Business Strategy Report: VWAG Analysis, Strategic Planning, HND

This report provides a comprehensive analysis of the business strategy of Volkswagen AG (VWAG). It begins with an introduction to business strategy, highlighting its importance in organizational operations and goal achievement. The report then delves into Task 1, examining VWAG's mission, vision, objectives, goals, and core competencies, followed by an analysis of strategic planning factors such as industry, competition, and strengths/weaknesses. The effectiveness of techniques like the BCG matrix and Porter's Five Forces is also evaluated. Task 2 focuses on strategic positioning through organizational and environmental audits, including PESTLE and Porter's Five Forces analysis, and assesses the significance of stakeholder analysis. It also explores VWAG's strategic responses to market dynamics. Task 3 discusses alternative strategies related to market entry, growth, and retrenchment, with a justification for the chosen strategy. Finally, Task 4 assesses the roles and responsibilities of personnel in strategy implementation, analyzes resource requirements, and addresses the use of SMART targets. The report concludes with a summary of findings and recommendations for VWAG's strategic development.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK-1............................................................................................................................................1
1.1 Missions and visions of the cited business ...........................................................................1
1.2 Formulating strategical plans................................................................................................2
1.3 Effectiveness of techniques using under development strategies.........................................3
TASK 2............................................................................................................................................4
2.1 Strategic positioning of Volkswagen group by organisational audit....................................4
2.2 Environmental audit for Volkswagen...................................................................................5
2.3 Significance of stakeholder analysis.....................................................................................6
2.4 New strategy of Volkswagen................................................................................................8
TASK-3............................................................................................................................................8
3.1 Alternative strategies relating to market entry, substantive growth, limited growth or
retrenchment................................................................................................................................8
3.2 Justification of the strategy.................................................................................................10
TASK 4..........................................................................................................................................10
4.1- Assessing the roles and responsibilities of personnel at VW who are charged with
strategy implementation............................................................................................................10
4.2- Analysing the estimated resource requirements for implementing a new strategy for
VWAG. ....................................................................................................................................11
4.3 Smart target and there achievements use in strategies .......................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy plays down a vital role under business and it is very important for the
organisation to conduct their activities as per the strategies and plans which prepared by their
management then only the organisation can conduct their operations in effective manner. The
company implementing those policies and plans and carried their operations accordingly which
helps down business in deciding their mission and visions and also helps them to raised down
long terms objectives. The present report is based on VWAG an auto mobile industry which
performing their operations across the nations. They also prepared their plan and implement it in
their business operations and performed it accordingly and it also covers down missions, visions
and by using that they raised their objectives and the cited business achieved the certain things
with the help of strategical plans.
TASK-1
1.1 Missions and visions of the cited business
Missions
It is a business who also having certain missions and with the help of certain missions
they raising their objectives and the certain things will be very helpful in their business and also
makes their business effective and made them successful in the market. The company set their
mission in such a manner which helps them in increasing their profit and also improve their
performances at the workplace this is the essential reason behind their success and growth(Yin
and Jamali, 2016). The vital elements which helps down company in achieving down mission are
as follows:
 The cited business mission is to form down effective value for each user in their business
unit.
 Their mission is to increase down loyalty and faith towards their customers so which
make their business performance better.
 Their last mission is to create goodwill in the market which directly helps them to
increase their market share in the market.
Vision
 Their vision is to increase down the productivity and profitability in the market and this
can only been possible when large number of customers are attracted towards and also
their organisational individuals will be increased in term of staff, employees etc.
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 Their vision is to provide best services to their clients so that their wants will be satisfied
in each course.
Objectives and goals
 Their purpose is to perform in a better manner and give down efficient results so which
helps them to raise their outcomes.
 Forming down plan and implement it to conduct their business operations successfully so
that directly helps them in raising their objectives.
Competencies
 They also have to determined down the capability under individuals which helps them to
conduct their activity.
 They create their value in the market and increase it with the help of better performances
so it essentially helps down the cited business in achieving their objectives and also lead
their towards the development and growth(Feng and et.al., 2016).
EXAMPLE :- A mission statement is intended to clarify the 'what' and 'who' of a company, while
a vision statement adds the 'why' and 'how' as well. As a company grows, its objectives and goals
may change.
1.2 Formulating strategical plans
In context to such topic, the cited business also have certain roles and responsibilities and by
applying that roles they performed their business operations and which also helps tem to raised
their outcomes. It is very vital for the VWAG to assess down all such factors and implement
their plans accordingly. Thus, it helps down cited business in promotional work regarding their
products and services In different areas and in that regard company develop various strategies so
that it helps down them in accomplishing their goals and they are as follows:
 Industry:In this the company achieved their productivity and profitability on the basis of
strategies and plans which they prepared and implemented those policies and strategies in
their promotional methods which helps down them in making their products successful
and also attracted there customers towards it and that helps them in raised down growth
and profitability at workplace(Nguyen and Nguyen, 2016).
 Competition:The NWAG exploring various opportunities in the market which helps
down organisation in improving their business performance and this helps down
company in matching their business performances with other companies and by that
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manner only the company raise their productivity and profitability under different areas
in the market.
 Strengths and Weaknesses:It also made an impact on companies during formulating
strategical plans. They results and performances under this helps down company in
identifying their strengths and weaknesses which helps down company in conduct
effective operations at different workplaces(Gill and Gill, 2016).
1.3 Effectiveness of techniques using under development strategies
The several methods and techniques are used under the organisation which helps them in their
functioning and performing their operations in effective manner.
BCG matrix
It involves certain elements and they are as follows:
 Stars:It helps down organisation in increasing their productivity and profitability and it is
helpful for the business and also helps down business in accomplishing their goals and
objectives and also helps them in attaining revenue and profits. The certain things can
only been done through by following down different functions(Pierce,2016). It also helps
down business in determining their positions in the market and so the objectives can be
achieved in systematic manner.
 Cash Cows:It helps down organisation In analysing the business locations which will be
very helpful for them to deals with their customers and also marketability can be done. So
by using this process company analysis the issue which involve in their business which
reducing their profitability and also made an adverse impact on their results and
performances. By using that approach, The cited business assess down all such factors
which affect their operations.
 Dogs:This help down company in demonstrating their low growth and market value
factors that impact their business activities adversely. Therefore, in such case company
can minimise their cost and increasing their performances so which helps them in raising
their goals and objectives.
 Questions mark:This process helps down company in analysing their growth and
productivity and in that manner only the company is conducting their functions and
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performing their operations in appropriate manner and the certain things directly helps
down the company in accomplishing their goals(Ojala,2016).
In this report is to be focus on porter 5 forces model are as follows :-
 Supplier power. An classification of how easy it is for suppliers to drive up prices. This
is driven by the: number of bourgeois of each essential input; uniqueness of their product
or service.
 Buyer power. An classification of how easy it is for buyers to drive prices down. This is
driven by the: number of buyers in the market; importance of each individual buyer to the
organisation.
 Competitive rivalry. The main driver is the amount and capability of competitors in the
market. Many challengers, offering undifferentiated merchandise and services, will
reduce market quality.
 Threat of substitution. Where close substitute products exist in a market, it increases the
likelihood of customers switching to alternatives in consequence to price increases.
 Threat of new entry. Profitable marketplace attract new entrants, which erodes
profitability. Unless officeholder have strong and durable barriers to entry.
TASK 2
2.1 Strategic positioning of Volkswagen group by organisational audit
Volkswagen shortens to VWAG is a German auto mobile company which is one of the
largest auto makers worldwide with the highest sales in year 2016. The company owns its
existence for last 80 years. Cars launched by company are known for their comfort and luxury
models. The firm has made its presence known at global level. It has many factories all over the
world that manufacture or assemble the vehicle for local market.
Organisational audit helps the firm in finding its strengths and weaknesses. It also assists
in finding various issues and the areas where company lacks so that firm can take necessary
actions (Cassidy, 2016). Organisational audit will help Volkswagen in enhancing their
performance by analysing the strengths and weaknesses. By the same, they can come up with
good strategic planning that will assist firm in development. Porter five is one of the great way
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through which organisation can evaluate their performance. Its one of the powerful tool that
defines the balance of power. It has five forces mentioned below
 The threat of new entry
 Power of suppliers
 power of buyer
 Competitive rivalry The threat of substitution
Barrier to new entry: The barriers to new entry are high as starting a start-up in
automotive industry require funds and costs. Though the resources are easily available and not
that restrictive but dominance of bigger company make it difficult for the new company to settle.
The new competitors that generally arises are often come as subsidiary of other being companies
and rivals (Hill, Jones and Schilling, 2014). Though Volkswagen does not have much threat of
new entry but they should be aware of the marketing tactics of their rivals.
Powers of suppliers: The differentiation of suppliers in the industry of auto mobile is
low. It is easy to switch suppliers to other as the switching cost is low which lead to decrease in
their power. Furthermore, there is large amount of suppliers in this industry which provide many
options to firm.
Power of Buyer and substitution : Consumer are one of the important factor of
Volkswagen. There are many option available to the consumer which make them fickle and it
becomes difficult for Volkswagen to attain the loyalty of their service user. With so many option
threat of substitution also increased. Its necessary of Volkswagen to come with innovative idea
and good services so that they can attract customer toward the firm.
Competitive rivalry: In current time the rivalry in the market of automotive mobile is
highest there are many companies who is coming with various idea that it has become hard to
find stability in market. In addition to this insurgence of Japanese auto maker manufacturing
domestically (Rudzinski and Uerz, 2014). The competition is becoming more heated.
Through this analysis it has come forward that with increasing rivalry and chances of
being replaced its necessary of Volkswagen to come up with strategy that can help them in
surviving in this market. Along with this they should also pay more attention toward the attaining
the trust and loyalty of customer so that they can be connected to the firm for lifetime.
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2.2 Environmental audit for Volkswagen
PEST analysis is quite an effective model that can be used by Volkswagen in order to
analyse the external environment and its impact. Political factor: Volkswagen is a global firm that has been operating its activities in
various countries. It is necessary for the firm to understand law of each nation and form
its strategy according to the political situation of nation. It can support in minimizing
legal issues and handling consequences effectively. Economic factor: Automotive industry considered as one on the highest income
generating sector which contribute well in the economy development of nation
(Brockhoff, Chakrabarti and Hauschildt, 2013). But it also has to pay attention on some
economic crisis that can have its impact on the working such as European debt crisis. Social factor: Society plays a big role in the development of this industry. Life style,
culture changes impact on the business unit indirectly. Cited firm has to produce such
automotive vehicles which can fulfil needs of consumers.
 Technological factor: Technology plays a big role in the success of manufacturing.
Volkswagen is known for the best use of technology in this industry (Tomczak, Reinecke
and Kuss, 2017). The firm needs to bring innovation in their technology so that they can
compete with their rivals.
2.3 Significance of stakeholder analysis
Stakeholders can be described as those people who directly or indirectly get affected by
various decision on the firm. They can also influence the judgement of the company.
Stakeholders of VW are customers, suppliers, government, etc.
Stakeholder MatriX
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Name of
stakeholder
Level of Interest
in business
Influence of
stakeholder
Type of
information
shared with
stakeholders
Frequency of
information
sharing
Customers Medium High New product
launched, Quality
of product, Right
information about
products, Offers
High
Employees Medium Medium Products,
satisfaction
market segments,
expansion, salary
high
Suppliers High Low Profitability,
expansion plan,
long term
contract, growth
in purchasing etc.
Medium
Government High High Overall earning,
taxes, tax
recipients, job
opportunities,
making sure that
all activity of firm
is legal (Mehren,
2016).
High
Shareholers Medium Medium Profit growth,
share price,
Medium
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dividends
Table 1: Stakeholder analysis of VW
Evaluation of stakeholders will help Volkswagen in understanding the power of each
stakeholder. Through analysis, it has come forward that customers have big influence on the
working of firm. Its necessary for Volkswagen to keep it into consideration while making new
strategy.
2.4 New strategy of Volkswagen
Volkswagen is the German auto maker. It is the most popular brand in across the world.
Current goal and strategies of the cited firm is TOGETHER its main aim to attract customer
focus and needs((Scholes, 2015)). Which is very important for the company. As market position
is very competitive and challenging. It needs to implement new strategies so that it maintain the
customer satisfaction. It is important for the strategic manger to identify the external
environment and the customer needs as well. Volkswagen needs to expand their business and
provide its showroom in other countries as well(Verbeke, 2013). This strategy will give long
term profit and attract more numbers of customers. It needs to expand their business on the basis
geographical area. Through this process Volkswagen helps to reach more customers and earn
maximum profit.
Adding to that Volkswagen also needs to analyse the effects of strategic plans by SWOT
analysis. This analysis model helps company to check the external or internal environment. On
the other side new strategy of cited company increase the overall income ratio and attract more
new customers((Sabherwal, Hirschheim and Goles, 2013)).
Effects of New strategies
 Increase customers: this new strategies helps company to attract more new customers.
Like Volkswagen expand their business globally which increase the brand value and
profit revenue as well
 Increase Annual Turnover: With the help of new franchises company will get more profit
revenues. By this strategy they increase their market share and competency in market.
They had adopted System 2025" close by the change of the centre business includes the
foundation of a cross-mark versatility arrangements business. The new unit will create and gain
offerings customized to client prerequisites – fixating on and beginning with ride hailing, i.e. on-
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request versatility administrations. Different administrations, for example, robotaxis, carsharing
and transport on-request will then be assembled around this core. The Volkswagen Group as of
now secured its first a dependable balance in the ride hailing section toward the finish of May,
when it put resources into a key association with on-request versatility organization Gett.
Cost leadership in the Volkswagen is the new strategies that the company had adopted in which
they use to give various discount and offer on the new vehicle. The new variants are launch with
the less price.
TASK-3
3.1 Alternative strategies relating to market entry, substantive growth, limited growth or
retrenchment.
Volkswagen company make a long term strategic plans to accomplish the objectives of
the company. In the auto mobile industries there is high work load pressure there are many
competitors to compete with the Volkswagen((Mithas, Tafti and Mitchell, 2013)). On the other
side Volkswagen itself is very popular company in German. Its services are up to the mark. It
helps company to maintain its position in the long term market. Volkswagen needs to adopt some
of these strategies to
Market entry
limited growth
Retrenchment
Market Entry strategies: It is a pre planned strategy of the company to deliver the services in
systematic manner. This strategy helps company to identified the potential competitors and the
number of customers. When company entered to the market it should need to measure the
following aspects like price, competition, trade barriers etc(Okpara, 2014). Volkswagen may
follows the different strategies aspects like Franchising, Exporting, Licensing, joint venture,
Merger and acquisitions. For the benefit of Volkswagen it need to adopt franchising strategy
which gives new potential customers and profit.
Limited Growth Strategy: Every company wants to expand their business to just get the high
profit. Company adopt limited growth strategy to achieve the high level of performance. Like
Volkswagen make limited growth strategy to full fill their long-term growth. Some limited
growth strategies are:
Market Penetration
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Market Expansion
Product expansion
Diversification
Acquisition
Retrenchment strategy: In this retrenchment strategy in which company reduce their business
operation plans and reduce some expenses which is unnecessary in the company. In this process
they also decrease their business plan to reduce the work pressure for that they need to adopt
three retrenchment strategies which are Divestment, Liquidation and Turnaround. These
strategies help company to reduces the operational cost on other side they also reduce there work
in other departmental as well. Like they also reduce there some services like those services
which is not so much popular.
According to the above conclusion it explained about the different strategies of limited growth,
retrenchment which helps company to reduce its services or operational activities which is not so
much popular
3.2 Justification of the strategy
VW is performing well in the market and it has become the market leader. But there are
many other competitor of the company which affects its growth. It is essential for the
organization that to take support of effective strategy so that it can grow well in the market and
can sustain in the market for longer duration. VW has taken support of franchise market entry
strategy. It is most suitable and correct strategy for the cited firm. By giving franchises to other
business in other location entity will be able to expand its operations. This will support in
spreading its brand name and increasing sales revenues of the corporation.
VW needs to concentrate the firm to which it is going to give its franchise. It needs to
look upon the market image of the company and its market share. According to its strategic
position it needs to give franchise to the local business. They would be able to run the operation
in new location successfully(Morgan and Gomez-Mejia, 2014). VW is the brand name so that it
open its showroom in new location then it would attract more people and maximum buyer will
buy its cars. This will assist in increasing revenue of the company.
Apart from this VW is adopting retrenchment strategy in which it is minimizing
manufacturing of such products which are not in demand. It is most suitable strategy and it helps
the firm in gaining competitive advantage. By minimizing production of such good's entity
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