Business Strategy Report: Volkswagen's Strategic Positioning Analysis

This report delves into the business strategy of Volkswagen, examining the company's strategic positioning, environmental factors, and stakeholder analysis. It begins by exploring the process of strategic planning, including the assessment of business missions, visions, objectives, goals, and core competencies. The report then analyzes factors crucial for formulating business plans and evaluates the effectiveness of various techniques. A key focus is the strategic positioning of Volkswagen, achieved through an organizational audit, particularly a SWOT analysis. The report also conducts an environmental audit and assesses the significance of stakeholder analysis in shaping new strategies. Finally, the report examines Volkswagen's growth strategy in relation to market entry and addresses the roles and responsibilities of personnel, resource requirements, and the evaluation of SMART targets. The report provides an in-depth analysis of Volkswagen's strategies and challenges, offering insights into its approach to market dynamics, competition, and adapting to change. The analysis includes the impact of the emission scandal and how the company has addressed it to maintain its market position.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1.1 Assessment to inform strategic planning.........................................................................1
1.2 Analysis of factors for the formulation of business plan..................................................2
1.3 Techniques used for development of business plan.........................................................3
TASK 2...........................................................................................................................................4
2.1 Analysis of the strategic positioning...............................................................................4
2.2 Environmental audit ........................................................................................................6
2.3 Importance of analysis of stakeholders............................................................................7
2.4 Presentation of new strategy for the organisation............................................................8
3.1 Strategy of Volkswagen in relation to limited growth while entering in new market.....9
3.2 Limited growth strategy for market entry and growth of organisation..........................10
4.1 Roles and responsibilities of personnel.........................................................................10
4.2 Analysis of the estimated resource requirement.............................................................11
4.3 Evaluation of the SMART targets..................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
Books and Journals...............................................................................................................13

INTRODUCTION
Business strategies act as soul for the organisations, as it helps the enterprises in calculating,
implementing, measuring, monitoring and controlling the performance of the firm. It helps the
auto-motives company like Volkswagen (VW) in designing and formulating its policies
according to environmental changes. Volkswagen the auto mobile company serving differenced
cars every year across the globe. Further, the report will analyse business strategies followed and
implemented by VW after consultancy of planning manager of New phoenix. Moreover, the
report will analyse the emission scandal which forced the company to make changes in its
manufacturing process. Whereas, the report will evaluate the internal and external factors
followed by the firm to make changes in its current strategies in order to satisfy buyers
requirement and cope up with the fuel emission scandal. Hence, the report will examine the
contribution of SMART targets which can assist the entity in attaining its ultimate goals and
objectives.
1.1 Assessment to inform strategic planning
For the formulation of the business strategy it is necessary to understand the concept of
strategic planning. It is a complex process in which the managers and leaders of the organisation
will determine the vision and accomplish a critical task of identifying the goals and objectives
for the future. They will analyse the core competencies which are required for the formulation of
the strategic plans. It is also considered as analysis of the ways through which the organisation
will carry its activities in order to achieve its objectives vision, mission and objectives (Dani, and
et.al., 2012). It is a concept of interpretation of the priorities for the objectives to accomplish the
stated vision. In this context, the vision mission and objectives of the company of Swing patrol
has considered on the basis of which strategies are formulated.
Vision: It is a statement which determines what the organisation want to achieve in the near
future. In the above study, it can be said that the organisation Swing patrol has the vision of
Being an excellent dance academy across London and want to capture maximum number of
dancers in 5 years. It has been recognised that the organisation will accomplish its vision in the
future if it will follow a successful business strategy.
Mission: It is a statement which describes the short term quantified goals which an organisation
wants to achieve in the current financial year. It has been analysed that the Swing patrol has a
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mission to start the 5 new avenues in the London and wants to acquire more staff and qualified
volunteers and to share the wonderful, joy full dance.
Objectives: It is the aim of the managers for the organisation which has to be achieved for the
attainment of the vision of Swing patrol. In the organisation managers has an objective to hire
some qualified and professional teachers for the students or dancers.
Goals: It can be said that the goals are the ways which are determined by the leaders to achieved
the predetermined objectives of the Swing patrol. They have set their goal to identify the
academies from which they will hire the professional teachers for the avenues and reduce the
cost of the firm in hiring the Volunteers.
Core competencies: These are positive aspects or the competencies of the Swing patrol which is
significant for the formulation of the business strategy such as: Better and qualified volunteers,
best 35 places across the London.
1.2 Analysis of factors for the formulation of business plan
Strategic planning is a method that is designed by the organization to achieve its objectives.
 Organizational structure: Organization have its specific structure that shows its
internal and external strategies. Organizational structure involves power distribution,
decision-making skills, impacts of new strategic plans on objectives and relationships
between employees and managers. How strategic planning can be performed by the
organization is the main purpose of organizational structure (Jianwen. and Ying,, 2014).
 Communication: The success of the strategic planning processes depends upon the
communication between all levels of employees in the organization. Every strategic
plan should discuss within the employees of the organization. It helps in the
achievement of the objectives and success of the organization. The senior management
will discuss all the strategic plans with the employees. The employees will give their
response, contribute their inputs, give creative ideas and suggestions that can be very
useful for the success of the organization.
 Leadership: Leadership is a process that affects other employees of the organization to
achieve the goals. Leader operates the organization in the order which makes it capable
to achieve its objectives frequently and positively (Winn and Zhang, 2013). In order to
conduct organization, leader uses its leadership skills, values, ethical knowledge and
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characters. Leaders should motivate employees of the organization in the way that it
encourages them to work harder to achieve goals of the organization.
 Human resource: This section of the organization is the big opportunity in order to
straighten the strategic plans of organization. Satisfactions of employee is the core part
that human resource management should ensure to be completed because this
satisfaction of the employees in the organization helps in success of the strategic
planning and goals (Awan. and Akhtar, 2014).
 Project management: Once the strategies are arranged, there are two points regarding
to project management are important to look out for the strategic planning. One is to
analyse the project for the success of each strategy conduction. Another one is to make a
hierarchy to prioritize which project should be performed first to achieve the success.
For accomplishment of the project high involvement and dedication of employees is
essential to contribute their time required on the project (Laosirihongthong, 2013). This
high level of involvement and dedication of employees make sure that they understood
the strategic plan and gives their full efforts to achieve it.
 Culture: Employees value, beliefs, attitudes and behaviour is included in the culture of
the organization. Each employee's attitude and behaviour affect the success of the
strategic plan. The way of thinking and ideas of the employees can differ in the term of
strategic plans. The belief of employee that change is necessary and everyone should
adopt this, stands helpful in the success of strategic plan and ensures organization to
achieve its objectives.
Another factor that may influence the formulation of strategic plans are product of the
organization, finances, technology, translations, branding of the product and marketing.
1.3 Techniques used for development of business plan
Vital objective of organization is to evaluate the effectiveness of techniques used while
developing strategic planning (Irwin. and Bradshaw, 2011). For the analysis of techniques used
for developing strategic plans its is necessary to look out for whether it is able to fulfil the
objectives of the organization. To evaluate the effectiveness of strategic plans first thing to
analyse that the technique established for the objectives covers the internal and external factors
of the organization. A technique that includes employees, political factors, legal issues,
technology, and social factors ensures the success of strategies. The effectiveness of the
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developing strategic plans may also include SWOT and VRIO analysis because it fulfils all the
needs of strategic plans (Jurše and Mulej, 2011). The organization should know the strengths and
weaknesses of the employees working in the organization so that the organization may analyse
which employee can work in which field. This analysis helps organization to achieve their goal
more successfully. Evaluation of effectiveness of techniques may also involve the smooth flow
of process from start to end. Techniques should also look out that every employee is getting
equal opportunities according to their capabilities. The techniques should be applied and
evaluated step-by-step so that correct result can be achieved. The accomplishment of every
techniques in favour of the organization should also be evaluated.
TASK 2
2.1 Analysis of the strategic positioning
The interpretation of the strategic planning will provide an analysis of the strategic
positioning of the Company. The organisation audit is technique in which the internal assessment
of the Volkswagen is conducted to analyse the strength weakness opportunities and threats in the
markets (Kang, 2014). The organisational audit can be done with the help of SWOT analysis of
the Volkswagen.
Strength: These are capabilities which helps an organisation to expand its business in the
market and helps in development of various business strategies the major. In this Context,
analysis of the Volkswagen has determined that the main strength of the company is that they are
clear with their objectives and business segment.
 Good brand image among the customers and most of the people knows that it
manufactures sports cars, passenger cars and bus's.
 Volkswagen has the smooth and efficient structure.
 It has a strong presence because it is one of the oldest car manufacturers.
 Well managed operations because it handles almost a production of almost 27000 cars a
day (Khan and Kakabadse, 2014).
 The company has a very strong brand in USA and Europe as it has built its strength
across the world.
Weaknesses: These are some weak points of the company on which they to focus to increase
their business. Here are some weaknesses mentioned below:
 Huge competition faced by the company which has taken away its margin.
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 Weak Positioning in some countries like India.
 The emission scandal has affected the image of the company and trust of people was
broken because the decision of installing the wrong software was made by the top
management of the company.
 The company has faced a critical crisis in the London which has affected its sales
revenue.
 The company spends its only on the advertisement to build a brand for the cars like
AUDI, Bentley, Porsche and does not spend to create its brand equity for its old brand.
Opportunities: These are the present advantages, which the company has to capture the market. It
can be said that the Volkswagen has various opportunities to expand its business. Some of the
opportunities are described below:
 Increase in purchasing power of the People: One of the main advantage for the company
is that the sale of automobile industry has been increasing every year (Khattab, 2012).
 Continuous rise in the fuel efficiency of the cars because the company has applied
various strategies after the emission scandal.
 The company has the opportunity of worldwide expansion because the analysis has
determined that there is a rapid growth in the GDP of countries.
 The company has developed modern and innovative design of cars which helps in
influencing the customers.
Threats: These are some problems which are faced by the Volkswagen which are to be
resolved early.
 Threats of substitutes: Auto mobile companies have increased as there are some
companies which manufacture the substitute of the Volkswagen at lowest price.
 The brand reputation has hurt because of the emission scandal and It will have to spend a
lot of money to build its image and gain its strength (Kirchgeorg, Jung and Klante, 2010).
 Policies and regulations of different countries will affect the sale of the company.
Government of different country wants to protect and help the parent companies.
 Rapid changes in technology has made a great impact on the production of the company.
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2.2 Environmental audit
It is most important technique in which the top management of the company will examine
the external environment of the company in order to formulate the business strategies. They will
analyse the external environment of Volkswagen with the help of PESTLE analysis.
 Political environment: It is the environment of the company which is affected by the
policies of different political parties or the government of UK. It has been treated as
threat to the company as the policies of the company will affect the production and sale
of the company.
 Economic environment: The company is dealing in the luxurious and wide segment of
the Auto mobile industry in which the company has the strong financial growth. The
company has determined that the people has the capacity to buy the cars (Khoa, 2014).
There is appropriate demand of the product in the market but due to high prices of the
cars the company will face some issues.
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Illustration 1: SWOT analysis
(Source: Kirchgeorg, Jung and Klante, 2010)

 Social environment: analysis has determined that the individuals have started to buy the
luxury brands which has made a positive effect the market of the company. It will
indicate towards the development of the market and change in the market trend.
 Technological environment: There is a strong effect of technology on the industry and
the company is already investing in adopting the new technology. It has been considered
that there is a requirement of improvement in the technology of the cars. Competitors will
focus on this element to reduce the sale of Volkswagen but the company will introduce
the innovative technology to provide a tough competition.
 Legal environment: The company has to follow the tax related rules, competitive policy.
Policies of the European Union and policies regarding health and safety (Jurše and Mulej,
2011). The managers of the company have defined that the company has faced several
problems regarding safety. It has implemented appropriate measures to remove issues.
 Environment Factors: It is most critical aspects for the Volkswagen after the emission
scandal and they have decided to review all the plans. All the major aspects were taken in
to consideration and changes which are required in the cars must be accomplished by the
company.
2.3 Importance of analysis of stakeholders
Analysis of the stakeholder is a method to understand the role of stakeholders within the
decision-making for the formulation of new business strategies. Accordingly, the Volkswagen
will prepare to convince the stakeholders for the development of new strategy. The importance
of the analysis is immense in the process of new strategy formulation. It has been recognised that
the company has to work for the satisfaction of the stakeholders only to gain their support in the
formulation of strategy. They are considered as the main strength of the company to expand its
business and to know the strategy of the competitors (Awan and Akhtar, 2014). Another
importance stakeholder analysis is that it helps in identifying the competencies of the employees.
It has determined that the success every strategy is depended on the potential and capabilities of
the employees. Thus, the analysis will clearly define the skills of the employees against the new
strategies. It also includes the analysis of mind-set of the customers about the products in the
market. It helps to know about the recent trends or preference of the cars in the automobile
sector. It provides a clear understanding about the needs and demand of the customers. The
stakeholder analysis will help the company in gaining the positive response of the shareholders
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and investors. It will help to fulfil the financial requirement of the company if the strategies that
are developed by the companies would be appropriate for the business and the shareholders. It
also helps in identifying the legal obligations or restrictions to remove the threats of
Volkswagen. Hence, there is a major importance of analysis that could be availed by the
company.
2.4 Presentation of new strategy for the organisation.
For the formulation of new strategy for the Volkswagen the Ansoff matrix will be
implemented in the current situation. The appropriate strategy for the company is that they need
to analyse the preference of the customers and have to focus on the development of market and
product development strategy (Laosirihongthong, 2013). It is important to know that the market
development always require high investments but if the plans are implemented appropriately
then the Volkswagen will be able to increase its capacity of revenue generation. The another
requirement of the company is there product development as they are active in the luxury auto
mobile segment so the products with new technology are required in the competitive market.
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Illustration 2: Ansoff's matrix
(Source : Laosirihongthong., 2013)

3.1 Strategy of Volkswagen in relation to limited growth while entering in new market.
VW is focusing on limited growth strategy, which will help the organisation in enhancing
its market growth and reducing debt. According to the strategic planner manager of New
Phoenix, the firm will follow limited growth strategy in which the manager of the company will
segment its existing market with revaluing and innovating the existing models of cars. The focus
of the engineers will be to manufacture and innovate such automotive, which will reduce
pollution emission (Richard, 2000). The manager of the company is asked to follow steps, which
will ensure the stable growth of VW, which are as follows:
Market Penetration: strategic planner of new phoenix suggests this strategy because it
aims launching automobiles at new discounted prices. VW will increase its revenue with the help
of promotional activities for its existing cars, which were degraded after the emission scandal.
Further, in this the enterprise do not aim at changing the manufacturing process but there aims is
to make automotive environment friendly and to sell them at schemes which can attract buyers.
Product Development: Volkswagen is also focusing on manufacturing new cars in which
engineers will focus on reducing the fuel emission. Besides, after these process old automobiles
will be removed which were claimed in scandal. In contrast, planner oh New phoenix also stated
that launching new products after particular period attracts the customers towards the brand.
Market Development: In this, the planner of the company suggested Volkswagen to
launch same cars in new market. These techniques help the firm is making optimum utilisation of
resources and attract new buyers who are not affected by scandal and trust on the brand (Figge,
F., Hahn, Schaltegger and Wagner, 2002). Moreover, the VW is planning to follow this
technique as it aims at targeting new customers as everyone has differentiated needs and wants
when it comes to auto-motives.
Innovation: Manager initiates that innovation in any product offered to customer can
increase the market demand for that specific product. Hence, Volkswagen should emphasis on
making changes in the cars which came under the emission scandal or the enterprise can also try
to manufacture differentiated auto motives which will assist the company to prove their loyalty
towards environment.
Combination strategies: Combination process includes stability, expansion and
retrenchment. In this VW can implement changes in context to fuel emission and can combine
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them with already manufactured auto motives. This technique can help the enterprise in reducing
wastage of manufacturing time and making optimum utilization of resources.
3.2 Limited growth strategy for market entry and growth of organisation
Entering into new market the company seeks advice from planning manager of New
phoenix which will them in recovering from all the losses faced due to Scandal. Entering into
new market helps the company to grow from the start and earn stability. There are various steps
which are to be followed by the enterprise while entering into new market. Hence, the steps are
described under:
Market penetration: In this technique, the auto mobile company need to decide whether to
offers same type of cars in new market or to launch new cars keeping in mind the effects of fuel
emission scandal (Chesbrough and Appleyard, 2007). Besides another way to increase growth in
new market can be by lowering prices or offering the auto motives at discounted prices.
Market Expansion: This technique is inspired by market development and this is followed
by the enterprise when the company is unable to grow in current market.
Advanced technology: This is also one of the reason behind entering into new market that
entity is unable to match up with innovation in technology of other countries so the company
make shift to new environment so that they can adapt new manufacturing equipments which can
also help the with reducing the fire emission problem.
Market segmentation: Before entering into new market planning manager suggested
Volkswagen to divide the capable market in which the company wants to sell its products.
Customer reaction: When expanding market into new area VW need to examine the
reaction of customer towards the products and manufacturing process of the firm.
4.1 Roles and responsibilities of personnel
For the implementation of strategy the company must identify the roles and
responsibilities which every individuals has to perform in the organization. It is important for the
Volkswagen to understand that the responsibilities should be delegated to the professional to
implement the new strategies. It is highly important that the organization to give the priority to
the experienced employees. It has been considered that the major roles and responsibilities of
individual is associated to communicate the plans to the related department so that proper steps
must be taken by the managers (Robert and Racine, 2000). The manager should be clear with
the concept of strategy as it is helpful in convincing the employees in effective manner. It is the
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responsibility of the personnel to arrange the resources that will help to implement the strategy
with fewer problems. There must be a proper distribution and delegation of resources as it will
help in implementation of strategy in a given period. It is also a task of the personnel to ensure
the continuous monitoring of the strategy in the process of implementation. All the essential
activities and improvement must be recorded by the personnel in adequate manner. It will help in
assessing the growth and results of the strategies which are implemented. Thus, these are major
roles and responsibilities of individual which are to accomplished in effective way.
4.2 Analysis of the estimated resource requirement
For the implementation of plans for development of market and product there is a need
of appropriate resources that can help in regulating the activities of business.
 Raw material: These are most the important resources which are required to produce the
cars. In the auto mobile spare parts of the vehicles are considered as raw material. With
the appropriate raw material company will be able to produce the luxurious cars to fulfil
the demand of the customers.
 Technological resources: It includes the use of modern equipments in the production of
new and innovative vehicles. It mainly focuses on the designs of the cars which should be
different from the design of competitors.
 Financial resources: It is very significant for the Volkswagen to have appropriate funds
from the shareholders or the investors for the development of the product. It is required
for the purchase of raw materials and buying the equipments, paying the salaries to the
workers and maintenance etc.
 Human resources: At last the most important resource which must be considered by the
Volkswagen are its employees. Efficient work force is required at the workplace who
have the capabilities to perform the job.
4.3 Evaluation of the SMART targets
In the Volkswagen the targets will help in achieving the objectives in appropriate manner.
These targets are parameters which determine the movement of company into a particular
direction. These targets are as follows:
 Specific: Their will be a increment in the market share and profitability for the
Volkswagen. The organization is committed towards an increase in the market share with
the 10% in ever quarter
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 Measurable: These are standards set by the Volkswagen which can be measured in
numerical terms (Richard, 2000). It includes that 10% rise in share is measurable even
by measuring the profitability.
 Attainable: It is clear that if this strategy is implemented in effective way than this target
could be achieved by the Volkswagen in desired manner. It will get the results which are
expected from the business with the help of the selected strategies.
 Realistic: It is absolutely clear that the target which is set by the Volkswagen is realistic.
There is no unrealistic claim done by the organisation in relation to increasing the share
in the market by 5%.
 Time bound: In this analysis it is clear that the company will achieve this target on the
quarterly basis. The set objectives will be revised after the 2 years. Thus, these objectives
will help in resolving the slowdown in business of Volkswagen.
CONCLUSION
The report concluded that, the auto mobile company in UK are facing problems in selling
their products as the government is banning the projects which are affecting the environmental
conditions. Further, the report examined the environmental audit and stakeholder participation
while formulating and implementing strategies within the firm. Besides, the analysed the limited
growth strategy followed by the Volkswagen to reduce the effect of Fuel emission scandal on
consumers. Moreover, the organisation is trying to cope up with the situation which has affected
the environment and customer demand for the auto mobiles of the company. Hence, the report
evaluated various roles and responsibilities of personnel and the requirement of resources which
are needed to attain the objectives of new strategies in Volkswagen
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