Business Strategy Report: Volkswagen's Market Entry Strategies

This report provides a comprehensive analysis of Volkswagen's business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of Volkswagen's strategic positioning using SWOT analysis, identifying its strengths, weaknesses, opportunities, and threats. An environmental audit using PESTLE analysis is also conducted to assess political, economic, social, technological, legal, and environmental factors affecting the company. The report then explores the significance of stakeholder analysis using Mendelow's matrix, followed by the application of Ansoff's matrix to formulate new marketing strategies, particularly focusing on product development. The report further discusses alternative market entry strategies, including organic growth, mergers, acquisitions, and strategic alliances, alongside sustainable growth and retrenchment strategies. It also covers the roles and responsibilities of personnel, estimated resource requirements, and the contribution of SMART targets to strategy implementation, concluding with a summary of the findings and references.

BUSINESS STRATEGY

Table of Contents
Introduction......................................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Strategic positioning of Volkswagen by carrying out an audit.............................................1
2.2 Environmental audit for Volkswagen...................................................................................2
2.3 Significance of stakeholder analysis.....................................................................................3
2.4 New strategies for Volkswagen............................................................................................5
TASK 3............................................................................................................................................5
3.1 Alternative strategies relating to market entry and substantive growth................................5
3.2 Justification of the chosen strategy......................................................................................7
TASK 4............................................................................................................................................8
4.1 Roles and responsibilities of personnel................................................................................8
4.2 Estimated resource requirements for implementing a new strategy.....................................8
4.2 Contribution of SMART targets to the achievement of strategy implementation................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

Introduction
A business strategy can be simply defined as the means through which the aim and
objectives of corporates are being achieved. It is also called as long term business planning. It is
the path and range of an enterprise that sustains for a long period of time. It is very important for
a firm as it aids in enhancing the performance. Without this it is seriously very hard task to
compete in the market with different competitors (Scholes, 2015). To make a correct business
strategy is very essential task of an organisation. But there is no guarantee of achieving success
either by making correct or good business strategies and by it execution. The activities of
organisation and its working depends on some macro and micro factors. For this reason,
reassessment of business strategies is very necessary other than it is very common to loose its
strength. The present report is based on the business strategies of BBC. In this project the
mission, visions, objectives, goals and core competencies of business are informed by strategic
planning at the time of making the plan. The effect of internal as well as external factors over the
firm are also discussed here.
TASK 1
Covered in PPT
TASK 2
2.1 Strategic positioning of Volkswagen by carrying out an audit
An organisational audit for Volkswagen can be carried on by using SWOT analysis. This
assists in identifying internal strength and weaknesses of company. Additionally, external
opportunities as well as threats can also be achieved via using this analysis. The SWOT analysis
are done below:
 Strength: One of the strength of corporate is that it is very well organized canopy
brands. Every one know that it manufactures advanced technologist fantastic cars, bus as
well as traveller auto-mobile. There are infinite goods or services provides by firm, but
the artefact is very crease-less and economical where each unit of strategic business are
having the responsibility to maintain their brand and success. It has strong market
existence in Germany where most of people purchase cars of Volkswagen only
(Meskendahl, 2010). But apart from that corporation has 70 production plants and is
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serving to approx 150 nations in all over the world. Volkswagen branding is very strong
in Europe and USA. They recently started their work for making hybrid cars and
motorbikes. It has given top most contribution in making total revenue in the US in
relation to other top most brands.
 Weakness: This is shown by a scandal that affected the brand image of company. This
occurs due to the breaking of trust as they have used a wrong software for measuring the
pollution level and deceived their customers as well as government. Because of this
more than 5 millions cars contract get cancelled and returned to them (Liedtka, 2010).
The rising level of competition lowers the selling rate of company that reduces their turn
over greatly.
 Opportunities: The purchasing power is increasing year to year. Because now several
schemes are launched like loans option, EMI, finance options, etc. That is why company
is gaining the interest of customers. In future, the world-wide enlargement is achievable
as demands are rising day to day.
 Threats: The major threat to Volkswagen is the emission of scandal. This reduces the
trust of customers from them. They are not confident about this brand now so, they do
not prefer these cars.
2.2 Environmental audit for Volkswagen
In order to carry out environmental audit PESTLE analysis is performed. This analysis is
discussed below:
 Political factor: Legalisation or norms made by government affects a lot the corporation
performances. It may affect positively as well as negatively. The demand of hybrid cars
which venture started manufacturing is increasing day to day. Government also supports
this as it is environment friendly and make low level of pollution. Every newly
manufactured cars must obey and stick to EU vehicle emission standards and norms
which is known as Euro standards. The government of UK has presented several financial
measures in order to favour cars that has minimum carbon dioxide discharge. On the
other hand if this rate (carbon dioxide emission) is high than company have to pay high
tax rates (Martin and Rice, 2010).
 Economical factor: The rate of revenue is dependent on the demand of cars. The large
amount of revenue is created when the demands gets high. The cost of auto-mobiles has
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been increasing day by day due to rise in detonation. The main factors that are affecting
the external pricing is due to fuel dependency. The rising in the prices of petrol do not
minimize or lowers the demands of auto-mobile as new cars are consuming less amount
of oil in relation to older one. This offers purchaser to save more amount of revenue.
 Social factor: The social factors like population, living style, etc. affects the working of
Volkswagen. For example if a family has more than ten members then they will choose a
bigger and risk-free car. While if there is a small family then they can prefer for a small
car or even some time motorbike that manages their work (Higgins, Omer and Phillips,
2015).
 Technological factor: The technology is improving year on year. Now car are producing
that can emit less amount of carbon dioxide. Additionally, the speed of the cars are also
increased by providing more less battery loss.
 Environmental factors: The environment are getting badly affected by the emission of
large amount of carbon dioxide. This increases the pollution level.
 Legal factors: Imposition of high rate of taxes by the government impacts negatively the
performance of company as large amount of money goes on in paying these taxes only.
2.3 Significance of stakeholder analysis
Stakeholders can be simply defined as those persons or group that are engaged with
corporation. They get affected or bring affect to the performance of organisation. They includes
employees, customers, creditors, suppliers, government, etc. Stakeholder analysis is method
which is used to recognise the people who are interest in business activities of company and also
supporting this. Mendelow's matrix is used for this purpose. The aim of this matrix is to assess:
 whether the opposing nature of stakeholders is likely to occupy the strategies of
success.
 What type of schemes are used that ease or help in the adoption of the strategies?
There are four quadrants in which strategies are applied:
 Box A- Minimum effort: Such type of stakeholders have no interest and strength that
open them to get impacted. They mostly evaluate or accept the guidelines of others.
 Box B- Keep informed: These types of personalities are most fascinated regarding
strategies but they have no power do any thing or any changes in terms of policies
(Hsieh and Chen, 2011). The management requires to persuade hostile towards the
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strategies so that the plans receive justification. Otherwise they will attempt the benefit
by inter-connecting with those parties that are present in boxes C and D.
 Box C- Keep satisfied: The main motive of managers to keep them satisfy in order to
deflect them by increasing involvement and moving them to region D (Haley, Haley,
and Tan, 2011). This will include the assuring them the outputs of planning in advance.
 Box D- Participation: They are major drivers who can make changes and also have the
capabilities to resist changes if they do not get satisfaction. Management, hence, need
to transfer them all the schemes and also telling them about the enforcement related
issues.
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2.4 New strategies for Volkswagen
Ansoff 's matrix can be used to make a new marketing strategy for Volkswagen. This
matrix gives four alternative marketing strategies which depends on whether the product is new
or old. The four strategies are described below:
 Marketing penetration: This states that company need to increase their market share
within current market section. This can be attained by buying more goods by making
large number of consumers or by searching new users under the existed marketplace.
 Product development: This includes the development of new products and services for
the existent market (Hahn, Kolk and Winn, 2010). Product improvement involves
thinking about how new goods can satisfy the users at more extent and also perform best
in comparison to their competitors.
 Market development: This strategy states that finding new market place for the existed
goods. The survey conduction and further segmenting of market will aids to determine
the new group of consumers.
 Diversification: This includes movement of new products or services into new location
of market at the same time. This is quite risky as the more an enterprise are moving away
from what it has finished in past the more uncertainty are generated. However, if current
tasks are vulnerable, diversification assist in spreading risks.
Moreover, Volkswagen need to create strategies in order to give value and concentrate
more on satisfaction of their users. They can apply new planning that is new product
development. This scheme can modify the performance of corporate by offering fresh products
or services to customers and as a result they get totally satisfied. This will help Volkswagen to
earn large sum of money and creation of further opportunities regarding expansion of their
business.
TASK 3
3.1 Alternative strategies relating to market entry and substantive growth
The appropriateness of alternative strategies relating to market growth, substantive
growth and retrenchment are discussed below:
 Market entry strategy: This can be used as an alternate marketing strategy. This is
explained further:
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▪ Organic growth: When the enterprise conduct improvement over its own
organisation as the similar way it had done at the starting, this is called organic
growth.
▪ Merger: This the process via which two firms merges together and performs as a
single entity.
▪ Acquisition: This occurs when a corporate buy 100 % control over another
enterprise.
▪ Strategic alliance: When two or more businesses share their possession so that
they can achieve their aims and objectives , then it is known as strategic alliance
(Eccles and Krzus, 2010).
▪ Licensing: It is the model through which a parent enterprise are allowing other
corporates to utilize its trademarks in return of certain money. The parent
company is called licensor and other venture is called licensee.
▪ Franchising: Under this, main or parent corporation not only offers its
trademarks but additionally provide other alleviates like cost of maintenance,
strategies, etc.
 Sustainable growth: This is nothing but keeping on or continuing the growth of
corporate. This is further explained below:
▪ Related diversification: When an organisation makes or creates diversification
that is nearly incidental to product line, then it is called related diversification
(Dong-Hun, 2010).
▪ Unrelated diversification: when an enterprise creates its diversification that is
contrary from the present one is called unrelated diversification.
▪ Horizontal integration: When several firms are involving in a business at the
similar stage of manufacturing is called horizontal integration.
 Limited growth: This is less growing nature of company. The related terms are
explained below:
▪ Market penetration: This means penetrating the current market by enhancing
sharing of market of existed goods or raising new products. This can be done via
using several strategies like advertisement, giving discount, etc.
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▪ Market development: It is scheme through which a company provide current
goods or services in different market locations in order to expand their business
globally.
▪ Product development: Product development means scheming, creating and
selling brand for new product as per the demand of users. It aids in making more
money.
 Retrenchment: The components are described below:
▪ Turnaround: Turnaround plan is utilized for converting a low performance of
company into a gainful one by improving its performance (Cinquini and
Tenucci, 2010). It is usually applied to a troubled enterprise so that financial
situation can be managed by developing it at some extent.
▪ Liquidation: This scheme is used in a corporation when it comes to the last stage
of the life cycle. By using these plans firm closes its business processing and
trade or sell its important possession and money made from those assets are used
in paying their creditors.
▪ Divestment: This strategy involves marketing business to other corporations.
3.2 Justification of the chosen strategy
The new strategy chosen here by the help of Ansoff's matrix. This has given four another
marketing plans which is appropriate for the industry. The justification of all of them are listed
below:
 Marketing penetration: Via this venture is increasing their market share within the
present marketplace. This is made possible by selling large amount of products to their
customers.
 Product development: The fresh goods or services are developed for the existed market.
Company is improving their products by thinking how their products can meet the criteria
of satisfaction to their users (Chang and Chuang, 2011). Firm are also performing much
better than their competitors.
 Market development: Enterprises is also engaged in establishing their business in a new
marketplace. They have selected the location of market after conducting a vast survey
and identifying their users.
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 Diversification: Corporation is moving their market in new location at the same time
when their market is existed in older place. This is risky for them as they are not
considering their past experiences.
TASK 4
4.1 Roles and responsibilities of personnel
The implementation of strategy needs a person who are leading another personnels and
dividing their work among workers as per their duty and level in the corporate. The workers of
Volkswagen who are responsible for implementation of strategies must have some other roles
and duties. For the successful enforcement of planning, these roles and duties of personnels must
have to be intelligibly described (Campbell,Edgar and Stonehouse, 2011). CEO of Volkswagen
have the responsibility to spread the information related to strategies to all employees and other
members of company. He or she has also the responsibility to lead during strategical planning.
In the case of planning strategies, the personnel of enterprise who are charged for
enforcement of strategies are also responsible for maintenance of records. This is very necessary
for making schemes and aids in avoiding legal duties. Employees should also maintain ethical
and legal standard while implementing strategies. To make the implementation of strategy
successful monitoring should be properly done. Monitor and control means taking overview of
tasks at regular basis. This aids in identifying that whether workers have taken right steps while
implementing strategies. It also allows to take important or correct actions if needed. It is also
encouraging the complete performance of workers while planning strategy.
4.2 Estimated resource requirements for implementing a new strategy
Three main resources are needed in order to implement new plans. They are listed below:
 Human resources: In order to implement successful strategies in Volkswagen, human
resources are required. As this aids in recruiting most talented employees in company.
They are responsible for arranging training and development programmes for freshers
(Casadesus-Masanell and Ricart, 2010). They also take care of their wages arrangement.
This will improve the productivity as well as turnover of corporation.
 Financial resources: Financial resources are those that are needed to finance when
strategies are being formulated. It can be done via two methods that is debt and equity.
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Equity is mostly prefer by company as they do not face any interest bearing price on
principle.
 Time and material resource: Certain time is needed to implement a strategy. Some
materials are also required in order to implement a project (Burlton, 2010). Volkswagen
have to use good quality machines or instruments to complete their projects. Company
have to finish their projects before or as per the allocated dead line. This will aids in
gaining the interest of clients.
4.2 Contribution of SMART targets to the achievement of strategy implementation
Smart target means goals must be specific, measurable, realistic and achievable in
specific time. The contribution of smart target are listed below:
 Target should be specific in nature as if it is not the same then all efforts and hard labour
of corporate will go in vain (Astrachan, 2010).
 It also should be measurable as per the setted goals. This helps in examining the level or
standard of work. If it is not measurable then any errors or fault cannot be identified and
no improvement will be done at that direction in order to minimize that.
 Volkswagen should set their aims and objectives that can be achieved in a limited period
of time. If target is not attainable, then it is very difficult to earn profit. Because the trust
will be broken among their users as they do not complete their task at time (Auzair,
2011). But if they complete the assignment as per the specified time limit then they will
again gain the trust of their consumers.
 Additionally, the goals should be realistic in nature because if this is imaginary in nature
then how workers will works according to that and it is not possible to achieve those
goals. Hence, company should think in advance about their aims and objectives so that it
can be attainable.
 Every work should be completed in a time interval. Therefore, Volkswagen should decide
a limited time interval to achieve the targets. They have to set time for any task
completion. And this has to be followed by their workers.
CONCLUSION
From the above based report it has been concluded that business strategy is nothing but a
scheme that is made before establishing any business. Some methods such as Ansoff's matrix can
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be used to make new strategies or alternate strategy such as market penetration, product
development, market development and diversification. Some important resources are explained
like time and material resource, financial resource and human resource. The environmental
analysis is done here where impact of political, economical, social, technological, environmental
and legal factors are described. This may be positive or negative. The swot analysis is also
performed in order to understand strength, weaknesses, opportunities and threats of Volkswagen.
The significance of stakeholders are also considered and for doing stakeholder analysis
Mendelow's matrix is used where roles of certain persons are decided who are interested in
business of corporate.
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