Volkswagen Business Strategy Report: Analysis of Strategic Position

This report provides a comprehensive analysis of Volkswagen's business strategy, addressing various aspects of strategic planning and implementation. It begins with an introduction to business strategy, highlighting the importance of monitoring and control in achieving organizational goals. The report then delves into an organizational audit using SWOT analysis, identifying Volkswagen's strengths, weaknesses, opportunities, and threats. An environmental audit, focusing on PESTLE analysis, is conducted to assess the external factors impacting the company. The report further examines the value of stakeholders in strategy formulation, emphasizing their roles and influence. A new strategy for Volkswagen is proposed, considering market entry and growth, along with a justification for its selection. The report also discusses the roles and responsibilities in strategy implementation, resource requirements, and the use of SMART targets. The conclusion summarizes the key findings and recommendations, providing a complete overview of Volkswagen's strategic position and future directions. The report also includes references to support the arguments and analysis.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Evaluating strategic position with the use of organizational audit.......................................1
2.2 Environmental audit for Volkswagen...................................................................................2
2.3 Value of the stakeholders in preparing of strategies.............................................................4
2.4 New strategy for Volkswagen...............................................................................................5
TASK 3............................................................................................................................................6
3.1 Suitability of alternative strategies which are linked with market entry and growth...........6
3.2 Justification for selection of business strategy......................................................................6
TASK 4............................................................................................................................................7
4.1 Roles & responsibilities of personnel in strategy implementation........................................7
4.2 Resources requirements for implementation of new strategy for VWAG............................7
4.3 Effort of SMART targets in business strategy......................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is reflected as plans and policies which are used by firms in order to
achieve all their assigned goals and business objectives. All the activities of firms should be
monitored & controlled in order to ensure smooth functioning at work place. Strategy are useful
tools for mangers as it helps them to make plans and policies in accordance with that all
employees will execute their working in order to achieve their targets. It is more beneficial
process as it helps business in achieving consistency in all their business operations and
resources are used economically so as to save them for future use (Astrachan, 2010).
Volkswagen have designed effective business strategy in order to resolve all the issues that are
faced by customers in present business situation. Penalties are imposed by team responsible for
protecting environment in order control harmful gases that are eliminating from vehicles. This
issue can easily be resolved with the help of various marketing strategy thus creating positive
image in minds of customers. The undermentioned report studies about role of stakeholder in
formulation of business strategy, plans developed for establishment of new markets, various
tools which are related with retrenchment & growth in order to execute new strategy.
TASK 1
Covered in PPT
TASK 2
2.1 Evaluating strategic position with the use of organizational audit
Each and every business should focus on internal audits as it its beneficial in identifying
all risk factors so that business will not face any difficulty in their business operations. Firms
have focused on adopting various tools and techniques which are effective and helps business to
achieve good results. The employees are given duties to monitor and keep records of all the
activities which are performed by them in order to achieve positive and healthy environment at
work places. They should make plans in order to build strong image among all the stakeholder
who are involved in business and performing business operations (Bharadwaj and et. al., 2013).
SWOT analysis are useful useful tools which are adopted by all business in order to
identify their strengths and weaknesses. Volkswagen is analysing all those factors which are
creating difficulties for their business activities. The strong points are valuable in achieving
growth and success for firms. Threats are helpful in designing back plans so that all the
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difficulties will be easily solved by applying measures to enhance performance of workers in
increasing productivity.
Strength: Volkswagen had generated clear goals and business objectives in order to
expand their business outside the boundaries of nations. This helps them in earning higher
profitability and market shares. According to index data of past years there revenues are
increasing on continuous basis. There profitability factors are not so high but they are easily
managing all their activities in effective ways. They are planning to develop and adopt social
measures in order to make their business grow.
Weaknesses: Volkswagen are having bulk stock which are unsold and this greatly affects
their pricing structures and disturbs their profitability and sales ratios. There are different
marketing strategies which are affecting their pricing policies and this should be effectively
monitored. They are not having effective marketing strategies then it results in not achieving
competitive gains. As there is higher competition in economy so they have to formulate good
business strategy in order to achieve growth.
Opportunities: The selected business is having different chances in order to expand their
business operations by making entry into different segments. Firms should develop those
business strategy which are effectual for business in order to achieve growth and development.
Various tools and techniques are adopted by which firms can easily expand their business and
achieve success in their ventures (Campbell, Edgar and Stonehouse, 2011).
Threats: There are various difficulties which are faced by business like changes in
technologies, modifications in trends of customers. This can be solved by developing effective
business strategy in order to make plans according to technological advancement. They can face
tough competition from rivalries who are operating in same business.
Team management are helpful in order to carry out all business activities in planned and
effective ways. This helps in building strong coordination among all employees which results in
development of healthy working environment.
2.2 Environmental audit for Volkswagen
In the year 2015 on 18 September there were difficulties which were faced by business
which had to be resolved like cars which were developed by them were eliminating out harmful
pollution from vehicles. The customers who have purchased the car were complaining about the
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difficulties faced by them and this created negative impact at market place. Thus they are not
able to achieve success in their ventures.
There were negative effects of pollution on health of persons and it was destroying the
natural beauty which is god gift for all persons of economy. This issues was majorly notices and
plans had to be developed in order to0 solve them in effective ways. Effective business strategies
have to be formulated at the time of manufacturing cars so that difficulties which are faced by
people can be easily resolved.
There new strategies are aimed at developing those cars which are free from pollutions so
it will not create any negative impact (Casadesus-Masanell and Ricart, 2010). Tools like
environmental audit are beneficial in order to increase sales and profitability ratios for all firms
who are dealing in auto mobile industry. This environmental audit can be executed with the help
of analysing all factors which are operating in external environment conditions like PESTLE
Analysis are evaluated as:
Political environment: If selected firms are planning to expand their business outside the
boundaries then they can carry forward as there are less rules and regulations which had to be
followed by them which can affect their business activities. There are less exercise duties and
taxes which had to be paid by firms who are dealing in auto-mobile sectors.
Social environment: They are developing business strategies which are beneficial for
society members as they have formulated plans in order to develop cars which are free from
pollutions. This can help in enhancing their sales ratios as they will be producing pollution free
cars and people will be ready to purchase them which results in higher profitability. They will
kept the prices of cars economical in order to gain attention of customers and build their brand
image in positive ways (Eccles and Krzus, 2010). Thus there profitability factor will be increased
to a greater extent.
Technological changes: The cited firms should be aware of changes in technology
factors in order to develop products accordingly which helps in satisfying current needs and
wants of their clients. This can be achieved by making modifications in tools and machined
according to advanced technologies. There should be effective management methods to keep
stocks of cars in advance so that customers will face any difficulty and this is also referred as
information systems which are designed by management. There are various tools and techniques
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which are working with advanced technologies like accounts, data base and these have to be
executed by Volkswagen.
Legal Environment: This is an essential factor for firms as they should carry of all their
business operations with the help of legal rules and policies. There are various regulations which
are enacted by law and these had to be followed in order to ensure smooth running of all their
business operations. All compulsory taxes should be paid in desired time & health aspect of all
employees should be considered in order to make strong work environment.
2.3 Value of the stakeholders in preparing of strategies
Stakeholders are valuable persons who are working for the welfare of firms thus helps in
gaining success in their overall business operations. The strategies which are developed by them
are useful in achieving long term business aims and objectives. They want to execute their
business activities at national and international areas in order to achieve high profitability. At
stakeholder should have a desire to analyse choices of customers and manufacture cars
accordingly (Elliot, 2011). Matrix structures are designed in order to achieve needs of customers
who are involved in business operations in effectual ways.
KEEP SATISFIED
( The individual who are involved in this
process are highly satisfied and they have
power to involve themselves in decision
making process.)
These are shareholders and workers who are
involved in business.
MANAGE CLOSELY
(These type of persons are having high power
but they show less interest. The important
message had to be passed among all employees
to satisfy them.)
There can include government officials or the
persons who are involved in supplying goods.
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MONITOR
( These persons does not have more power to
involve themselves in decision making process
but they have high interest.)
In this process half yearly and annual reports
are used.
They comprises of clients and Financiers of
business.
KEEP INFORMED
(These person show very lower interest in
decision making thus less powers while doing
comparison. )
The important message should be passed
among all the workers
This includes individuals from local
community.
Value of stakeholder analysis are reflected as:
They are formulating various types of business strategies which are helpful in developing
CSR activities.
They analyse the situation and provide useful informations for developing policies and
frameworks.
Planning is an important tool in order to motivate employees so they will achieve al their
goals in desired time frames.
Process which are used for analysing stakeholders positions are useful in achieving
consistency and aligned in overall business activities.
All the above factors are important in order to complete all the business operations in
desired times with full efficiency and effectiveness.
2.4 New strategy for Volkswagen
New and effective business strategies are developed in order to solve conflicts which are
arising at work places like pollution from cars thus they affect their working capacity. New plans
are useful in achieving work effectiveness so as to accomplish good and effective outcomes.
This new strategy can be implemented only after mangers have focused on conducting
organisation audits and environment analysis in order to maintain their present capabilities by
which they can increase their profitability ratios and also market shares. There are high penalties
which are imposed upon them by government while they were breaking the laws and they have
to pay them in desired time frame (Hahn, Kolk and Winn, 2010). The action plans are composed
of limited growth policies which are valuable in expanding their overall business operations.
Resources used in this method are also limited in number.
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The main aims and objectives of formulating strategies are related with reducing use of
effective resources while maintaining present knowledge, skills and capabilities of their
employees. The CEO of Volkswagen have given his view that all the strategies which were
framed with expansion of business should be obstructed by giving all penalties which are
enforced upon them. The strategies were formulated in order to make investment in all plans and
procedures in order to achieve effectiveness in working procedure. Porter five force framework
are beneficial in evaluating all difference, reducing cost factors by enhancing their working
capacity and all the elements which are helpful in enhancing profitability should be used. The
present image and portfolios of firm can be improved by making reduction in cost factors and
increasing overall working efficiency.
TASK 3
3.1 Suitability of alternative strategies which are linked with market entry and growth
There are different types of strategies which can be used by Volkswagen in order to
achieve growth and success in their ventures. All the resources which are available in economy
should be used in planned and effectual ways. This is beneficial in achieving effective results for
business. The other business strategy which are used alternatively are described as:
Market Entry: Various plans and strategies are formulated by business which are helpful
in expanding their overall business activities so as to attain higher profitability and market
shares. This tool is very useful for business to establish themselves at market areas. These factors
can be achieved by turnkey and licensing projects.
Substantive growth strategy: This type of growth strategies are used by business when
they are having high amount of resources available in economy by which they can achieve
growth. This can be achieved with the help of two process like acquisition and merger. This is
valuable for them in order to achieve higher growth factor at market areas (Haley, Haley and
Tan, 2011).
Limited growth strategy: This factor is mostly used those business who are not having
sufficient amount of resources in order to grow and expand their activities on larger scales. This
tool can be used with those firms who are involved in joint ventures while making plans and
strategies. This is an important strategy used by firm in order to make entry into new markets.
Retrenchment: This is the shut down stage when business are facing heavy losses and
all there operations have to be stopped.
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3.2 Justification for selection of business strategy
The most effective and suitable strategies are limited growth strategy. This helps in
reducing their overall cost which are involved in operations this helps in easily paying all
penalties and equity debt which are obligatory upon them. Overconsumption of resources are
reduced in order to save all resources for future times. This factor leads to growth and success of
business.
Reasons for Limited Growth strategy are evaluated as:
Heavy Penalties: Volkswagen have to bear high penalties while running their operations
in UK as the cars which were manufactured by them by eliminating high smoke thus they have
to bear the fine in order to maintain their images. If any rules and policies are broken by cited
firm then environmental agencies can assist them in doing the right job.
Maintenance of current capabilities: The selected strategies are helpful in managing
their present skills and capabilities of all their workers in order to achieve growth and success. If
there are any modifications in products then it should not affect their portfolios of their brands.
Expansion into new market or fields: The firm can focus on entering into new markets
by making joint venture with other business. Example: In Chinese markets two business were
aligned and they made joint ventures by sharing profitability factors (Li and Tan, 2013).
The selected strategy are beneficial in cutting their overall cost so that quality of goods
can be maintained and modifications can be made in products without generating an additional
cost while making new goods.
TASK 4
4.1 Roles & responsibilities of personnel in strategy implementation
There are different rules and regulations developed by personal in order to plan and
implement strategies in good and effective ways which are described as:
Senior Authorities: The higher authorities should develop effective plans and strategies
by analysing recent trends at market areas. They can guide mangers about the use of business
strategies in order to achieve good results.
Mangers: They are the persons who are having overall responsibilities in order to
monitor and control working of business. They are adopting plans in order to achieve goals in
desired time frames. Effective time management helps in completing all task in desired time
frames.
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Engineers and research personnel: They are involved in research activities in order to
analyse trends at market place and manufacture goods accordingly in order to satisfy demands of
customers.
Expatriates: These persons are moving from their home place in order to perform
business activities at other places where they knowledge can be enhanced and their skills can be
developed.
4.2 Resources requirements for implementation of new strategy for VWAG
While manipulating new strategy in business organisation, it is essential for managers to
adopt some resources which are able to give effectiveness to the process of strategic
implementation. Allocation of resources, helps to balance the complexity and sophistication of
strategic challenges. There are various types of resources, such as- human, physical, technical
and financial etc. Below described the brief description of these resources: -
Human resources - Every firm's success is depend upon well skilled humans. Therefore, it is
must for companies to provide training and development assistance to their employees in order to
get optimum utilisation (Melville, 2010). Volkswagen, focuses on hiring technical people who
will contribute in developing effective strategy that is able to achieve business goals and
objectives in vert fast manner
Physical resources – It capture wide range of machinery through a company will be
operated. With the assistance of new and innovative tools, managers can effectively implement
their strategies and policies within workplace.
Financial resources – If a business organisation has large amount of capital as it can
easily produce an effective and innovative strategies that is liable for business growth and
vitality. A firm can generate funds from different sources, such as – cash balances, bank
overdrafts, shareholders, bank loans, working capital, creditors etc.
4.3 Effort of SMART targets in business strategy
Various challenges and issues are being faced by Volkswagen, this would affect its
market growth and success in target market. In order to get rid of these problems, managers have
to set some SMART targets that helps in achieving goals and objectives of the firm in an
effective manner. In addition, strategic plans should be developed by improving existing
capabilities of business organisation. SMART targets should be specific, measurable, achievable,
realistic and time bound (Meskendahl, 2010).
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Goals and objectives are set in order to increase employee' efficiency and productivity as
all can work with a proper coordination. For example- if all individuals will be worked for 8
hours by giving their full attention; this could increases firm's production level and growth in
competitive market. Volkswagen also set its SMART targets for accomplishment of vision and
mission in a certain time period. Below mentioned SMART objectives of Volkswagen: -
Increasing sales ratio by 40% in 6 months. Production rates will be increased by 4% for next
year. Strategic alliances is assistive in business expansion and its operations in new markets.
Enhancing efficiency level of employees by 25% in upcoming years.
CONCLUSION
From the above report it can be concluded that business strategies are valuable aspects in
order to achieve their aims and objectives in planned and effectual ways. It helps in executing all
business activities in consistent ways in order to achieve their targets. Strategy planning is
helpful in achieving competitive gains at work place in order to achieve strengths. SMART
objectives are valuable in allotting times in which each activity have to be completed.
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