Strategic Analysis of Volkswagen's Business Operations

This report provides a comprehensive analysis of Volkswagen's business strategy, focusing on organizational and environmental audits, and stakeholder analysis. The report begins with an introduction to the importance of strategic planning and its impact on achieving long-term goals. It then delves into an organizational audit using SWOT analysis to identify Volkswagen's strengths, weaknesses, opportunities, and threats. An environmental audit is conducted using PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors affecting the company. The report also emphasizes the importance of stakeholder analysis in strategy formulation, outlining how to manage different stakeholder groups effectively. Furthermore, it suggests new strategies, including a limited growth strategy with a focus on innovation and joint ventures, to address challenges such as the emission scandal and increasing competition. The report concludes by discussing the appropriateness of alternative strategies and justifying the selected approach, highlighting the roles, responsibilities, and resources needed for successful implementation, and the contribution of SMART objectives. The references cited provide a basis for the analysis and recommendations.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Organisational audit of Volkswagen................................................................................1
2.2 Environmental audit of Volkswagen................................................................................2
2.3 Importance of stakeholders analysis while formulation of strategy.................................5
2.4 New strategies for Volkswagen........................................................................................6
TASK 3............................................................................................................................................6
3.1 Appropriateness of alternative strategies..........................................................................6
3.2 Justification of selected strategy.......................................................................................7
TASK 4............................................................................................................................................8
4.1 Roles and responsibilities of personnel while implementing strategy.............................8
4.2 Resources required for implementing strategy.................................................................9
4.3 Contribution of SMART objectives for the achievement of strategy implementation. .10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategies are an important plan of a particular organisation that helps in achieving the
long term goals of an organisation. In order to get success in the market, it is very necessary that
company should design strategy which will contain all market related information or various
actions that will be followed by employees for driving the firm towards the way of success
(Bullough, 2012). To design strategy is the most important function of management. While
formulating this, all internal and external factors should be evaluated so that effective or
successful planning can be done. In simple terms, it can be said that it is a way by which staff
can know about vision and mission of company that aids them in carrying out business activities
effectively and successfully because they know about the way by which task can be completed.
This assignment is based on Volkswagen which is the leading auto mobile company in UK and
provides better quality of products or services to their clients. This project will state that how
business mission, visions, objectives helps in formulating strategic plans and what factors that
affects it. In this report, organisational and environmental audit will also be carried out for
knowing about company's capability and efficiency.
TASK 1
Covered in PPT
TASK 2
2.1 Organisational audit of Volkswagen
Organisation audit plays an important role in today competitive environment that assists
in delivering better quality of products or services to their clients as well as provide support in
identifying needs or wants of customers (Canavan, Sharkey Scott and Mangematin, 2013). It is
also helpful in improving business operation by which firm will be able to reach to its decided
destination within stipulated period of time. In this, Volkswagen identifies their capability and
efficiency so that it can serve to their user as per their requirement and can achieve its desired
result. It can be identified by using of SWOT analysis which are described below-
Strengths-
 Vide Variety – Volkswagen is known for the rage of designs which provides greater
satisfaction to the customers.
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 Global presence - It is present throughout the world which raises its total customers and
hence brand name in the market.
 Great number of employees - It has large number of employees which helps in delivering
better quality of services to their customers.
 Effective marketing - It has strong promotional tools like prints media, TVCs, online ads
etc. it helps the management in reaching to more market.
 Strong customer relation - It has also large customers base which raises the value of
brand.
Weaknesses-
 Excess of competition - Throughout the globe, there are more race that means it has
limited market share growth. Each automobile organisation wishes to capture greater
market which further raise the pressure on the referred enterprise to work with higher
efficiency.
 Existence of past failure - Some controversial news like emission of cars has influenced
its global brand image.
Opportunities-
 Extend connection - Has established better relationship with non-German auto mobile
industry.
 Innovation - It can enter into new market by providing innovative and attractive cars to
its users.
 Increase in purchasing power - Purchasing power of people are continuously increasing
due to development in the economic condition.
 For facing competition, it can introduce new or innovative goods or services to their
target market (Carney and et. al., 2011).
Threats-
 Competitors are attracting people towards it by providing innovative products.
 Fuel prices are enhancing continuously which leads to decrement in demand of its
products.
 Government has made various regulations for protecting the rights of local auto mobile
industry.
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2.2 Environmental audit of Volkswagen
While formulating any plan, it is very necessary that management should evaluate to all
external factors which affect its process. It can be measured with the help of environmental audit
which can be done by using of PESTLE analysis that are given below- Political factors- Volkswagen is operating their business at global level that's why it has
to face various political issues. While carrying out their activities, it has to follow all
rules and regulations of every country so that it can run their business smoothly and
effectively (Fernandes, 2011). So it is recommended that if it wants to enter into new
nation then firstly it should analyse impact of political elements. Economic- It consists of various elements like interest rates, inflation or deflation
situation etc. so it should be considered while expanding their business. For example- if
interest rate on loan is high then company will not be able to expand their business easily. Social factors- Lifestyle, taste and preferences of consumers are included in this element
that should be identified before designing any kind of merchandise. These components
influence buying behaviour of consumers and sales or revenue of company. So firm
should design their products as per requirement of users. Technological factor- It is one of the most influential factor that should be consider by
Volkswagen while delivering goods or services to their clients. In order to get large
market, share and attention of people, it should use latest technology so that needs or
wants of consumers can be satisfied and they will remain in the company for long period
of time. If it will adopt latest equipment’s then it will reduce the cost of production which
will increase its profit. Legal- Every country has different rules and regulation as per their environment so
Volkswagen should keep in mind that legislation while formulating their strategy so that
it can carry out their operation effectively and smoothly (Frąckiewicz, 2012).
 Environmental factors- Every organisation has responsibility to adopt that production
process which will not harm to the environment of society. If Volkswagen will not take
care of it then it will not be able to reach to its decided destination.
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(Source: Rob, 2016)
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Figure 1: Brexit and freelancers – what’s the impact?

2.3 Importance of stakeholder’s analysis while formulation of strategy
Stakeholders can be defined as a group of people whose activities affect business
operation in direct or indirect way (Harris and Rae, 2011). They play an important role in the
formulation of strategy so while making a plan, it is very necessary that Volkswagen should take
suggestion from them so that it can reach to its decided destination within stipulated period of
time. It can conduct analysis with the help of matrix that are given below-
Keep satisfied
(More power and interest)
It includes employees of the company whose
activities influence business operation
positively or negatively. In order to get
success, it is very necessary that all relevant
information should be provided to them so that
they can perform accordingly.
Manage closely
(More power and less interested)
In this, government and suppliers are including
whose have more power but keep less interest
in business operation.
Monitor
(Minimum power and high interest)
Customers and investors comes under this who
keep high interest in business activities but
have minimum power. They should have all
important information so that they can
contribute in the success of company.
Keep informed
(Less power and interest)
It involves local community which takes
corrective action for protecting the rights of
consumers. Company should provide limited
information to them but not on continuous
basis.
This analysis provides various types of benefits to the firm. Some of them are given
below-
 With the help of this, employees can be motivated by which they will perform their job
effectively and efficiently (Isoherranen and Kess, 2011).
 By this analysis, strategy can be implemented effectively and successfully.
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2.4 New strategies for Volkswagen
In order to get success in the market, it is very necessary that Volkswagen should
formulate new strategy as per market situation so that it can get its desired result or outcome
within decided period of time. With the help of this planning, all available resources can be
utilized effectively and efficiently which will generate positive result for the firm. While
formulating new strategy, management should evaluate all internal and external factors with the
help of SWOT and PESTLE analysis so that business document can be made effectively and
efficiently (Leonidou and et. al., 2015).
After analysing position of Volkswagen company, it is recommended that it should
design new strategy for obtaining its desired result or outcome within stipulated period of time as
well as for maintaining or increasing its own efficiency so that it can gain competitive
advantages over its rivals.
Selected organsiation has responsibility to pay compensation (approx 19 billion pound) to
US government because of emission of cars and not complying with regulations. For this, it has
to make strategy which will help in reducing cost from current activities.
According to the given scenario, it can be recommended that Volkswagen should adopt
limited growth strategy which will help in utilizing available resources in an optimum manner
that will enhance the capability of firm. In decided strategy, joint venture comes under this which
aids in capturing large market share. This tactic has various benefits like helps in entering into
new market by having less number of resources.
With the support of this, chosen organisation can maximize efficiency of its diesel car's
engine by reducing their pollution level. Overall it can be said that limited growth strategy will
be best as per market position of Volkswagen firm.
TASK 3
3.1 Appropriateness of alternative strategies
In order to enhance their capability and efficiency, Volkswagen should adopt various
tools and techniques so that it can reach to its decided destination within stipulated period of time
(Ozaki, 2011). After analysing its current position, it must adopt that strategy by which it will be
able to manage its resources effectively and accurately so that it can attain its desired result or
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outcome. In today competitive environment, there are various types of strategies which can be
adopted by Volkswagen for getting specified outcome that are described below- Substantive growth strategy- Under this tactic, organisation can merge with other firm
either horizontally or vertically by which it will be able to serve to their large customer
base as per their requirements. If company wants to expand their business activities by
entering into new area, then it can also acquire other firms so that its resources or
capability can be increased which will enhance its profitability. Volkswagen wants to
expand its business activities by introducing the concept of electronic cars. Limited growth strategy- This tactic includes variousy types of stratgey like market
development, penetration, innovation, joint venture etc. Which can be used by
Volkswagen for getting specified result or outcome. From given case study, it is
suggested that cited organsiation should use innovation and joint venture strategy for
introducing electronic car in the market. In join venture, two companies work together for
achieving same desired result or outcome.
 Retrenchment- It is very effective and successful strategy in which management
evaluates the profitability of all products (Schawel and Billing, 2011). As per this
strategy, organisation should withdrawal that goods or services from the market which is
not generating specified result or outcome. This tactic has main advantage that it saves
time and money of the company because unprofitable products will not be produced
again which will reduce its cost.
3.2 Justification of selected strategy
After analysing given case study, it is concluded that at present, Volkswagen is facing
various types of issues that are generating hurdles in business operation and are creating
disturbance in generating desired result or outcome. So for protecting from this problems, it is
very necessary that cited organisation should adopt effective strategy that means limited growth
tactic so that it can reach to its decided destination within specified period of time. In given case
study, it is said that firm is going to introduce electronic cars then for making better, it should use
better quality of engine so that everyone will ready to purchase it. For this, it is going to do join
venture with China companies. It will help in capturing large market share along with brand
image in the market.
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In United Kingdom, there are lots of issues related to environment like high level of
pollution etc. (Scholes, 2015). For this, government is taking corrective action by making rules
and regulations which have to followed by company in every situation otherwise it will be liable
for penalty. If organisation is going to introduce environmental friendly car to the people then
firstly it has to go near some governmental agencies which will test it and will evaluate that how
it is eco-friendly car.
In order to get success in the market, Volkswagen should follow all rules and regulations
of government so that it can carry out its operation without any disturbing element. With the help
of this, it can capture large market share as well as will be able to satisfy their needs or wants
effectively and efficiently (Shaw, 2012). If firm will use effective procedure while designing
new products then it will help in increasing efficiency of the company.
TASK 4
4.1 Roles and responsibilities of personnel while implementing strategy
Strategy which is an important aspect in today competitive world by which firm can
achieve to competitive advantages over its rivals. If company is going to adopt new methods or
techniques for completing various tasks of business, then it will be known as implementation of
strategy which is very important for achieving desired result or outcome. While formulating this,
there are various people who have to put lots of efforts for getting success (Taylor, 2012). If they
will not provide support, then it will not generate desired result or outcome. There are various
personnel who have to fulfil various roles and responsibilities for implementing strategy
successfully that are described below- Managers- While implementing strategy, manager has to play an important role because
he is only one who makes written plan and takes all necessary efforts for successful
implementation. He arranges all required or necessary resources so that formulation can
be done effectively and smoothly. After designing strategy, he identifies required skills or
efficiency that should have been in every worker for getting desired result as well as
conducts training programme for everyone so that desired result can be obtained within
stipulated period of time. Apart from this, he has to fulfil other obligation like to motivate
employees by giving them incentives etc. so that they will perform their job as epr
specified standards (Welch and et. al., 2011).
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 Employees- It is the most important element which plays an important role in the
implementation of strategy. They are those people by which company can achieve
competitive advantageous over its rivals because they help in designing products or
services as per requirements of clients so that their needs or wants can be satisfied and
they will remain in the company for long period of time. While formulating new strategy,
they have main responsibility to know about changes and will provide support in this sop
that firm can achieve its desired result or outcome (Werner and Xu, 2012).
 Engineers- These persons are those which provides technical information to the
management so that strategy can be implemented effectively and successfully. They also
help in designing unique or attractive kind of products by which company can get
attention of large number of people.
 Senior authorities- In order to get effective and successfull strategy, these authorities
provides necesasry suggestion to the manager so that they can design it accordingly and
can reach to its decided destiantion within stipulated period of time.
4.2 Resources required for implementing strategy
For implementing effective and successful strategy, it is very necessary that Volkswagen
should have all resources so that process can be carried out easily and smoothly (Yin, 2016). For
achieving same, there should be proper amount of material so that chosen organisation can
obtain its desired result or outcome. Some of them requirements are described below- Financial resources- It is very vital required resources that are needed at every step of
implementation. Without having this, Volkswagen cannot reach to its decided destination
as well as cannot formulate effective and successful strategy. It can raise funds from
various sources like banks and other financial institute. Fixed resources- While implementing strategy, there is also required some fixed
resources like machinery and other equipment’s by which company completes their
projects. Parts of cars- Volkswagen is going to introduce new car for which there will be
requirement of some part by which complete vice can be made. For this, it will contract
with suppliers who will provide these parts at reasonable price (Business Strategy, 2017).
 People- Every task can be completed with the help of them if they will not be present at
workplace then strategy cannot be implemented effectively and efficiently. In order to get
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success in the market, management should hire skilled and capable manpower so that
they can perform their job effectively and efficiently as well as can carry out strategy
successfully. Without having them, Volkswagen cannot reach to its decided destination
within specified period of time. So it is recommended that company should hire best
qualified employees who can drive the company towards the way of success.
4.3 Contribution of SMART objectives for the achievement of strategy implementation
Strategy includes set of activities by which enterprise can achieve competitive advantages
over its rivals as well as can reach to its end decided result. In order to get success in the market,
Volkswagen should make effective plan by using SMART [specific, measurable, achievable,
realistic and time bound] targets which will help in enhancing efficiency of the firm. For
achieving same, top management will be liable which are given below-
 Specific- If company is going to implement new strategy then its objective should be
specific and flexible so that everyone can perform accordingly. And every employee
should be cleared about their roles and responsibilities so that there will be no confusion
and they can perform effectively. The referred organisation can establish a specific goal
so that a common culture can be developed which further help in accomplishing the
desired task.
 Measurable- Decided objectives should be measurable so that firm can know about the
profitability ratio. Volkswagen wants to increases their sales by 40% in 5 months.
 Acceptable- If company is setting any target then it should be accepting by every member
so that they will provide support in achieving same.
 Relevant- It includes all short term and long term objectives of the company by which
efficiency or effectiveness of firm increases (Business Strategy, 2017). For example-
increment in sales by 40% in upcoming 5 months is directly link with its financial
performance of business.
 Time bound- Every organisation should set the time period of each and every activity so
that objectives can be obtained effectively and within stipulated period of time.
So from above discussion, it can be said that while implementing effective and successful
strategy, company should set SMART objectives so that its efficiency can be increased and it can
gain competitive advantages over its rivals.
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CONCLUSION
From the above report, it can be said that company should make effective strategy
because it the way by which competitive advantages can be achieved. While implementing this
strategy, firm should evaluate its capability and external environment by using SWOT and
PESTLE analysis so that it can design successful planning. This project has also explained
various alternative strategies like limited growth, substantive strategy by which it can capture
large market share as well can get desired result. In order to increase its efficiency, firm should
use SMART concept by which it can reach to its decided destination within stipulated period of
time.
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