Business Strategy Analysis of Volkswagen: Market Entry and Growth

This report provides a comprehensive analysis of Volkswagen's business strategy. It begins with an introduction to business strategies and their importance, followed by a SWOT analysis to assess Volkswagen's strengths, weaknesses, opportunities, and threats. The report then delves into an environmental audit using the PESTEL framework to understand the political, economic, social, technological, environmental, and legal factors influencing the company. Stakeholder analysis is examined to determine the significance of stakeholders when formulating a new strategy. The report proposes a new strategy for Volkswagen, focusing on joint ventures and market growth, and analyzes alternative strategies such as substantive growth, limited growth, and retrenchment. The selection of the joint venture strategy is justified, highlighting the roles and responsibilities of personnel involved in its implementation, including finance, research and development, and production managers. The report also analyzes the estimated resource requirements for implementing the new strategy, including technology and personnel, and evaluates the contribution of SMART targets to strategy implementation. The conclusion summarizes the key findings and recommendations.

Business Strategy

Table of Contents
INTRODUCTION................................................................................................................................................3
TASK1............................................................................................................................................................3
1.1Assess how business missions, visions, objectives, goals & core competencies inform strategic planning. 3
1.2 Analyse the factors that have to be considered when formulating strategic plan......................................4
1.3 Evaluate the effectiveness of techniques used when developing strategic business plans........................4
M1 Make an effective judgment about the value to your business plan of mission statements, vision
statements,.......................................................................................................................................................5
M2 Explain and then evaluated the key techniques available to the business.................................................5
TASK2............................................................................................................................................................5
2.1 Analyses the strategic positioning of Volkswagen .....................................................................................5
2.2 Carry out an environment audit for VW AG................................................................................................6
2.3 Assess the significance of stakeholder analysis when formulating new strategy for Volkswagen..............7
2.4 Present a new strategy for Volkswagen......................................................................................................7
TASK3 ...............................................................................................................................................................8
3.1Analyse the appropriateness of alternative strategies relating to market entry, substantive growth,
limited growth or retrenchment for Volkswagen.............................................................................................8
3.2 Justify the selection of a strategy...............................................................................................................8
TASK4............................................................................................................................................................9
4.1 Assess the roles & responsibilities of personnel ........................................................................................9
4.2 Analyses the estimated resource requirements for implementing a new strategy....................................9
4.3 Evaluate the contribution of SMART targets to the achievement of strategy implementation................10
CONCLUSION..............................................................................................................................................10
REFRENCES.................................................................................................................................................11

INTRODUCTION
Business strategies are the long term plan framed for mainly achieving the goals and
objectives of the business organisation including the various factors. It leads to specifying the
targets and the objectives of the organisation. It also helps in framing plans and policies for the
business for their operations. Volkswagen is an automotive industry deals with the several types of
car lines established mainly in the German and it is the largest automaker company worldwide
(Phapruke Ussahawanitchakit, 2011). In this report the Volkswagen asses their business vision,
mission, goals into the strategic planning and also highlights on the significance of the stakeholders
on the strategic planning.
TASK1
Covered in PPT
TASK2
2.1 Analyses the strategic positioning of Volkswagen
For analyzing the strategic positioning of the Volkswagen the SWOT analysis can be done
which helps in identifying the strength, weakness, opportunities and the threats. By gathering the
information through the SWOT analysis the Volkswagen may take actions related to the business
strategies for gaining the targets and the objectives of the business. The SWOT analyses of
Volkswagen are:
Strength:
 Has an ability to work in the dynamic environment.
 The Volkswagen has a strong relationship with china and had a joint venture with the local
Chinese automakers.
 They had a great expansion of business in several countries and have the most largest
portfolio among all the competitors of automakers.
Weakness:
 They have a low market share
 The Volkswagen had a led a negative impact in the peoples mind of their brand
 They suffer from the low expertise knowledge and had no innovation in work related to
battery vehicles.

Opportunities:
 They have an opportunity to perform within the changing environment.
 The Volkswagen has the opportunity to get emerged in the Indian market and expands their
business.
 They can grow more factories in china for the further growth of the business (Li-heng, 2013)
Threats:
 Increment of other competitive brands
 The local transportation facilities decrease the sale of the cars individually
 The government rules and taxation policies.
2.2 Carry out an environment audit for VW AG
For getting the detailed knowledge about the environmental situations of the Volkswagen
the PESTEL analysis can be done.
 Political factors- The political factors influence on the political behavior of the business. It
includes the tariff, taxation policies and gets influenced due to the international trade and
effects on the subsidies on the taxes and duties and affects on the overall legislation.
 Economic factors- The economic factors consist of the influence on e exports and imports
and the activities related to their taxation rate changing. There wide range in the economic
scale and their capacity power which leads to cause for the industry.
 Social factors- The Volkswagen aims at performing the work by filing the corporate social
responsibility (CSR) (Rangkuti 2013). The social factors also highlights on the consumers
behavior and taste and preferences and their ability of purchasing the car.
 Technological factors- It leads to innovation in technology working with new technology for
cars and advancements in the work performance.
 Environmental factors- The environment faces certain issues related to global warming and
certain climatic issues. As the organization produce various levels of waste from their
production like chemical waste and co2. The Volkswagen consists working on vehicles that
emerged low gas emission and moving towards the green products.
 Legal factors- The legal factors include the rules and the regulations and consider the legal
process for the working. The legal part includes the trademarks of the vehicles and the
competitive brands and their branding positions.

2.3 Assess the significance of stakeholder analysis when formulating new strategy for Volkswagen
Stakeholders analyzing is a method of determining the effective people that have a great
interest in the business. They had a significant impact on the business activities and they are also
engaged in the decision making. The planning for the business can also determined by them. The
Volkswagen firstly identify the strengths of their stakeholders that helps in making changes in the
strategies of developing the new strategy which leads to an increments in the business activities
(Milovanovic, 2015). For the generation of the new project an formulating the changes in the
existing strategies of the business the Volkswagen has to evaluate the stakeholders that will helps in
analyzing the behavior, attitude and the interest of the stakeholders. By analyzing the stakeholders
the Volkswagen will be in a state to identify the role player within the organization and with whom
management can allot the roles and duties for the dynamic environment. This indicates the
delegation of work according to the interest of the individual. The organization also consists a
regular check or monitoring the stakeholder performance which aims at evaluating the strength and
for attaining the business strategy. By providing the sufficient knowledge to the stakeholders about
the changes leads to a beneficial for the business at the time of planning.
2.4 Present a new strategy for Volkswagen
The new strategy adopted by the Volkswagen is of growing together. They aim at building up a new
and a better and powerful Volkswagen. They facilitate their customers with providing more vehicles
according to their suitability and the range and deals with various technological changes for getting them in
implementation for their business. They focuses on presenting an attractive investment policies which
provides them profitability and remains reliable in nature. For overcoming from the financial crises and
surviving in the competitive scenario they may adopt the market strategy such as joint venture. The joint
ventures are considered as the effective strategy in terms of development of the business. The Volkswagen
according to this market strategy may evaluate the situation and helps in determining the other organization
who are well established in the market. This includes low funds and the recruitment of the skilled staff and
they may also continue with the existing staff y providing them training and briefing the about the work and
target more on the staff who has more depth knowledge about the market and their production related
activities (Ghikas, 2012). The joint venture considers the risk factor at the minimum level as both the
parties have equal distribution of the resources an equal support and contributes according to the contract in
the organization both are responsible.

TASK3
3.1Analyse the appropriateness of alternative strategies relating to market entry, substantive growth,
limited growth or retrenchment for Volkswagen
There are various alternative strategies that can be implemented by e Volkswagen for achieving the
objectives and goals. The following alternative strategies are:
Substantive growth- The substantive strategy includes the horizontal and the vertical integration that can be
utilized in the expansion of the business. It is beneficial in getting the resources which the competitors are
involving at the time of preparing the same segments o the business. The Volkswagen leads to supply of their
products in different states and in different marketplaces this provides them a idea of different cultural and
trends changing of the different places which helps them in producing according to it and surviving more in
the competitive world (Milovanovic, 2015). Doing sufficient changes by the Volkswagen in their products
line and services leads them for beneficiary and encourage them for doing more expansion in their business
and reaches business to a certain competitor level. This leads to providing more satisfactory services to the
customers.
Growth strategy- For the expansion of business and achieving the goals of the business the Volkswagen may
executed the growth strategy. This helps in promoting the existing products into the new market including
several benefits. This leads for expansion of business and making aware the people of the various products.
3.2 Justify the selection of a strategy
By adapting the values that have been evaluated from the external and internal market of the
Volkswagen, the joint venture that is the market growth has been determined for the management. For
implementing the strategy the company may do not have to more changes the slightly change are required in
the functional activities and also regarding the policies build up for the staff members they framed for the
further processing does not requires a huge amount of change or development(Business strategy, 2017).
This leads to an easily acceptable method for the organizations as does not require many efforts for the
change. These strategies will also helps the Volkswagen is investing a low amount of funds for the
development of the infrastructure. They acquired the skilled staff members for the operations to be
performed. It will emphasis on the increment in the production level as the risk factor gets distributed among
both the parties (Agustang, Suparman and Hastuti, 2016) .The sharing of the risk will helps them in
taking more decision related to production frequently as they both will be responsible for any uncertainty
occurs due to any consequence. They aims at creating marketing strategies more feasible in nature and
changes according to the dynamic environment and adopts certain technological changes in their business.
Joint venture focuses on fuller utilization of the resources at its best way and hires experts for the operational
work and for the better utilization of the technology.

TASK4
4.1 Assess the roles & responsibilities of personnel
The personnel are mainly responsible for the various activities in the strategic planning. The roles of
personnel which are important in marketing implementation are:
Role of finance manager- For the execution of the strategy for the joint venture the finance manager plays
an important role. They will be looking over the financial transactions and will identifying the estimated cost
which occurred in the starting period of first three and four months and are responsible for providing the
sufficient information to the top managers for doing further changes in the financial state of the Volkswagen
(Fu-xiu,2012). The managers will also focuses on the return on investments values for both the partners.
Role of research and development manager- For the implementation of the new strategy in the market the
role and research manager may gathers information related to that new strategy and their uses and highlights
the changes that the Volkswagen will be facing t the time of executing of that strategy. The manager will
evaluate and explores the market and collaborate the existing policies with the new plan.
Role of production manager- In order to execute the new strategy in the market the production manager
plays a significant role. They are responsible for providing training and guidance to the new staff as well as
the existing for the further processing. The production manager determines the issues related to the business
by analyzing the strategies before implementing them (Gupta, 2011 ).
4.2 Analyses the estimated resource requirements for implementing a new strategy
There are various resources required for implementing a new strategy in the Volkswagen. The
resources which are required at the time of execution of strategy are:
Technology- Techniques are the sources for the production which reduces the human efforts. There are
different types of techniques which are obtained by the competitors for their business. The Volkswagen must
adapt certain up graded technologies for their processing which helps them in moving towards their goals
and objectives. There work may be based on the joint venture strategy. The modern technologies and
innovative methods help in increasing the production level and increase the productivity.
Human resources- The Volkswagen will hire the experts in the fields. They may be hired for the
implementation of the different strategies. For keeping a regularly check on the activities of production and
for training providing the Volkswagen requires a human resource who may look upon all the essential
business work.
Financial resources- Finance is the most important factor for any business. For the execution of the strategy
and at the initial stage of the joint venture the Volkswagen requires financial funds for the regulation of work
for the further communication and for the equipments the finance is required. For the business operation and
for providing salaries to the employees in the Volkswagen they require a stable finance position.

4.3 Evaluate the contribution of SMART targets to the achievement of strategy implementation
It is a mandatory for the Volkswagen to performs the work according to the SMART objectives that
are been regulated for the new strategy. The SMART targets help the company to focuses on the
performance and business and also aims at maintain the standards. They mainly highlights on the doing
efforts for the increment in the level in the business and motivates the business for engaging more in the
production and the sales departments which leads to increases the productivity and reaches to a profitable
state. This type of targets helps the Volkswagen in sustain the business in the china markets. Apart from that
the SMART targets helps the Volkswagen to maintain their operational flow of the business and performs
the business activities in such a way which provides them maximum effectiveness. Despite of several
advantages the SMART targets an also face consists May disadvantages in nature ( Effendy and Baizal,
2013). They have the lack of consideration on the technological factors and the investment factors at the
time of implementation of the strategies. They mainly focus on the targets level related to the one unit
measuring which does not helps in gaining the goals and objectives as of whole also leads to a decline state
and considers as the drawback of the SMART targets. Moreover the Volkswagen have the sufficient
knowledge related to their fields and for implementing of the resource for the strategic planning but the using
of technology lacking from the SMART targets affects the business operations.
CONCLUSION
From the above report it has been concluded that the business strategies plays an important role in any
business. They affect the business operations. A proper business strategy helps in granting the success to the
business. Business strategies emphasis on the growth and sustainability level in the market. The Volkswagen
is a car manufacturing industry. The mission, vision, goals, objectives and the core competencies of the
Volkswagen are been discussed. The external audits of the Volkswagen also occurred and focus on the needs
of the stakeholders within the organizations. The Volkswagen work is based upon the joint venture in the
report and also with the potential organization. The report also highlights on the roles and the responsibilities
of the leading people and the requirements of the human resources financial resources and the technological
resources at the time of implementation of the strategy in the Volkswagen.
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Business strategy . 2017. [Online]. Available on < http://businesscasestudies.co.uk/business-
theory/strategy/business-strategy.html>. Accessed on [22 May 2017].