Business Strategy Report: Analysis of VWAG's Strategic Positioning

This report provides a comprehensive analysis of Volkswagen AG's (VWAG) business strategy, encompassing various aspects of strategic planning and market positioning. The report begins with an introduction to business strategy and its importance for organizational growth, followed by an eva...Read More

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Organisational goals, objectives missions or vision help in develop strategic plans............1
1.2 Important factors while making strategic plan......................................................................2
1.3 Various techniques used in formulation of strategic business plan......................................3
TASK 2............................................................................................................................................4
2.1 Strategic positioning of VWAG............................................................................................4
2.2 Environmental audit for VWAG company...........................................................................5
2.3 Importance of stakeholders...................................................................................................6
2.3 New strategy of Volkswagen................................................................................................6
TASK 3............................................................................................................................................7
3.1 Strategies related to market entry or substantive growth......................................................7
3.2 Justifying the selected strategy..............................................................................................7
TASK 4............................................................................................................................................8
4.1 Roles and responsibilities of personnel.................................................................................8
4.2 Requirement of resources for implementing new business strategy ....................................8
4.3 Smart targets to achieve strategy implementation................................................................9
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy help in providing right way for growth and development of
organisation. Every organisation should consider all internal as well as external factors while
making strategies because both internal or external affect the organisational performance at
higher level (Aaltonen, 2011). Company can get success with great business plan. This report is
based on Volkswagen, which is leading company of manufacturing of car. In this project, various
process of strategic planning is evaluated by company to get strong idea for the growth and
development of firm. Various method or approaches of strategy has been evaluated and also
understood that how to apply plan or strategy in the organisation.
TASK 1
1.1 Organisational goals, objectives missions or vision help in develop strategic plans
Every organisation big or small can achieve its goals and objectives by satisfying
customers needs or wants. Company retained their customer for long time period and it also help
to attract more and more people by providing high quality of products. Organisation use effective
strategic plan to upgrade their existing position in the business market place. It is responsibility
of manager to develop strong strategic plan to achieve goals or objectives in specific time period.
So, every company should set their own goals, objectives, vision or mission which help in
making effective plans or strategies (Al-Turki, 2011). Various goals or objectives of Azimo are
define below:
Vision: The Azimo company have vision to satisfy customers needs and wants. They provide
satisfaction to their workers, suppliers, clients or customers by providing them appropriate goods
and services. For the success and growth, company should change their plans or strategies so that
they can provide better service to their customers.
Mission: The mission of Azimo company is that they want to make money transferring system
very simple or easy for all. They provide goods and services in more than 90 countries.
Objectives: The main objective of Azimo company is to provide satisfaction level to their
customers or clients to increase their profitability as well as productivity of the company.
Goals: The Azimo is freshly constituted company which increase sufficient financial capital in
some few years. To enhance their profitability, growth and productivity company provide better
services to their customers according to their wants and demand.
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Core competencies: Azimo company give more importance to market research to identify actual
needs or wants of customers. It is biggest strength of the organisation which help in growth and
development (Al-Turki, 2011).
Competitors: The Transferwise company give tough fight to the Azimo firm firm as both
organisation dealing with bank and specialised in relocating funds from one nation to another
nation, letting transfer of different currencies to host country.
Customers: Without them any company can not achieve its goals and objectives. So, it must to
satisfy customer's needs and demand by providing them high quality products and services
according to their requirements.
Suppliers: The suppliers provide raw material, components and equipments to company so that
firm can perform their task in proper way. They also assist to control the supply chain and
influence the terms and pricing when few substitutes are available in the market place.
External environmental factors: While making important decision, strategies and plan for the
growth and development of the company, manager should considered all external factors of
environment which can influence performance of firm. External factors such as suppliers,
customers, government policies and many more.
All these are some aspects of Azimo company which play very important role while
making strategic plans or methods for the growth of the company. Any company can not achieve
success without considering this elements in their business organisation. Organisational goals,
objectives, vision, mission play very significant role in the strategy making process.
1.2 Important factors while making strategic plan
Every company can lead growth and success in business market place with the help of
strong strategy plan. It also help in providing various opportunities for the growth and high
profitability of the firm. By implementing effective strategic plans company can get various
benefits like increase financial capital, competitive advantage, increase market share and many
more. Manger of Azimo company considered all these aspects while making strategy for the
business, which are as follows: New innovation: Every manager should considered some innovative ideas or plans to
grow their at next level of growth in less time period. In today's time because of
globalisation, competition increase so much every company need some innovative idea
to survive in such kind of competitive business market place.
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 Management: This function help to manage all task and activities within the
organisation such as technical, employees, capital and so on. Manager focus all thses
elements while making any strategy plan for the growth of the business. Strong Communication: Effective communication help organisation to maintain
positive working environment so that company can attain their goals and objectives in
certain time period. It is considered as important element of the organisation.
 Stakeholders: The success or failure is highly depend on the stakeholders of the
company like customers, suppliers, investors, employees and many more. No business
organisation can get success without considered all this elements while strategy making
process.
All the above, elements help organisation to compete with their competitors in the
enterprise market place through effective tools and techniques. Without considered all these
factors any company can not achieve goals and objectives.
1.3 Various techniques used in formulation of strategic business plan
Volkswagen company need effective tools, techniques or strong strategies to compete
with their competitors in business market place. Effective strategic plan of enterprises help them
to accomplish their desired goals and objectives. Also, help to enhance their result and can attain
competitive benefits through strategy plans or methods (Bryson and Alston, 2011). There are
some tools or techniques which are used by Azimo for rising up its business plan or strategies,
which are as follows:
Ansoff's matrix: This is most useful technique, which is used by Volkswagen company while
making strategies for the growth and development in competitive market. It help in providing
several strategies plan to managers, marketers or executives so that they can easily enhance
growth in business environment. There is four strategies according to this concept for the
development of various kind of companies. These are as follows: Market penetration: In this concept every company increase their growth through
focusing on their existing products or services. It help company by providing many
guidelines to increase their level of profit. By decreasing cost or increasing advertisement
of existing price company can attract more customers. Diversification: According to this concept, Volkswagen enterprise present new product
within the existing market to increase their profit level (Watson, 2013).
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 Market development: According to this strategy every company try to expand their
business in different location to generate more profit in the market place. Improvement in services: Volkswagen firm can enhance their growth and development
in economy by implementing some innovative ideas in their existing products and
services.
BCG Growth sharing matrix: Bruce D. Henderson introduce this concept. It is used by so many
companies for their portfolio analysis, strategic or product management. Basically, it is analytical
tools which help in analysing performance of company in business market place. Dogs: By using this style Volkswagen organisation loose their all capital funds and get
bankrupt. This concept is not useful in company who want to grow their business at
higher level in market as it can not increase the financial profit of any company because it
is sign of less market growth and development rate (Chakrabarti, Vidal and Mitchell,
2011). Cash cows: This method is useful in Volkswagen to increase their profit level and
enhance their growth or development in business environment. Question marks: It also present good growth of financial many company select this style
to get more profit and growth in market place.
 Stars: This method is currently used by Azimo company which help to increase their
financial profit level or market growth.
Hence, all these techniques help Azimo while making their business plan strategies to
increase their financial profit level in business market place.
TASK 2
2.1 Strategic positioning of VWAG
Organisational audit help to evaluate business position in market place by determining
internal as well as external factors in effective manner. There is various important method used
for organisational audit which help organisation to increase their profitability by using right
techniques or method (Cornish and et. al., 2011). VWAG company should use SWOT analysis
which help to know current strengths, weaknesses, opportunities or threats of company in
competitive market. The SWOT analysis of VWAG is as follows:
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Strengths: The VWAG company is specialised in car production. There is several important
points of company some of them are as follows:
 It is known as first newcomer of car in business market place
 Strong image of brand in business market place
 Company has its branches across 27 countries overall world
 They have large number of youth employees with high skilled or knowledge They provide positive environment within the organisation
Weaknesses: Every company have some weaknesses which makes organisation weaker. Some
weak point of VWAG are as define below:
 There is so many controversies occurs in the market place about the company which
affect the performance of organisation and also reduce brand loyalty.
 The firm have limited development or growth as it is rivalry company. In business environment competition has been increased in past few years.
Opportunities: There is so many factors which can give various opportunities for future growth
to company (Verbeke, 2013).
 The company can expand its business in other countries to increase their level of
profitability
 By using some innovative thoughts and idea company can improve their existing
products to attract more customers. Company can acquire or merge with other car manufacturer company for the growth of
business
Threats: There is so many factors which can create difficult situation for the organisation. There
is some threats of VWAG are as follows:
 Natural disasters can create problem for firm
 Regular changes in political or legal factors can affect the performance of company
These are important elements which is considered by company manager while making
strategic position of firm (Cusworth and et. al., 2015).
Bowman's Strategic Clock: This model used in marketing sector to analyse the position of firm
in comparison with their competitors in business market place. The Bowman's strategic model
provide high competitive advantage to Volkswagen company. It help to establish as well as
sustain a competitive position in the economy of market. This model include 8 steps which are
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low price and low value added, low price, hybrid, differentiation, focused differentiation, risk
high margins, monopoly pricing and loss of market share. All this factors provide many
competitive benefits to the company to maintain their stability in business environment.
2.2 Environmental audit for VWAG company
Every company is affected by its surrounded area which can influence positive or
negative affect on performance of company. So, manager should evaluate all macro factors while
taking and important decision. By using PESTLE analysis company can easily find its macro
forces of environmental.
PESTLE analysis:
Political factors:It include all those factors which is controlled by government body or any legal
authorities. They can affect the organisation's economy as well their stability in market place.
Example: Any change in present political policy which influence the performance of company in
business market.
Economical factors:There is so many companies who faces many problems due to economic
issues for example: change in price of raw material can influence negative impact on the
performance of Volkswagen (Simon, Fischbach and Schoder, 2014).
Social factors: In all country people have different needs and wants, there is so many different
groups which require some unique features in their cars. It is very important for company to
fulfil customers needs or demands. For example : Change in demand, perception and need of
customers.
Technological factors: Rapid change in technology put lot of pressure on Volkswagen to create
something innovative in their cars. For example: Introduction of new tools and advance
technology.
Legal factors: Continuous change in legal laws and policies can influence the company's
performance at high level. If any company do not follow laws then they can suffer from financial
penalties.
Environmental factors:There is so many countries who banned the sell or purchase of crude
base cars which affect Volkswagen highly (Fleming, 2011). Company has to ensure that its
activities and operation does not effect natural resources and environment.
Every company should considered all these factors while decision-making process for growth
and development in market place.
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2.3 Importance of stakeholders
For the growth and development in business market place every company provide more
attention to stakeholders like:
Customers – Company can not generate its sale and revenue without customers so, it is
highly important for the firm to provide good quality products to satisfy their needs and wants.
Employees - All activities and task are performed by employees to achieve goals and
objectives so it is must to provide them suitable working environment.
Investors – This are those people who invest their funds and capital on the share of
enterprise. So, Volkswagen should maintain good relationship bond with them.
Suppliers – This are the people who provide raw material to the enterprise for the
production process. Without suppliers any firm can not perform their activities in well planned
manner.
It is responsibility of organisational manager to provide more importance to stakeholder
so that company can fulfil their needs and wants. Both employees or stakeholders are those who
can influence the organisational performance at higher level. The stakeholder are persons who
invest in growth of company for better growth and development. On the other side suppliers
provide raw material to company for production or government makes various laws or policies
for all companies which can affect the company's performance.
The stakeholder of company help to determine the needs and wants of customers so that
company can satisfy them by providing products or services according to their needs because
without satisfying customers no company can maintain their position in business market. Hence,
every company should provide products in high quality to satisfy the demand of customers to
generate high profit or stability in market place for long time period (Gabrielsson and
Gabrielsson, 2013).
2.3 New strategy of Volkswagen
After analysing or evaluating micro or macro factors company can adopt new or
appropriate strategies or plan for the growth and development of business organisation. Without
evaluating both internal or external factors company can not run their business successfully.
Volkswagen make new strategies or plan and implement them in proper manner to overcome
from problem or difficulties. There so many problem or challenges arises in business
environment to overcome with all difficulties company need more strategy or strong plan for the
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growth. The company have joint venture in china which is continue in other country it help in
minimising the amount of investment. The strong strategy or joint venture is best for the
company to improve their current market position in the economy (Scholes, 2015).
2.4 New strategies for organisation
By making new plans and strategies company can grow their business level in competitive
market place. Strong strategic plan help in generating high sales and revenue in low investment
of capital. Merger: Company can develop their business in market by merging with other developed
large company. Merger is legal consolidation of two enterprises into one entity. Acquisition: In the ownership, shares, assets and equity interest transfer from one
company to the other.
 Licensing: Any company can grow their business level by licensing, trademark, patents,
copyrights and designs which help in generating unique brand image in market place.
TASK 3
3.1 Strategies related to market entry or substantive growth
There is so many strategies which help company to achieve their desired goals or
objectives in specific time period (Gershkov and et. al., 2013). For the market entry or
substantive growth Volkswagen company have to evaluate the various aspects which are as
follows: Market entry: For expansion of business company require to take help of new marketing
strategy so that they can enter into new market easily. The Volkswagen make new plans
or strategies to create bond with local enterprise. Substantive growth: Company can produce raw material by it self to create substantive
growth in the market place in less cost. Limited growth: Company use this strategy when they have less amount of capital or
resource for smoothly their operation effectively. Company can come over this problem
by tie up with any other manufacturing company.
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 Retrenchment: With the help of this, company can provide high discounts to their
customers which help to retained their customers for long time period. It provide various
benefit to company who suffer from high debt (Sedereviciute and Valentini, 2011).
All these factors play very important role while making strategies used by Volkswagen
for growth and development. Cited company can enhance its profitability as well as productivity
level by making strong strategies and plan. This will help in expanding business in other market
segment where firm have no operational activity.
3.2 Justifying the selected strategy
Volkswagen company suffer from low financial capital and huge penalty of $19 dollars,
which is very important for company to recover this cost. The company can follow strong
strategy to overcome with this problem.
 By maintain their competitive advantage in the market place
 Through making strong strategies of growth company can pay all penalties without
affecting any their existing project or tasks.
 By allocating optimum use of resources in their production process
The limited growth strategy is best for the growth and development of Volkswagen company by
consuming their available human resources.
TASK 4
4.1 Roles and responsibilities of personnel
There is so many peoples involves who give full affords to achieve organisational goals
and objectives. All people have different roles and responsibilities according to their skills and
knowledge within the organisation. When company implementing any new strategy or plan they
need more people (Grant, 2016). There are some significant role of people in strategy
implementation are as define below: Senior managers: In every organisation there are some senior manager who decide rules,
policies, regulation or strategies for the growth of company. They help to lead company
at next level of growth in specific time period. When company implement any new
strategy or plan in existing activity to increase its profitability or productivity. Mangers: This are the persons who communicate various rules and regulation to all
employees within the organisation. While implementing new plans or strategies in
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company manager need to provide all information to senior manager for appropriate
frame of policies within the organisation so, that firm get high profit in business market
place (Paroutis, Bennett and Heracleous, 2014). Research staff: They conduct research to identify the needs or demand of customers
which help company in decision making process. The help to enhance the growth and
development level of company by providing products and services to customers
according to their demand. It also help to identify the current trend, fashion of
preferences of customers in market place.
 Engineers: They makes all required changes in cars on the basis of research to fulfil
needs and wants of customers. They have very important role or responsibility to upgrade
the products machines on the basis of customers demand or want.
4.2 Requirement of resources for implementing new business strategy
The Volkswagen is well known company for their latest car model as they manufacture
very unique cars by using available resources like financial support, raw material, employees and
many more (Hill, Jones and Schilling, 2014). Financial support: The company can not run smoothly in business market place without
sufficient amount of capital. They need high capital to purchase new machinery or raw
material to operate their task and activities . The Volkswagen company have to pay large
amount of money to US government so, company should utilise their financial resource
in effective manner.
 Human resource: They play very significant role in the success and failure of company.
Without labour company is nothing, they need high skilled employees in their
organisation for production or all financial process (Macnamara and Zerfass, 2012).
All these elements are very important in company. Without this resources Volkswagen can not
make any strategies or plan for growth and development of company.
4.3 Smart targets to achieve strategy implementation
Volkswagen is multi-national organisation who perform all task and activities to maintain
its market image in economy. The company introduced its new strategy name as limited growth
strategy which help company to utilised their resources in proper manner. The new goals of
Volkswagen is based on smart target which help organisation to achieve their goals and
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objectives and enhance their growth in next level. There are some goals of company are define as
follows:
 Company increase their production level by 20% within around two years
 Also, target to enhance their sales by 15% in next two years by using strong strategy or
plan
All these smart objectives of Volkswagen company help to enhance their growth rate higher in
competitive business market place (Huang and et. al., 2013).
CONCLUSION
From the above report it has been concluded that in the business environment there are
lots of organisation which exists but there are very few of them who are able to sustain their
business. The reason behind this is that these firms have a business strategy which briefs their
goals and targets which they have to attain. It is the techniques and tools which they have to
adopted to get want they want. But before framing any business strategy they need to analyse
their internal and external environment which they can do through SWOT and PESTLE analysis.
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