Business Strategy Report: Strategic Analysis of Volkswagen Group (HND)

This report provides a comprehensive analysis of the Volkswagen Group's business strategy. It begins with an introduction to strategic planning, discussing the roles of mission, vision, objectives, goals, and core competencies in strategic plan formation, along with the factors considered during strategy formulation and the effectiveness of various strategic planning techniques. The report then delves into an organizational and environmental audit of the Volkswagen Group, including a SWOT analysis and a PESTLE analysis. It also examines the importance of stakeholder analysis and proposes a new strategy for the company, considering market penetration, product development, market development and diversification strategies. The report concludes by discussing the roles and responsibilities of personnel in strategy implementation, the resources needed, and SMART targets for the company. This analysis is framed within the context of the VW emission scandal and its impact on the company. The report utilizes various business strategy models to assess the company's position and make recommendations.

BUSINESS STRATEGY

Table of Contents
BUSINESS STRATEGY.................................................................................................................1
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Role of business mission, vision, objectives, goals and core competencies in formation of
strategic plans.........................................................................................................................1
1.2 Factors has considered for strategies formulation............................................................1
1.3 Assess the effectiveness of techniques used when developing strategic plans................1
TASK2............................................................................................................................................1
2.1 Organizational audit of Volkswagen group......................................................................1
2.2Environmental audit of Volkswagen group.......................................................................3
2.3 Importance of stakeholder analysis:.................................................................................4
2.4 New strategy for Volkswagen group................................................................................4
TASK 3............................................................................................................................................5
3.1 Appropriateness of alternate strategies.............................................................................5
3.2 Selection and justification of strategy..............................................................................6
TASK 4............................................................................................................................................7
4. 1Roles and responsibilities of personnel who are charged for strategy implementation.. .7
4.2 Resources needed for implementing new strategy...........................................................8
4.3 Explain smart target of VWAG........................................................................................8
Conclusion:......................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Today, It is necessary for every business organisation to formulate strategic planning.
With the help of strategic formulation, company has set their goals and objectives in order to
achieve their vision and mission. It is duty of management to prepare business strategy plans that
helps for develop and improve organisation performance. Company made better strategies that
help for achieving success in near future. This report will discuss about the internal and external
factors that adverse affect business operation. It is very important to analyse all business
strategics that help to identify performance of organisation. Volkswagen group is fastest
automotive group all over world. It generate various innovative cars and motor vehicles all over
country. This report will discuss the VW Emission scandal that adverse affect the Volkswagen
group profitability and goodwill. This company situated more than 150 countries. Vision,
mission, objectives and core competencies of company are also mentioned in this report. Various
business strategies helps to protect company from financial crises. Organisational audit and their
environment audit are also described in this report. This project also described SMART targets
relate to organisation working.
TASK 1
1.1 Role of business mission, vision, objectives, goals and core competencies in formation of
strategic plans.
Covered in ppt.
1.2 Factors has considered for strategies formulation.
Covered in ppt
1.3 Assess the effectiveness of techniques used when developing strategic plans.
Covered in ppt
TASK2
2.1 Organizational audit of Volkswagen group.
Cited company is one of largest manufacturing automotive parts in country. They
produce various innovative cars and motor vehicles. They made goal and objectives that help for
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fulfilling their mission and vision statement. They plan and prepare some targets every year for
maintain their goodwill and growth in long run. SWOT analysis helpful for assess organisation
performance. These are as follows:
Strength:
 Cited company brand has very much popular as compared to other rival brands of similar
industry.
 They are largest manufacture of automotive components so large number of customer are
buy this brand only because they provide loyalty and honesty for their target customers.
 They also conduct various research measures that help for company to produce various
innovative component or parts for fulfilling the needs and want of customers.
 This company has largely share their market value in China because this region is fastest
growing sector in term of automotive components.
Weaknesses:
 They are not capable to expand their production in all over country.
 This company has sometime produce those products that pollute environment. Today
mostly people are not purchase those products that pollute environment , they are aware
about this factor. This cited company produce some brans that absorb more fuel or diesel
which release various type of emission gases.
Opportunities:
 Cited company has able to expand their production in all over world. Government also
play essential role for develop and improve this automotive sector. They invest some
money for purpose of economy development, this methods helps company earn
profitability and growth in long run.
 The largest beneficial part of this company has their strong research department. Through
this method, company produce innovative products or components like electric vehicles.
This help for gain competitive advantage over other rival companies (Reinhardt and
Stavins, 2010).
Threats:
 This company has spend more capital in innovative products. But inflationary condition
has largely impacts their profitability and decision in long term.
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 More rivals are also do this similar work and provide reasonable prices so large number
of customer are attracted to this firm.
 Their challengers also make various strategic plans that effects the working or
profitability in this cited company (Rossand Blumenstein 2013).
2.2Environmental audit of Volkswagen group.
Company made decisions on the basis of analyse various external environment factors.
Cited company has uses PESTLE analysis component for assess their environment.
Political factor: this factor largely impact working of company. Government of different
countries imposed rules and regulation so business has work according to this policies. Due to
instability of politics company has not invested much amount in particular country. Their
decision has changing from time to time. But China has give this taxation benefits for this cited
company because they develop and improve their infrastructure facilities.
 Economical factor: This factor greatly affect the economic condition of country. Person
purchasing power are much depend on their income level. But nowadays persons are
largely interested to pay more prices for get valuable service component. European
country economic condition are not better.
 Social factor: Cited organisation provide various employment opportunities to large
number of persons. They establishes various department like steel and glass. Company
also consider various culture, religion, caste, colour factors. In UK, unemployment and
poverty are major problems.
 Technological factor: This factor is very important for profitability and growth of
organisation. Cited company invest amount for invent various components and parts that
helps for fulfilling customer need and wants.
 Legal factor: There are various legal and legislation factors that affect company rules and
regulations. Cite company have to dealing with various legislation in term of labour law,
equity law, taxation and provision. Regulatory body has restricted some policies and rules
according to which company has manufacture products and services.
 Environmental factor: Cited company has produce various motor vehicles and cars that
release harmful gases that affect environment of country. Various disease occur in human
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health. So company has considered those vehicles or components that does not spread
emission gases.
2.3 Importance of stakeholder analysis:
Stakeholders play important role in company profitability and growth. They largely
participate in company activities and operations for achieving goals and objectives. Employees,
government, customers and other investors comes in definition of stakeholder (Firnkorn and
Müller 2012). They represent positive and negatives attitude or behaviour in term of company
product or services. These consist three parts which are described below:
 High power, high interest: Stakeholder lay crucial role in organisation activities and
operations. They have right to take part in decision making process and made planning
for achieve future goals and objectives. Every business enterprise has firstly heard the
problems of these stakeholders because they are key players of organisation.
 High power, low interest; Stakeholder not take seriously play role in all business
operation. They do not show any interest to working in activities of business. It Is
necessary for every business enterprise to conduct annual general meeting once in year so
if any confusion arise relate operation activities, this can resolve in this meeting.
 Low power, low interest: In this section, stakeholder re not responsible for any
performance of company, they does not take any part for resolving conflicts or
misunderstanding. Top Seniors has right to take part in decision making process, these
stakeholder are not interfere with that activity.
Stakeholder made some goal and objectives relate to company profitability. They also improve
and develop the relationship between managers and subordinates, this largely helps for achieve
growth and goodwill in near future. It is important for every business enterprise to search their
stakeholders that helps for assess the success and reputation.
2.4 New strategy for Volkswagen group.
Volkswagen group has faces various crises in term of financial instability and emission
gases. Company has take less part in investing their money for purpose of expansion in different
part of country. There are various strategies available in large segment of market that helps for
organisation to increase their market share. These are as follows:
Market penetration: In this segment, it include high market share in existing segment of
market. This strategy attracts more of customers and fulfilling need and want of customer. With
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help of this strategy, company sell their products to target customers. Cited company largely
adopted this factor for achieving growth and success in near future (London and Hart2010).
Product development: Through this strategy, company largely focus to modify their
existing products and produce new commodities according to taste and preference of customers.
They also generate various innovative products that helps for achieve sustainable advantage over
other competitors. Cited company has mainly focus to alter their products and take part in
innovations , this helps for meet the changing needs and want of customer.
Market development: In this strategy, company has mainly focus to develop and improve
their existing products in the new segment of market. One of strategy that is market segmentation
that helps for company can easily identify their potential customers and clients. In UK, it is
necessary for every company adopt this strategy for meet need and want of customers (Alsoboa
and Aldehayyat 2013).
Diversification: Company has operated in large segment of market so world has show
their interest for purchasing their products. In this segment, company produce new product and
deliver in new market. Company take various risk factors when innovate new product.
Uncertainty exist in every future planning method.
TASK 3
3.1 Appropriateness of alternate strategies.
There are some alternative strategies which this group has adopted for purpose of
expansion of business enterprise:
Market entry strategies:
Organic growth: Company has use this strategy for achieve profitability and success.
They mainly focus to development and improvement of new product and modification of
existing products. Cited company have do activities or operations according to need and want of
customer. This factor help for control and coordinate all business operation.
Merger: Company has combined with other business enterprise for make new company
formation.
Acquisition: Cited company has ability to acquire any enterprise which helps for making
profits and success in long term. So business has save their time and efforts for getting market
shares.
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Strategic alliance: In this alternatives strategy, two or more companies together has
worked to share some assets for achieving targets and objectives. They search their competitor in
large segment of market for the purpose of accomplishing business profitability smoothly.
Substantive growth:
Product development: Company has innovate various cars which are appealing to eyes of
customers. They mainly focus for design components that consume less fuel or diesel and spread
less emission gases. Company concentrate the demand and taste of customers according to this
needs they manufacture their new products.
Vertical integration: According to this concepts, companies made various innovative
products and deliver valuables services to large number of customers. This group want to sell
their components in all over world for achieve profitability and growth in long run.
Horizontal integration: Cited company has optimum utilise their resources in term of
money, time and efforts that help for improving and develop production.
Limited growth:
Market penetration: In this strategy, company achieve limited growth in market segment.
They use various promotional and advertisement tool or promote heir branding in large segment
of market, this will helps for increase their profitability and sales revenue.
Market development: In this strategy, company has largely produce their products to new
customers and existing customer (Ang 2011). They sell their existing commodities in new
segment of market that helps for company going in globalisation level.
Retrenchment:
Turnaround: Wit the help of this strategy, cited company has work for maintain their
finance stability so they sell their business for accomplishing this purpose.
Liquidation: In this strategy, company has take decision for wind up their enterprise, in
this regard they sell their all asset and amalgamated with another company (Aithal 2016).
3.2 Selection and justification of strategy.
Volkswagen group has adopted two kind of strategy, one is market development where
they produce their product for existing customer or new customer while other is for development
of economic condition in various country. This helps for increasing the demand pattern or
income level of population, so they spend their disposal income for purchase this products.
Company has work for improvement of economic condition, this helps for gain large profitability
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and success in near future. They provide various employment opportunities to large number of
people, so this remove poverty alleviation which are marked in country. They establish their new
enterprise in every corner of world, this will improve production capacity of company. They also
establish research and development department that helps for company to easily identify future
need and want of customer. People taste and preferences has changing from time to time.
Stakeholder of this group has also play important role for development and improvement of
company growth (Burlton 2015). They mainly concentrate for those countries which gives high
return in near future. Purchasing power of people of this country are gradually increase so their
buying power also enhanced, this affects the company profitability and success.
TASK 4
4. 1Roles and responsibilities of personnel who are charged for strategy implementation.
Organisation made strategic plans, it does not mean that this earn success and growth in
near future. Cited company mainly concentrate on their profitability if they are not earn properly
then they face various losses and financial crises (Agyapong and Boamah 2013). Workers who
are responsible for made this strategic formulation, they give all information to allotted
department. Manager has take responsibility to maintain their relationship with their subordinates
and other workers. Company has design HR department in their organisation, this section are
responsible to provide all job details to their applicants so newly hire work with full efficiency
and effectiveness. Manager also has right to compare performance wit their employees. The
company has maintain positive relationship between their superiors and subordinates. The
personal has responsible to create new planning policies and modify existing planning factor.
These people take decision for purpose to overcoming weakness and resolve any conflict exist
in organisation. It is necessary for personnel department to maintain every records for future use.
Manger has use monitoring and controlling factor to assess the employee performance. Manager
has clearly communicate to their employees relate to all strategic information.
4.2 Resources needed for implementing new strategy.
Companies want to increase their existing production capacity and produce new products
in new market then it is necessary for business enterprise use optimum resource. There are
various resources which the Volkswagen group has used for formulation and implementation of
new strategy. These are as follows:
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 Financial resource: Cited company has purchase various buildings or plants for the
purpose of achieving growth and profitability in long run. So company require huge
capital for buying this resource for investment purpose. They arrange various recruitment
and selection procedure in their company for appoint most capable employee. Company
pay salaries and wages to their workers, business need financial stability. Company
require funds in various sectors in term of advertise and promote their product, establish
new franchises and research department.
 Human resource: Cited company want to expand their production capacity so they need
various employees for performing the activities of organisation. They provide various
employment opportunities to large number of customers so they work with full capacity
and efficiency. They recruit skilled and knowledgeable persons and use advancement of
technology, this help for company get profitability and growth in long run.
 Time resource: Employees has worked according to set time duration, so they can
achieve work with full capacity and efficiency.
 Material resource: Company need some material equipments that helps for workers for
accomplishing their projects with full efficiency and capacity. Cited company has use
various advancement technology equipment that helps for fulfilling te need and want of
large number of customer.
4.3 Explain smart target of VWAG
The company made objective and goal must be in nature of specific, measurable,
achieving, realistic and time bounded. These elements helps for company to move in right
direction. These can be elaborated below:
Specific: When organisation made goal and objective then they focus some important
factors which helps for achieving it. Company think that what things they want to achieve, how it
can be achieved, what are advantage and disadvantages relate to this thongs, what are possibility
measures for achieving this set goal and objectives. With the help of this specific measure,
company has complete their vision and mission.
Measurable: Company has measured all things that helps for achieving their targets
within given time period. Company has measured their goals and objectives, they think what
exactly company accomplishing it. These targets helps for company go in long run.
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Attainable: Companies always set targets and objectives that area attainable in nature.
Cited company is largest automotive industry world. They can implement various strategies for
maintain goodwill and gain profitability in long run. They improve their past performances.
Realistic: Company has made goals and objectives that are realistic. They work only
those fact projects that they achieved on time. They mainly focus to target majority of share in
large segment for achieving sustainable growth over another competitor.
Time based: It is necessary for company to set time duration in each task or projects. SO
workers completed this factors on the basis of time allotted by company. Cited company has plan
to reach most of the objectives before 2020.
Conclusion:
Form the above mentioned report, it can be concluded that organisation has achieve their
goal and objectives on the basis of vision and mission statement. Tools and techniques helps for
company for making better strategic formulation and implementation. BCG matrix and Ans off
matrix helps to maintain market stability and prepare effective plans and procedures. Enterprise
also evaluate their position with the help of environmental audit. They consider internal and
external factors that exist in organisation and working for improving and developing it. It is
necessary for company to design HR department that helps for recruit better and efficient
employee in organisation. These personnel play various roles and responsibilities which would
help for formulation and implementation of strategic planning. Company also establish research
and development methods for identify needs and wants of different customers. It Is necessary for
company to follow SMART targets so this can achieved profitability and growth in long run. It is
also concluded that company identify their market conditions in large number. These strategies
are very helpful for company for achieving better improvement and development in near future.
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Online
Business strategy. 2017. [Online]. Available through:<http://businesscasestudies.co.uk/business-
theory/strategy/business-strategy.html>. [Accessed on 12 Aug 2017].
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