Volkswagen (VW) Business Strategy: Company Overview Analysis

This report provides a detailed overview of Volkswagen's business strategy, examining its vision, mission, strategic planning process, and core competencies. It explores key factors in forming strategic plans, including competitor and market share analysis. The report delves into the Ansoff Matrix, showcasing Volkswagen's approach to market development, penetration, and product diversification. Additionally, it analyzes Volkswagen's position using the BCG matrix and directional policy matrix, highlighting the company's strengths in cash generation and its commitment to growth. This analysis is crucial for understanding Volkswagen's strategic approach to the automobile industry.

BUSINESS STRATEGY

Company overview of
Volkswagen (VW)
Volkswagen is one of the best public sector
automobile manufacturing organisations. The
organisation serves to cater the requirements
and necessities of the million car lovers across
the world. The organisation has been founded
in 1937 by German labour front and is
headquartered in Berlin, which is said to be the
heart of Germany. VW produces more than 6
million cars every year on an average and
based on the business policies as well as
programs. The organisation consists of more
than 6 million employees in various locations of
VW and earns revenue income of
approximately $105 billion and an annual profit
of about $1.8 billion (Volkswagen.co.uk. 2017).

Strategic planning process
Vision:
The vision of VW for formulating strategies is focused
mainly on the ideal condition for carrying out a
business after considering certain issues as well as
concepts of business. The vision statement of an
organisation needs to be broad and allows to focus on
objectives set for performing the business activities for
generating inspiration for the advancement of the
business conditions and as a result advancement of
business procedures as well as perspectives.
Mission:
The mission statement of the organisation gives the
overall purpose of the business activities through
which an organisation tends to serves as well as
provides the requirements of shareholders and
stakeholders. As stated by Ahearne et al. (2014, p.80),
the mission statement describes the current
capabilities of the organisation and the areas through
which the organisation could be differentiated from
other organisations. This statement helps in
determining the goals as well as objectives of an
organisation.

Strategic planning process
Objectives: Objectives are the realisation of the business
goals and the main purpose of the organisational activities
for achieving the desired success. The objectives are
short-term plans made by the organisation.
Goals: Goals are same as objectives, but are long-term
plans and achieving the goals determines the end of the
tasks (Ayuso et al. 2014, p.420).
Core competencies: Core competencies refer to the well
defined as well as proven expertise that an organisation
possesses for differentiating the success from other
organisation within the same industry.
Strategic planning refers to the process of finding out the
resources and objectives of the organisation that are to be
achieved in the near future with the help of existing
resources within the organisation. An organisation aiming
at planning effectively as well as strategically should keep
regular information about the business environment.

Factors for forming strategic planIdentifying current and future competitors: Preparing
a target for the products or commodities helps in judging
reasons and criterions as well as determining the number of
loyal customers to the organisation is considered as the
main factors that are responsible for forming strategic plans
and procedures.
Identifying market share: In order to develop a strategic
plan for the organisation, it is very important to determine
the market share or market distribution of the organisation
in the market, which would help in determining strategic
plans for the organisation (Bryman and Bell, 2015, p.39).
Planning strategies as well as building portfolio: The
basic step of strategic planning is developing a strategic
plan; the strategies are to be framed and planned according
to the organisational policies and create a portfolio based on
the protocols as well as process-based programs of the
organisation. These strategies are then implemented in the
strategic planning process.

Ansoff Matrix
Market development: Developing the market
based on the competitive market
characteristics is considered as an important
criterion of the business activities.
Market penetration: VW has the ability to
apply market entry strategies and enters into a
new market within the automobile industry.
Product development: The organisation
tends to develop its products, which is
considered as an important feature of the
business activities of VW.
Product diversification: The organisation
tries to diversify their products in terms of
texture, quality, shape, colour and size of the
products, which is also considered as important
criteria for the business activities of VW.

Volkswagen’s BCG matrix
Question marks
Lower market share as well as high growth of
market
VW has not witnessed so far lower market share.
However, has experienced higher market growth in
the car market area.
Stars
Higher market share as well as high growth in
market
VW has been able to satisfy the criteria of higher
growth of market share since many years and has
also experienced an increase in the market growth
with the pace of time.
Dogs
Lower market share as well as lower market share
VW has not satisfied the criteria due to the growth due to
the mature progress of the organisation that it has
witnessed till date.
Cash cows
Higher market share as well as lower market growth
The Higher market share has been considered as the vital
criteria for VW, but the organisation does not witness
lower market share.

Directional policy matrix
Directional matrix refers to the comparison or trade between
attractiveness and capabilities. It could be categorised into
three categories namely, average, weak as well as strong
capability as well as unattractiveness, totally attractive and
average attractive. It has been observed that VW is much
stronger in process of cash generation in comparison to the
other automobile organisations globally. Moreover, the
organisation is considered as a leader in epic growth and tries to
develop their business having a maximum intensity as well as
never considers withdrawing its activities from the business as
the best solution, rather tends to face the challenges and
threats that occur in business activities.