Business Strategy Report: Analyzing Volkswagen's Strategic Approach

This report provides a comprehensive analysis of Volkswagen's business strategy. It begins with an introduction to business strategy and its importance for organizational success, highlighting the need for effective strategies to achieve long-term goals. The report then delves into a detailed organizational audit, including a SWOT analysis to assess Volkswagen's strengths, weaknesses, opportunities, and threats. An environmental audit using PESTLE analysis is conducted to examine the external factors impacting the company. The importance of stakeholders in strategy making is discussed, followed by an exploration of alternative strategies and the justification for the chosen approach. The report also addresses the roles and responsibilities in strategy implementation, analyzing asset estimation and evaluating SMART targets. The report concludes with a discussion of the implications of the analysis and references used.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK2.............................................................................................................................................1
2.1) Auditing of firm to determine strategic position.................................................................1
2.2) Environmental audit of firm................................................................................................3
2.3) Importance of stakeholders in making strategy...................................................................6
2.4) Organisation's new strategy.................................................................................................7
TASK3.............................................................................................................................................8
3.1) Alternative strategies...........................................................................................................8
3.2)Justification for chosen strategy. .........................................................................................9
TASK4.............................................................................................................................................9
4.1) Roles and responsibilities of different people in strategy implementation..........................9
4.2) Analysing asset estimation for new methodology. ...........................................................10
4.3) Evaluating SMART target's commitment. ........................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy is a method through which an organisation can be able to perform all its
actions and performance in an appropriate manner that can be very useful for a firm to attain its
objectives and long term goals and standards. This is very essential as to determine company's
goals, mission and vision. This will lead in obtaining firm's sustainability and long term growth
in market. If strategies and tactics are not prepared in an appropriate manner, then a smooth flow
of all operations can not be done (Astrachan, 2010). So for effective outcomes it is very
important for a company to make new and effective strategies.
Volkswagen is a most renowned company in the sector of auto-mobile. Its activities and
functions are very actively performed by it in market. Large number of customers is affording for
products that are availed by it. It has been noticed that company is listed in top 10 sellers of car
in market. Its most sold vehicles are Volkswagen Passat, Volkswagen Beetle and Volkswagen
Golf these are having very attractive features and are bought by customers in very large number.
626,715 employees are working at present in this firm. In this report, business strategy is been
performed to understand effectiveness of it in organisation's growth and development.
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TASK1
Covered in PPT
TASK2
2.1) Auditing of firm to determine strategic position.
Organisational audit means to identify each and every aspect of a company which is
related to its liabilities and assets. There are many factors that are indulged in this as this will
help in knowing all the elements that is having its impact upon operations and functions of an
organisation. Company's position in terms of finance, infrastructure, capabilities and capacities,
these are things which are very necessary to understand so that they can be able to make strategic
plans which will help in competing in market with its competitors (Bharadwaj and et.al, 2013).
As to carry out an effective organisational tools, it is very essential to perform a SWOT analysis.
This is a technique through which actual company's present state can be understood so that its
aim and set standards could be attained in appropriately. With its help company could be able to
know its internal and external factors which are in favour and against of operations and functions
of it.
SWOT analysis
Strength
 Strength of Volkswagen is that, it is
been structure in an effective and
proper manner. It is having large
number of product in its portfolio.
Company is following very appropriate
framework of work which is supporting
company to function in smooth manner.
 Its presence has covered vast area and
is also in very strong manner (Burlton,
2010). It is very fast manner expanding
its business in market.
 It brand image in very good and its
establishment in market in very strong
Weaknesses
 One of the biggest issue considered s
weakness is the emission scandal that
took place which has spoiled image of
company in market.
 Competition is one of the factor that is
affecting its products and services as,
firm is reducing its price.
 Positioning of market in various places
are very weak Like in India, Africa etc.
 Its parent brand is not as strong so it is
its weakness.
 Performance of employees has gone
down and it is resulting poor operation
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and an effective foundation has been
made by it in market.
 Its services are very satisfactory so it is
very effective, this has made in
renowned in market by all.
 Operations and functions are performed
in a very well set manner. This will
lead in resolving issues that problems
that are related to its activities.
 It performs research and development
activities so that efficiency and
effectiveness can be enhanced so that
employees could be able to handle
customers and serve them in
appropriate way.
and function. Also manpower's skills
are not meeting to the requirement.
 Productivity and scandal issue has to
resolved yet will has created company
an issue that has to be effectively
handle otherwise more problem could
be faced (Campbell Edgar and
Stonehouse, 2011).
Opportunities
 There are various opportunity that can
be availed by company. It can invest in
technologies and methods that are
adapted in present scenario. This will
help in increasing efficiency of
employees as well as firm and
appropriate result can be attained
(Cinquini and Tenucci, 2010).
 Those places and areas where company
has to tapped yet can be covered by
them so that effectively market shares
can be captured.
 Demand for product by customers are
very high so company has an advantage
to raise their prices and could be able to
Threats
 Competitors are one of the major
challenge that company is facing at
present time. As market entry can be
done by any one new firms also many
those are already settled in market are
giving very tough competition.
 Emission scandal has very badly
spoiled the brand image of market.
 Company is also facing the situation
that are related to laws and regulation
that are carried in different nations. As
Volkswagen is performing in many
country hence it could face many such
problems as because there are different
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generate more revenues.
 Fuels efficiency can also be increased
by company.
 Volkswagen can innovate new ideas
and thoughts in its products and
services so that more and more
customers can be attracted. New
modification in designs of cars can be
done by it, this will help firm in
performing more appropriate manner.
rules in various country.
 Financial and management has shook
due to the recession that has took place
in 2009 (Cooke and Saini, 2010).
2.2) Environmental audit of firm.
Environmental audit is an aspect where company could be able to understand all those
external factors that has its impact of operations and functions of an organisation. With help of
this company could be able to make strategies as to overcome challenges and issues. The affect
of these factors can be both in positive as well as in negative manner, so what so ever situation is
been faced by company planning ca be made according to that (Dong-Hun, 2010). As to better
understand those impacting factors it is very important for firm to carry out an audit with support
to PESTLE analysis.
PESTLE analysis
Political factors These are the factors which are related o
organisation's operations and functions in a
direct way. Company faces many problems
related to political aspects as because it is
dealing in many market. Around 150 country is
been dealt by Volkswagen (Hamel, 2012).
Political rules are very different in various
country as to carry out operations and
functions in more effective manner company
need to follow them appropriately. Also
political factors create a situation of risk that
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has to be managed by firm effectively
otherwise it can be threaten by others and can a
situation get arise where it can be kicked out of
the market.
Economical factors These are the factors that are having a direct
connection with organisations operations and
functions. It is very essential for a company to
concern about economical aspects as because
this will affect a firm in very adverse manner if
not considered appropriately (Hsieh and Chen,
2011). Interest rates, cost of labour, economic
growth and inflation rates are the factors that
are related to this. So it is very essential for a
company to focus about it as because it has
positive and negative influence upon functions
of firm. Products of company is quite low still
many face situation in affording it so price is a
big issue that company is facing regarding
economical aspects.
Social factors It is an aspect which is very difficult to
understand as because in it customers culture
value and preferences are considered the most
(Meskendahl, 2010). It is very essential for an
organisation for consider about customers
needs and wants as because this will help in
sustaining in competitive market. Making
customers satisfy needs a great effort and is
very necessary.
Technological factors At present situation technologies are very
much used by all, hence it is the factors that
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has a direct impact upon operations of
Volkswagen. As to compete in competitive
market it is very essential to be get updated
with market needs and technology is the
current revolution.
Legal factors This is one of the environmental factor that is
having its impact upon organisation. As
company is dealing in many nation, laws and
legal aspects are very different form the native
land so it has become very necessary for
company follow them to be get protected from
illegal acts (Montgomery, 2011).
Environmental factors As company is manufacturing cars pollution
get created as iron is transformed into steel so
that body can be made for cars. The waste is
discarded into water which is polluting
surrounding, hence it is very necessary for an
organisation to tale care of environment and no
one get affected through their operation and
activities.
2.3) Importance of stakeholders in making strategy.
Stakeholders are those people who are connected with organisation in direct of indirect
manner. They are the who who has many contribution in firm, planning, operations and
functions. Communities, employees, shareholders, customers, investors all are included in
stakeholders of an organisation (Nordqvist and Melin, 2010). They are very important and plays
an essential role in the firm also they assist management of company to make effective strategies
and operations appropriately. Stakeholders analysis is a way through which company could be
able to know aspects that are related to stakeholders views and thoughts for a company.
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Few steps are involved in analysing stakeholders, they are as follows-
 The foremost stage is to identify those people who are impacting operations and
functions of a company and also whose presence in very much required by firm to carry
out effective performances (Reinhardt and Stavins, 2010).
 Next, management of firm need to determine what all are the powers and rights that are
pertained with stakeholders. With the help of a grid system this aspect can be identified in
an appropriate manner.
◦ Those members who are having higher authority and high interest will be able to
guide in more appropriate manner so that a proper strategy can be made for carrying
out smooth functioning.
◦ The one who are not having authority and are having less power and high interest
will also suggest company with many thoughts and views but the things is that they
will not involve much in planning and strategy making of Volkswagen company
(Scholes, 2015).
◦ Stakeholder who is with low responsibility and low interest, they will not be able to
affect operations and activities of firm and also they will not impact in strategic
planning process.
 This is the last stage where analysis of strategy is performed where management of the
firm and stakeholders has to create a strong understanding amongst them. This is very
helpful in providing better services to customers and a proper planning can be made.
Internal stakeholders – There are several such stakeholders importance of which is
discussed below:
 Employees - Employees are the backbone of the company as they work in the
organization and they give advice on financial or any other matter in the organization.
 Owners - Owners own the company and they manage all employees and work of
Volkswagen and take care of sale of cars etc.
 Shareholder and management of the company - Shareholders are like owners who do
trading of securities so they are important for trading purpose. Management manage all
work related to sales,manages and give training and supervision to all employees and
control them. So all are important for company to achieve objectives.
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External Shareholders- It includes customers,suppliers,creditors,banks,media, ngo's
etc.
 Customers – They are main part of company as they purchase products of company and
thus increasing profits of company.
 Suppliers - They help in supplying the products according to demand of customers at
reasonable rate to the company.
 Creditors - They are important as they give money at reasonable interest to company.
 Banks – It check the financial position and give loans to Volkswagen at reasonable
interest so due to this company can increase their business and profits.
 Media – It helps in promoting the company by giving advertisements so there is huge
promotion worldwide through media. NGO – It collaborate with company after evaluating financial resources , other matters
and then do spend money in charities and to contribution for poor and disabled children.
Society is also important as gives respect to company as it receives good products from
company so due to it there is a good image of company in front of society.
Importance of stakeholders for the company is stated as under: -
In Volkswagen, stakeholders provide various opinion and suggestions to organisation so
as to make effective strategies. They are also liable to give financial support so that an
appropriate planning can be made which will lead in attaining organisational goals and
objectives. With the support of stakeholders, like – employees, management, creditors, suppliers
etc. company will be able to identify all those risk factors that can affect organisation's
operations and functions. However, they also assists in knowing responses of customers in
market related to several products and services that are offered to them by company.
2.4) Organisation's new strategy.
A new strategy that Volkswagen is willing to adapt is named as “Volkswagen 2025”. it is
very effective and innovative approach as because this is helping the firm in maintaining itself in
market so that lost brand image due to emission scandal can be re- attain. It is very beneficial for
it as to sustain in market as because this will assist in growing effectively without any problems.
Its main target is to enhance its products and services in market so that more customers could be
attracted towards it. Also this approach is implemented by it as to build customers trust that has
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gone comparing to past experiences. It want to see itself in a peak in future and wish to serve its
clients in an appropriate manner (Teece, 2010).
Customer's satisfaction has become its priority now as because of engineers by whom
such big scandal took place and many problems were to faced by company in greed of position
and hiked salaries entire business got shook. So now they are focusing on customers and willing
to fulfil their need and wants. New business strategy is also concerned about high and improved
productivity, efficiency and profitability in products and services that are availed by it to its
clients. An innovative idea of E-mobility will also be planned to introduced by it and also a 30
powered battery vehicle will be launched by it so as to considered environmental safety aspects
as well. Company's plan is to attain 20-25% can be the total sale that can be attained by 2-3
million units of production.
TASK3
3.1) Alternative strategies.
There are three distinctive circumstance which an organization need to confront, for that
association need to make powerful procedure. There are some of the systems which are needed
to be performed,they are as follows-
 Making entry strategy.
 Substantive growth Retrenchment
Market entry strategy
On the off chance that any business visionary need to take new section in showcase, so he
need to make new technique for his organization. There is some hazard which business person
should take, this can be lessened by dissecting business sector and making system as needs be
(Verbeke, 2013). For making section in advertise there are four techniques these are natural
development, merger, procurement, authorizing, diversifying and vital partnership. VWAG
ought to converge with other organization or they can procure any little or misfortune making
association. New market section procedure will be set up as per showcase examination, this will
help in surviving and getting development in advertise.
Substantive development strategy
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In this technique, an association has been built up however to make viable development,
they need to make substantive methodology. This will bolster in overseeing execution viably.
For substantive there are some methodology these are connected expansion, disconnected
enhancement, flat incorporation or vertical mix. VWAG will utilize Related expansion for their
product offering and vertical reconciliation or they can utilize showcase advancement and item
improvement. These will help with getting development in product offering. This will help in
building up an association.
Retrenchment
In this organization will cut all additional costs which are not basic. Fundamentally it is a
circumstance where organization picture get affected (Verreynne and Meyer, 2010). For this
VWAG can utilize turnaround methodology, liquidation and divestment. This technique is
utilized for reimburse the advance sum, credit sum and misfortune sum in showcase. They
should utilize liquidation for future advantages.
3.2)Justification for chosen strategy.
Volkswagen organization is in a phase where it has been confronting issues because of
emanation embarrassment so it is exceptionally vital for it to execute new methodology so it can
get an appropriate help to manage and to contend with its rivals (Woodcock, Green and Starkey,
2011). Chosen methodology is viable as on the grounds that-
 Feasible- New system is extremely plausible to suggest as it will lead in developing and
to improve in showcase.
 Satisfactory- As it is plausible thus, it can be acknowledged by all. Consumer loyalty's is
should and design fundamentally clients arranged then definitely they will likewise
recognize this.
 Maintainable- As adequacy is available hence association will have the capacity to get
managed in advertise and can steadily contend with others.
TASK4
4.1) Roles and responsibilities of different people in strategy implementation
Several roles and responsibilities that are lies upon different people at different levels in a
company they are as follows-
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 Top management- The most critical part that should be finished by this office is to make
an outline which is having a detail of techniques that Volkswagen will execute in
showcase It is having a portrayal of all organizing and controlling acts that must be done
by a firm. Duty of imparting these to others lies with this office (Astrachan, 2010).
 Middle level-These are individuals who go about as a centre individual of top and lower
level of an association. They have duty to pass on data to bring down level that top level
administration has wanted to be get accomplished. Target and guidelines are get set by
them with the goal that they can have the capacity to make their subordinate do errands
and work
 Representatives/specialists- Main and critical part that lies of workers are to perform
undertakings that has been guided by top and centre level administration of a firm. They
need to execute each one of those assignments that are dispensed by their bosses as what
they perform will reflect genuine execution of association.
4.2) Different resource requirement for implementing strategy
While implementing a new business strategy it is required for Volkswagen to identify
various resources. It helps managers to perform all tasks and activities in the best possible
manner. As the company is following market entry strategy and substantive growth strategy; it
this perspective Volkswagen has to ensure about such resources for effictive regulation of its
new business strategy.
 Human resources - Employees are the most significant part of the company, they are
liable to perform all tasks and activities in an effective manner. As Volkswagen need to
execute fitting methodology, it is extremely important for it to consider about labour.
They are indispensable component of an organization as they do all designs in real
exhibitions (Bharadwaj and et.al, 2013). As to execute procedure all around qualified and
knowledgable stuff is required by it to play out all work legitimately. Time resources - Time is one of the greatest component that must be viewed as most as
on the grounds that each perspective must be performed on revise time unless later it will
happen to no utilization. As organization is intending to present 30 control battery vehicle
it is exceptionally essential for it to have crude materials that will be driving it to work
properly.
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 Physical resources – Assets and machinery are the major physical resources which are
required in implementation of a business strategy. For example- if Volkswagen has
effective tools and machinery then it would make easier the process of completion of
working activities.
 Financial resources - Fund is additionally a basic perspective as on the grounds that
without it no action should be possible along these lines, accessibility of monetary assets
are exceptionally should. It is essential for company to have enough amount of finance so
as to perform all tasks effectively. Bank loans, creditors, venture capitalists etc. are the
major source of finance.
4.3) Evaluating SMART target's commitment.
1. Specific(s)- This objective of an association is particularly certain to comprehend as it is
characterized in legitimate and straight way. This is additionally extremely
accommodating in conveying in fitting way among firm and every one of those
individuals who are associated with it. Firm is focusing on all non purchasers and
unsatisfied individuals of market.
2. Measurable(m)- These are focuses through which refereed to firm will have the capacity
to gauge every one of those set guidelines and objectives (Burlton, 2010). This
progression will occur as execution of points is performed
3. Attainable(a)- Aims and objectives can be acquired just when guidelines will get met.
Clients whom were focused on will buy then just organization will ready to accomplish
its objectives.
4. Relevant(r)- Targets if are fanciful then it turn out to be extremely troublesome and it will
be beside inconceivable for firm to accomplish them as it can not have the capacity to
perform in genuine time.
5. Time(t)- It is imperative as to plan whole arrangement, time is extremely fundamental
that must be met while completing operations identified with new techniques (Campbell,
Edgar and Stonehouse, 2011).
CONCLUSION
The above report has concluded importance of strategy at present time, it is very essential
to carry out proper strategic plan so as to attain organisational set goals and objectives. It has also
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been studied that Volkswagen want to establish in market with more effective manner so that lost
brand image can be retained back and trust can be built again. Factors that are affecting in
making business strategies are described in a detailed manner.
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