniques used in formulating strategic business plan......2
Task 2 Formulation of strategy........................................................................................................4
2.1 conducting Organisational audit for Volkswagen AG company .........................................4
2.2 Conducting Environmental audit for Volkswagen AG.........................................................5
2.3 Assessing the significance of stakeholder while formulating new strategy for Volkswagen
.....................................................................................................................................................6
2.4 New strategy for Volkswagen ..............................................................................................7
Task 3 Various approaches to strategic evaluation ......................................................................8
3.1 Determining the appropriateness of secondary strategy related to market entry substantive
growth and limited growth..........................................................................................................8
3.2 Justifying the selection of particular plan of action..............................................................9
Task 4 Implementing strategy..........................................................................................................9
4.1 Roles and responsibilities of Individual in Strategy Implementation. .................................9
4.2 Examining the estimated resource requirement for implementing new strategy for
Volkswagen AG .......................................................................................................................10
4.3 Calculating the contribution of SMART targets to the achievement of strategy
implementation on Volkswagen................................................................................................11
.......................................................................................................................................................12
Conclusion.....................................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The study includes mission, vision, goals and objective Neil Westwood’s magic
Whiteboard company which manufacture magic white board, reusable sticky rolls of whiteboard.
The project will have focus on the strategic management. The report will assist individual in
understanding the strategy planning and implementation process. The project will explain the
various approaches to plan evaluation which will help researcher in analysing the
appropriateness of alternative plan adopted by Neil Westwood’s magic Whiteboard firm and will
provide assistance to enterprise in framing new strategy by conducting various analysis and will
aid firm in gaining competitive advantage. The assignment also aim at evaluating the
contribution of Smart targets to achievement of strategy implementation in Neil Westwood’s
magic Whiteboard .
TASK 1 Strategic planning process
1.1 Assessing how company aims and objective and core competencies modify strategic
planning.
Mission – The mission refers to the statement with clarifies the purpose and defines value of the
company. The mission of Neil Westwood’s magic Whiteboard is to become successful in
manufacturing industries.
Vision:- Vision of the organisation clarify the position that the enterprise see themselves. It
refers to participatory action taken by business that will enable the firm in converting challenges
into opportunities for their growth through optimum utilisation of resources. The vision of Neil
Westwood’s white board firm is to become leading manufacturer in these industries.
Objectives and Aim- refers to the target that are to be achieved by enterprise during a particular
period. The main objective of Neil Westwood’s magic Whiteboard group is to offer their
products and services to customer at affordable price. Aim of the business is to develop more
innovative features in magic board.
Core competencies-core competencies is very important skills of organisation that assist
business in gaining competitive advantage. The core competencies of Neil Westwood’s magic
White board is that they introduce new and innovative product. The Other core competency of
the firm is that its is having skilled employees and they are using advance technology for
developing their product.
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1.2 Factors required consideration in formulation process
Industry- Before starting the process of formulation of strategy it is essential to conduct
industrial analyse in order to get knowledge about the recent industrial trend, rules and
regulations. The various other factors are required to be considered while evaluating industries
such as competition, growth potential, profitability, chances if entry of new industries etc. As
these factors have direct influence on growth and profitability of Neil Westwood’s enterprise.
(Wheelen. and Hunger, 2017)
Competition- Competition is the main element that requires special attention as the organisation
success are associated with it. The Neil whiteboard company uses various techniques and
methods for determining the strength and weakness of its competitor as this will help
organisation in gaining competitive advantage and reducing the risk of failure. This will also
provide assistance to enterprise in examining the strategy used by its competitors in attracting
customer and will help industry in developing more innovative and well defined effective
strategy.
Organisational culture-before formulating any plans the Swot analysis is conducted by
Westwood in order to examine its strength and weakness this will enable organisation in framing
effective strategy. This plans will further assist firm in reducing various risk and threats and it
will aid the Neil Westwood whiteboard firm in enhancing its strength and capturing
opportunities.
Resources-The initial process that the business should include before framing any plan is to
identify, evaluate and allocate various resources such as human resource, capital, that are
required in developing effective plan that will assist Neil Westwood whiteboard company in
achieving their goals and objective.
Consumers-The objective and ultimate goal of Neil Whiteboard group is to satisfy customers
and to provide them good services and products. It is required by organisation to frame strategy
by considering interest of consumers and should frame those strategies that should help the
company in meeting the need, requirement and expectation of consumers.
1.3 Evaluating the effectiveness of techniques used in formulating strategic business plan
BCG matrix methods that can be used in explaining the effectiveness of Strategy .
1Boston consulting matrix -This matrix has been created in order to help organisation in
examining their business unit and analysing the product served by them. This matrix further
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assist whiteboard business unit in evaluating their position and further assist enterprise in
allocating their resources in such a way that can be utilise for framing plans related to marketing,
branding etc. (Johnson, 2017.)
The BCG matrix consists of chart and uses scatter graph to rank different units of
business on the basis of growth rate and market share.
Cash cow-is a situation where the growth of firm is slow but it has high market share. Industrial
unit generates excess amount of cash. But this excess generation of cash consist of no value as
these cash are being used by company in its growth process.
Dogs-in this case the business units have low market share but dilatory growth. The industrial
unit bears enough amount of cash in order to maintain its market share. This situation states that
it is required by the organisation to cut off their unnecessary cost and expenses. This situation
contains break even point as it does not have any growth and market share. Being facing the
condition of break even point the enterprise provides social benefit.
Question mark-in this case the business entity has low market share in growing market.
Questions mark provides possibility to organisation to gain high market share and convert
themselves in stars position and further they can transform themselves into cash cow in case
business entity is having slow growth.
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Illustration 1: BCG MATRIX
source: (Mr De Jonge 2017)
§
Stars-these industries generally have fast growth and they have high market share. In this
situation company generates high amount of cash and bears high amount of money in framing
strategies in order to maintain its market share and to increase sustainability in market.
Advantages of BCG matrix:
 It has helped Neil Whiteboard organisation in assessing their market position.
 It has helped business unit in taking major decision regarding future action.
Disadvantages-
 The disadvantage of this matrix is that its is based in growth and market share and it does
include other factors to measure firms performance.
 The data provided by this matrix is not enough in evaluating the efficiency of strategy.
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Task 2 Formulation of strategy
2.1 conducting Organisational audit for Volkswagen AG company
The SWOT analysis technique can be used to conduct internal analysis of enterprise. The
Internal analysis refers to determining the internal strength, weaknesses, opportunities and
threats. This process assists Volkswagen AG unit in overcoming threat, reducing risk and helps
in enhancement of its strength as well as provide aid in exploring opportunities. This technique
enable Volkswagen organisation to evaluate their strategic position.
SWOT analysis of Neil White board group:
Strength:
 The Biggest strength of Volkswagen is the popularity of its brand name.
 Company has increase its strength by doing joint venture with Chinese company.
 Main strength of the business group is its diversification strategy.
Weakness:
 Weakness of organisation is that it was failed in gaining market share in U.S. Auto-
mobile market.
 Lack of expertise.
 Ineffective marketing strategy.
Opportunities
 To develop innovative skills by use of new technology.
 To enhance its sustainability and profits by framing effective policies.
Threats:
 Stiff competition.
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 Government laws and regulation.
2.2 Conducting Environmental audit for Volkswagen AG
Environmental Audit for Volkswagen enterprise can be conducted by using PESTLE
analysis technique. This method will help organisation in eliminating the influence of various
factors on business operation and reducing the various risk associated with these factor which
may have impact on survival and growth of business unit. PESTLE analysis of Volkswagen
(Dayan . Heisig . Matos, 2017)
Political factors- The political factors have direct impact on business operation and activities.
The various political factors include Tax rate, code if conduct for organisation framed by
political parties etc. But Volkswagen does not have to face such issues as its providing the
benefit to society by giving them job opportunities and by manufacturing e co friendly vehicles.
And is ensuring trustworthiness among consumers.
Economic factors-economic element includes demand, supply, income, profit, price etc. These
economic factors have direct influence on the financial stability of organisation as well affects its
growth. The Volkswagen enterprise doest not have to face such issues as its is following the
strategy of diversification.
Social factors-Social elements plays vital role in success of any business. The various social
factors include culture, religion, trend etc. By analysing the need, requirement of people in
society the Volkswagen company has decided to develop auto mobile product with
environmental friendlily features. The Volkswagen has framed its strategy to introduce new
features in its existing car, this has assists the firm in attracting more number of customer and
Provided assistance in enhancing their performance.
Technological factors-Technological factors play important role in enhancing the operational
efficiency of enterprise. Adoption of advance technology by Volkswagen for creating innovative
product has resulted in increasing productivity by Volkswagen which has enabled the
organisation to generate profit which has lead to its growth. The advancement of technology has
provided the opportunity to firm to cut off its expenses by reducing waste.
Environmental Factors- Conducting business in proper way and in ethical way is very
important. The Volkswagen group in order to continue its business activity smoothly and in
effective way has adopted various strategy to fulfil its corporate responsibility towards society.
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By considering the environmental factors the Volkswagen company has adopted the plan to
recycle its waste produce while manufacturing.
Legal factors-To eliminate the influence of laws and legislation Volkswagen has adopted
strategy to analyse the legal factors.
2.3 Assessing the significance of stakeholder while formulating new strategy for Volkswagen
Stakeholder refers to the persons whose interest and concerned are associated with
business activities and actions. There are two types of stakeholder basically primary and
secondary stakeholders. The primary stakeholders are those stakeholders who works within
organisation and whose initial interest and concerned is attached with the business unit.
Employees, Directors, mangers are primary stakeholders. Secondary stakeholders generally are
outsiders they are not directly engage in organisational activities. They are those people whose
aim is to observe the activities of enterprises. External stakeholder are suppliers, investors,
consumer etc. The main significance of stakeholder analysis is to increase cooperation and
coordination between individual and firm as well as between groups (Montgomery, 2017).
Importance of stake holders in strategic formulation process:
 The stakeholders assist in providing various data and information that can be used in
conducting formulation process on effective way.
 They also provide assistance in allocating various resources required in the strategical
activity.
 They also help in analysing the reaction of consumer regarding organisation (Wheelen
and Hunger 2017)
The various stages involved in stakeholder analysis for Volkswagen:
1 stage: Identifying stakeholders-the initial stage include identifying stakeholder who may play
significant role in enterprise and whose action and activities may have positive impact on the
organisation success. This can be attained by answering various questions such as whose
participation will be sought, by examining the performance of individual and group.
2 stage :Assessing the expected impact of individual interest on the project
This assessment can be on the basis of individual expectation of the project, aim and
objective of individual in carrying out particular product,
3 stage : Determining the significance and influence of stakeholders power on project.
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Shareholder tool can be used Volkswagen by can be used to determine the importance
and influence of stakeholder power on project.
 The stakeholder that has high power and those who are interested in working for benefit
of business will contribute their maximum efforts in developing the strategy and
promoting the products of Volkswagen business unit.
 Stakeholder that has low interest but consist of high power will influence the plans of
firm and will contribute less in achieving the goals and objectives of Volkswagen
organisation.
 Highly interested stakeholders that consist of low power will have positive impact on the
organisation strategies and such stakeholder are generally considered as valuable for
Volkswagen enterprise.
 The stakeholders those who are less interested in enterprise project, they generally do not
have power to influence business activities carried out by Volkswagen
(Pearson.Lopes.Scavarda Hofmeister.Thomé and Vaccaro 2017)
2.4 New strategy for Volkswagen
The Volkswagen has adopted the principle strategical plan known as Together strategy
2025 and now its aim is to become worlds leading auto mobile industry. For becoming worlds
automotive leader the Volkswagen has adopted the plan\s for forming collaboration. The firm
has adopted the policy to focus in the diverse need of customers and exceed their
expectation.The other strategy that can be adopted by Volkswagen are product development
strategy and market penetration strategies.The product development plan will assist organisation
in attracting more number of customer through innovation.It also allow firm to make
improvement in quality of existing goods and services.The marketing penetration stratergy will
help business entity in increasing its market share and rising its sales.It also enables firm to
explaore and capture various market opportunities.
Task 3 Various approaches to strategic evaluation
3.1 Determining the appropriateness of secondary strategy related to market entry substantive
growth and limited growth.
Substantive Growth
The Merger and acquisition are two elements through which substantive growth
strategies are being implemented. Merger is a kind of deal which is done between two company
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in order to establish new enterprise. The merger includes members of two different firms to
create combination of two strategies that would assist in catering the need of strategy by new
business unit and it would also be useful in developing potential to implement substantive
strategy. The Volkswagen due to its wide market share has the potential to implement strategy
for substantive growth. The term acquisition is used when one organisation is owned by other
business unit. As it has high power in market and it has popular brand name it can acquire any
weak organisation, the Volkswagen can use acquisition as a tool to gain substantive growth. The
Volkswagen can use relative diversification as a method for achieving substantive growth.
Related Diversification refers to the case where one business unit combines with other enterprise
that is dealing in same product line (Sorescu Warren. and Ertekin 2017)
Limited growth- Joint Venture can be a way for the business unit to have limited growth. Join
Venture refers to the business arrangement where two or more firms agrees to share their
resources for accomplishing a specific task. In joint ventures being sharing resources both parties
carries their separate identity. As Volkswagen is a popular brand but it has failed to gain market
share on UK it has been suggested to company to do joint venture with the popular auto mobile
organisation in UK. This will assist business in gaining high market share and it will provide aid
to enterprise in allocating resources (Kavanagh and Johnson Eds. 2017).
Retrenchment
Retrenchment always treated as action for cure. These activities are used by organisation
that are analysing inefficiency in its operations, enable to fulfil its objectives and aims , fails to
produce sufficient amount of output, the business unit facing economic instability. These
business unit can adopt the strategy related to cost as well as expense reduction, decreasing
assets that incurring high cost, developing strategy for generating revenue. The Volkswagen is
not facing such issues it is not required by them to follow these strategies.
3.2 Justifying the selection of particular plan of action.
The main objective of VOLKSWAGEN is to expand its core business activities. The
Volkswagen firm should formulate strategy related to market development as well as product
development. This strategies will assist enterprise in enhancing its market share and product
development strategy will help organisation in gaining customer attraction. The company can
implement this strategy by manufacturing innovative products and adding features in its existing
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commodity. The Volkswagen can launch its goods in new market this will enable the form to
explore new market and gaining more opportunities (Baird and Baird 2017).
Task 4 Implementing strategy
4.1 Roles and responsibilities of Individual in Strategy Implementation.
The Strategy implementation require involvement of number of persons in an
organisation. Each and every individual has different role to play in strategy implementation
process. Skilled and knowledgable personnel are required on implementing activity. Volkswagen
members and staff should fulfil their roles and responsibility in order to implement activity on
successful and effective way For smooth process of implementation its required by top level
management as well as strategic personnel to clarify the objective and process of
implementation.
Top Level management-Top level management of Volkswagen is responsible for
sharing objective and vision of implement particular plan. The role of board of directors and
chief executive officers is to approve and review the plan before implementation.
Middle level management of Volkswagen- is responsible for providing direction and guidance
to lower level management in enterprise.
Employees, and other members of Volkswagen-are responsible for allocating of material
resources and carrying implementation process. They are also responsible for communicating
plan to consumers. Their role is to provide their ideas views about particular plan.
Personnel manager-is responsible for arranging man power required in the process and are
responsible for carrying the activity in effective way.
Finance department-The Financial department is responsible for preparing and managing
budget and analysing the financial need fir conducting implementation method. The other main
role for financial unit is to set target required to be achieved by strategy.
Internal Stakeholder-The role of other internal stakeholder is to examining reaction of
consumer about particular activity by business unit and providing their views and ideas for
implementation.
External Stakeholder-The external stakeholder are liable for proving resources and providing
feedback about the process.
Strategical department-The account and strategical department are responsible for maintaining
data related to various strategical process previously implemented. The members of Volkswagen
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