Volkswagen Business Strategy Report Analysis and Evaluation

This report provides a comprehensive analysis of business strategy, using Volkswagen as a case study. It begins with an introduction to strategic planning, including mission, vision, goals, and objectives. The report then delves into factors influencing strategic planning, such as Ansoff's Matrix, and evaluates the effectiveness of techniques like the BCG growth matrix. A significant portion of the report focuses on Volkswagen, including an organizational and environmental audit, strategic positioning, and stakeholder analysis. The report examines Volkswagen's strengths, weaknesses, opportunities, and threats (SWOT), and analyzes the impact of the emission scandal. Finally, the report proposes new strategies for the organization, evaluating market entry strategies and outlining the roles, responsibilities, and resources needed for implementation. The conclusion summarizes the key findings and recommendations for Volkswagen's future strategic direction.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Business vision, mission, goals and objectives to inform strategic planning...................1
1.2 Important factors recognised in order to formulate strategic business plan.....................2
1.3 Effectiveness of techniques in development of strategic business plan...........................4
TASK 2............................................................................................................................................5
2.1 Strategic positioning and organizational audit of Volkswagen........................................5
2.2 Environmental audit for Volkswagen...............................................................................7
2.3 importance of stakeholder analysis in formulation of strategic business plan.................9
2.4 New strategy for the organization..................................................................................10
TASK 3..........................................................................................................................................10
3.1 Effectiveness of alternative strategies relating to market entry......................................10
3.2 Justification for selection of appropriate business strategy............................................11
TASK 4..........................................................................................................................................11
4.1 Roles and responsibilities of personnel charged for strategy implementation. .............11
4.2 Estimation of sources required to meet the strategy.......................................................12
4.3 Evaluation of SMART targets for the achievement of strategy implementation...........12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
System of every business enterprise aims at expansion of business operations in order to
maximise the sales and profits by satisfying the needs of customers. Business strategy is
considered as important plans and policies that helps in regulation of business and operations in
market that supports in sustaining its current market position as compared to the competitors.
These strategies work as tonic for organisation as its helps in formulation, implementation,
calculating, and designing business activities according to the environment factors (Scholes,
2015). This report will analyse the business strategies which are designed and implemented in
order to get the financial supports from the Dragon den group companies. Various business
mission, vision, objectives, goals and core competencies of new business concept have been
discussed. Further, case study of Volkswagen is taken into consideration in order to analyse the
company’s policies and procedures. Various consequences have been analysed which are faced
by organisation in its past business operations due implementation of wrong actions. In addition,
various important models have been used to analyse internal and external environment situation
of Volkswagen. Moreover, several important and SMART standards of company have also been
discussed which provides the direction to organisation in application of successful business
strategies.
TASK 1
1.1 Business vision, mission, goals and objectives to inform strategic planning
Business strategy is long termed action plan that is designed to accomplish a particular
goal or set goals or objectives (Teece, 2010). Strategy is considered as the management's game
plan that is used for strengthening the performance of enterprise. In present context, there are
some important elements of business that have been discussed in order to pitch for finance in
front of Dragon den group.
 Mission: This statement of organisation determines the things and action plans which
they will apply in order to achieve the vision in near future. The mission statement of the
company is to provide the top quality of products at the lowest possible prices and
gaining satisfaction of customers in international market.

 Vision: This statement of company will describe the reason behind its existence in
market. Further, the new business regulates with the vision: “To be most successful and
widely recognised brand in auto mobile sector by providing unique design and fuel-
efficient cars to customers in order to achieve their satisfaction”. It will help the
enterprise to develop effective strategic business plans to achieve success in business
operations.
 Goals and objectives: Goals are considered as the purpose towards which the project of
company has been directed and objectives are efforts or action of enterprise intended to
attain accomplish ; purpose and target. New business objectives are as follows:
◦ Maximising profits at increasing rate.
◦ Gaining rise in sale up to 10% in every 6 months (Astrachan, 2010).
◦ Hiring qualified employees at workplace.
◦ Expansion of business in Asian countries.
◦ Increasing the market share up to 5 % in auto mobile industry in every quarter.
◦ Increasing the brand recognition among the customers in European market.
 Core competencies: These are abilities of company to develop and implement business
strategies that provide positive results. If the organisation has competencies, then it will
be able to survive in the present competitive market. It can be measured in monetary and
non-monetary terms. In present context, innovation and unique design of cars is major
competency of our business which provides support in accomplishment of these goals
and objectives.
Thus, these major components will help in influencing the Dragon den group companies
and attaining resources to establish new business in auto-mobile industry.
1.2 Important factors recognised in order to formulate strategic business plan.
Strategic planning is process of organization in order to define its strategy or ways and
making effective decisions on allocation of its resources to implement the strategy. It may also
helps the organization to extend the control mechanisms for guiding the strategic application of
business plan (Woodcock, Green and Starkey, 2011). Further, For development of effective
business strategy, the organisation needs to make an effective research and should analyse the
factors that provide influence, in order to take successful business decisions. In present context,
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Ansoff's matrix have been used to determine the factors that affects the company’s business
strategy in auto mobile sector and its potential customers base.
Ansoff's Matrix
These are also considered as alternative corporate growth strategies that concentrates on firm's
present potential products and new products as well as customers in market.
This matrix has provided four different strategies of growth which are as follows: Market penetration: It is the strategy in which the organisation seeks to achieve the
growth with its existing products in present market and should try to sustain its position
in competitive business environment (Campbell, Edgar, and Stonehouse, 2011). It is
considered as least risky strategy since it leverages many of company’s existing resources
and competencies.
 Market development: In this, strategy of market development is effective for enterprise in
which they will target their existing products and services in new market segments. Auto-
mobile company will also concentrate on this strategy and expands its business in other
Asian countries’ market.
Existing Products New Products
Existing
Markets Market Penetration Product Development
New
Markets Market Development Diversification
 Product development: In this, company will develop its new and unique designed cars by
targeting its existing market segments in European countries. Competencies of company
like innovation and technology will support them in implementation of this strategy.
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 Diversification: It is also a strategy in which the firms tend to grow by diversifying in
new businesses through development of new products for new markets (Cinquini and
Tenucci, 2010). For establishment of business in Asian countries, company needs to
target a specific market segment and should analyse their preference towards purchasing
the cars.
Thus, it can be said that these are important and have to be analysed by organisation in
order to implement the successful business strategy.
1.3 Effectiveness of techniques in development of strategic business plan.
Business planning is considered as necessary for organization in achievement of growth
and success in business operations as they are getting various financial resources in order to
formulate effective business plans. Strategic business plans provide important tools to
organization for tracking the growth, establish a budget, preparation for unforeseen changes in
market (Pagani, 2013). A strategic business plan includes many elements which the organization
can use to attract the financing and managing companies objectives. It is important to optimize
market research and to attain optimum market share for your business. Further, in this report
BCG growth matrix have been used to determine the company's effectiveness in formulation of
techniques in formulation strategic plans.
BCG growth share matrix
It mainly displays the various business units of company on graph of market growth rate
in comparison to market share relative to rivals in auto – mobile sector. Allocation of resources
to the business units of company according to their situation on the grid as follows: Cash cow: A business unit that has a large market share in mature and low growth
industry. This is market situation in which the company has high growth but industry has
not achieved the much growth (Burlton, 2010). Company in this stage requires fewer
investments and generate cash that can be used to invest in other business units.
 Star: Company in this stage posses high market share in fast growing industry like Auto-
mobile industry. In this, the company will be bale to generate cash but due to high marke
continuous market growth, it requires making investments in order to sustain its position
in market.
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 Question mark: In this stage, enterprise will arrive in this stage when it has low market
share in rapidly growing industry (Oltra and Luisa Flor, 2010). Further, company in the
situation requires more resources to grow its market share in auto mobile industry, when
they achieve success, then they will arrive in star category.
 Dog: A business that has a small market share in low growth or matured industry is
considered in the dog stage. In this stage, if company will arrive then will only have the
way to deploy their investments and employ it in other market to achieve profits.
Thus, this matrix will provide an understanding attractiveness of industry and companies
competencies to achieve success by developing and implementing effective business plans.
TASK 2
2.1 Strategic positioning and organizational audit of Volkswagen.
As per the above case scenario, there is major requirement for enterprise to analyse its
internal business environment to order the competencies and opportunities to analyse the
strategic business position of company in UK. Company has faced very important challenges due
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Illustration 1: BCG growth share matrix
(Source: The BCG Growth-Share Matrix, 2017)

to its emission scandal which has wiped its 47% market share and profits (Reinhardt and Stavins,
2010). With the implementation of effective business strategies Volkswagen has achieved
continuous growth business operations by taking innovations as tool to achieve success and
influencing the customers to purchase its newly designed cars like OD, Bentley Porches, Skoda,
SEAT and Volkswagen cars etc. Further, SWOT analysis of company is done to understand its
strengths, opportunities, weaknesses and threats etc.
Strengths
 Strong brand presentation in auto
mobile and recognition between the
people in European countries.
 High market growth
 Well managed operations and
functions.
 Continuous rise in company financial.
 Wide range of new and excellent
design cars (Shirey, 2011).
 Use of new and latest technology in
manufacturing of cars.
 Huge channel of distribution across the
countries.
 Well established and competencies of
making fuel efficient cars.
 Ability to remove the problem of
emission scandal
Weaknesses
 Low market share in Asian countries as
compared to competitors.
 High amount of prices have charged on
cars.
 Decline in trust of customers on brand.
 Decline in profit margin.
 High dependency on European market.
 Lack of efficient marketing practices.
 Rise in competition in industry.
 Only focused on Premium customers.
 Decline in customers base after
emission scandal.
 Weak positioning in Asian countries
like India, china etc.
 Critical crisis situation due to penalties
in Emission Scandal and impact of
political restrictions.
Opportunities
 Expansion in Asian countries through
introduction newly designed cars at
effective or competitive prices.
 Increasing the recognition of brand
Threats
 Major threats of competitors brand as
they are also focusing on developing
new and innovative designed cars and
influencing the customers.
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among customers through appropriate
marketing practices.
 Development of strategies in order to
reduce the competition in market.
 Product diversification and variation in
prices.
 Focusing on the medium class
customers along with premium class so
that they also change their perception
towards the brand.
 Threats of decline of economic
conditions.
 Influence of government regulations
and policies on business.
 Impact of emission scandal on sale of
products and services.
 Impact on fluctuation exchange rates
and taxation policy.
From the above analysis, it can be said that Volkswagen has major strength which they
have achieved ion past several years in business and through this they will be able to overcome
there weaknesses. Further, emission scandal has provided major impact on company's sales and
wiped out its 47% profits and imposed the penalties of $18 billion which is major loss for
company. Further, in order to expand its business position, company needs to develop new
products and needs to target new customers in other countries. It should also need to reduce its
dependency on the European market and also focus on diversified customer base in Asian
countries. It also set up its production and manufacturing units in other countries in order to
provide cars at lowest rate. After emission scandal company is more focused on following rules
and regulation related environmental protection and develops only fuel efficient vehicles.
2.2 Environmental audit for Volkswagen.
The term environmental audit is considered as tool that is used to quantify the
performance and position of Volkswagen in auto mobile industry. There are three main kinds of
audit which are environmental compliance audit, environmental management audit to verify
ability of organisation to meet its stated objectives and functional environmental audit etc
(Wæraas, 2015). In present scenario, Environment management audit is conducted for
Volkswagen in order to analyse its competencies to meet the stated business targets. External
analysis of company through recognition of impact of various factors and needs for enterprise to
analyse these factors in making strategic business plan. PESTLE analysis will provide complete
understanding of the factors which are as follows;
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 Political: As per the case study, political factors have provided major impact on
Volkswagen's financial conditions, decreased its profitability and reduced the trust of
customer in European countries because the management was also involved in that
scandal of installing software the cheat the result of emission test (Wüstemeyer,
Madlener and Bunn, 2015). Further, After that company has adopted the right direction
and changed its engines from diesel to other fuel efficient. It concentrates on following
the rules in order to reduce restrictions of governments of other countries. In UK, present
condition for Volkswagen is positive and does not provide any negative impact on
company.
 Social: It includes the factors like perception, values, income level and trust of people
towards the brand (Yang, 2017). After the emission scandal, this factor has provided
major impact on sales of company as trust of customer was reduced on brand and they are
not willing to 47 % of company's profitability. In order to remove the negative impact
company has its changed its direction and develop new designed and fuel efficient to gain
the trust of customers.
 Economical: It includes economic growth, taxation policy, income level of consumers
and rise in GDP of country etc. Rise in economic growth of UK has provided positive
impact on sales and profitability of Volkswagen By increasing the income level of
people. Further, taxation policy of government will provide negative impact on
company's prices of products and increase the prices.
 Legal: This factor of external environment involves impact of legal policies, rules and
regulations that are formulated by government of country to sustain the rights of
customer and employees which are working in organization (Zalengera and et.al., 2014).
Laws like environmental, employment act and consumer rights etc. Negative impact of
these factors have been removed by enterprise by following all rules and regulations.
 Technological: Continuous technological environment has also provided a positive
impact company's production and increased there capability to design new cars with
unique features to influence its target customers.
 Environmental: This factor includes legislation like pollution, environment consequences
and other rules which has provided negative impact on companies operations (Boyer and
et.al., 2010). In case study, it is clear that companies sales has wiped out because they
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have breached the environmental laws. Further, now they are concentrated on designing
fuel efficient vehicles that exerts less carbon emission. Through this, they will be bale to
reduce the negative impact of these factors.
Thus, it can be said that external factors will provide both positive and negative impact on
companies and needs to be recognised for taking effective business decisions.
2.3 importance of stakeholder analysis in formulation of strategic business plan.
There are some important stake holders of enterprise which are as follows: Employees: These are considered as important people that are responsible for providing
growth to company by putting their efforts to achieve common goals (Johnson, 2017). As
per the analysis, it is essential for Volkswagen to provide recognition to its employees to
take participation in creating a successful business plan and policy. Shareholders: Person who are directly related with company and provide financial
resources by purchasing there equity against the cash in order to achieve the maximum
return. There is major importance for company to analyse its stakeholders in
implementation of strategic plans as they will make investments on the basis
effectiveness of strategies and there capabilities to achieve success in business operations. Government: It is major partly whom the Volkswagen needs to consider in formulation
of business policies as they it influences the operations if they found something incorrect
or against law (Nordqvist and Melin, 2010). Company will provide all information
related to business on its websites and declare its financial report in every 10 years,
provide report of safety to government authorities of UK. Customers: Further, people are always recognised by company while formulating
business plans for new product development. It will conduct research to analyse the
preference of customers in European and Asian countries and manufacture vehicles to
satisfy the requirement of customers.
 Suppliers: Company needs to consider its suppliers as they are major source of enterprise
to gain raw materials at lowest prices and aids in decreasing the price of products and
services, helps in maximising the profits.
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2.4 New strategy for the organization.
Implementation of new strategy is every essential for Volkswagen in order to expand its
business operations in other countries as they are able influence they are getting major
recognition of customers (Reich and Benbasat, 2013). There are some effective policies that
organisation are needed to consider which like Market penetration, product development market
development and diversification. From these strategies, the most effective strategy for
organization is product and market development strategy in which they will focus on
development of new product or making innovation in existing products and influence its target
customers in existing market segment in order to maximize more profits and increase its sales
turnover as compared to previous financial year.
TASK 3
3.1 Effectiveness of alternative strategies relating to market entry.
There are various other strategies which are considered as effective for organization and
should be considered by them which are as follows:
 Market entry strategy: It is also considered as an effective strategy for regulating the
business in the forma of merger, acquisition, strategic alliance, licensing and franchising
etc. Volkswagen can also use these strategies as it requires less amount of capital for
investments and risk for company will also get reduced.
 Substantive growth strategy: Further, this business strategy includes the business
operations of enterprise in order to regulate its business operations and strategies in
market as compared to competitors (Issa-Salwe and et.al., 2010). It includes strategies
like related and unrelated diversification, Horizontal and vertical integration which the
company will select to expand its business operations. It will be effective for enterprise if
they required to exist new market of other country.
 Limited growth strategy: These are strategies which are already been discussed and
used by management of Volkswagen in order to achieve previous market position and
expansion of customer base in present market segments (Pagani, 2013). It includes
strategies like market penetration, product development and market development. These
most suitable for enterprise in order to launch its new products in existing market and
helps in achievement of objectives.
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3.2 Justification for selection of appropriate business strategy.
From the above analysis, it has been justified that the most effective strategy which needs
to be applied by Volkswagen is its business operation is limited growth strategy which will
provide them support in development of new products and in order to expand business operations
(Burlton, 2010). It also helps to overcome new business practices through which they will
expand there brand recognition among the customers in across the customers. Further,
Volkswagen can also join other companies and strategic alliances in India through adopting the
strategy. This strategic will help the organisation to expand further strategies that can help to
increase the revenue. After entering in to new market, Volkswagen can adopt product
development strategy to differentiate its products and services from other rivals>
TASK 4
4.1 Roles and responsibilities of personnel charged for strategy implementation.
For the implementation of strategy, there are is requirements of person that will lead over
the other personnel and able to distribute the work between the employees according to there
role, performance and position in organization (Shirey, 2011). The employees of Volkswagen
who have the power to implement the strategy must have major roles and responsibilities. For the
implementation of effective and appropriate business strategy, the roles and responsibilities of
other employees needs to be defined clearly by managers. Top management or CEO of company
is responsible to interact with other employees and other parties in order to give information
about strategy and also posses responsibility to guide in strategic planning.
In addition to this. Manager who are charged with strategy implementation have the
responsibility to maintain the proper record of customers to inform strategic business planning. It
also helps in avoiding the legal implications on organisation (Wæraas, 2015). To maintain the
ethical as well as legal standards in strategic implementation is also major duty of manager for
strategy implementation. Further, monitoring and making control refers to the periodic review of
activities which are performed by enterprise. It also helps in identification that effective steps are
taken by employees or not. Thus, it can be said that it helps in encouraging the overall
performance of organisation through strategic planning.
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4.2 Estimation of sources required to meet the strategy.
There are three different types of resources have been identified which are required by
organisation for successful implementation of strategy. These important resources are mentioned
above: Financial resources: It refers to the policies that who the Volkswagen should get funds
and money to accomplish the activities included in strategy implementation (Yang,
2017). In present there are two important ways have been available for enterprise like
debt and equity. Equity of enterprise is considered as Human resource: For the implementation of strategy, there is major requirement for
enterprise to hire qualified and competent employees in order to gain there support in
new product development and influencing the new and targets (Reich, and Benbasat,
2013). Competent employees will innovative ideas and manufacture unique and
innovative vehicles for Volkswagen. Time and material requirements: For every strategy there is specific time and materials
are needed to accomplish the project. Volkswagen should use Highly qualified and latest
technology, equipments in order to fulfil adopted strategy of product development.
 Technological resources: It includes the resources like innovative design, computer and
latest technology equipments to design the cars and latest machinery to make the vehicles
of Volkswagen more effective and unique for customers.
4.3 Evaluation of SMART targets for the achievement of strategy implementation.
As per the given scenario, SMART objectives have been referred to targets which are fixed by
the company to gain success in business operations and accomplish of Being a most viable and
known brand in auto mobile sector enterprise by satisfying the customers (Johnson, 2017). The
targets which are fixed by company needs to be Specific, measurable in quantity, attainable in
specific time and must be realistic in nature.
There is major importance of Smart targets which are as follows; Specific: The target of company needs to specific otherwise the all efforts of enterprise
and people will go in vain and cause problems. Target of increasing the market up to 10%
in every quarter is considered as specific for Volkswagen.
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 Measurable: targets also needs to be measurable in terns of quantity otherwise it is not
possible for company to identify any loop holes. Objective of increase the sale Up to 20%
percent in months can be measured in quantity. Attainable: It should be attainable for organisation in specific time limit. Further, it is
specified that the organisation will achieve its vision, mission and strategy in order to
achieve the business strategy at workplace. Realistic: If the target of organisation are imaginative then it will not be possible for
enterprise to attain the imaginary things so the target needs to be realistic (Nordqvist and
Melin, 2010). Target of company for increasing the profitability up 20 % is also realistic
and achieved by organisation through new product development strategy.
 Time bound: These strategies are required to be accomplished in specific time limit.
Therefore, company has specified that it will increase its market share in every 4 months
and raise its sales in every 6 Months and increase its profitability in one year.
CONCLUSION
In present report, it has been concluded that business strategy is considered as important
plans and policies that helps in regulation of business and operations in market that supports in
sustaining its current market position as compared to the competitors. Strategic business plans
provide important tools to organization for tracking the growth, establish a budget, preparation
for unforeseen changes in market. Various business mission, vision, objectives, goals and core
competencies of new business concept have been discussed. Further, case study of Volkswagen
is taken into consideration in order to analyse the company’s policies and procedures. Various
consequences have been analysed which are faced by organisation in its past business operations
due implementation of wrong actions. Further, various important model has provided an
understanding that company has been affected by internal and external environment which it
needs to analyse in order to develop and implement successful business strategy.
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