Business Strategy Analysis: Volkswagen's Organizational Audit Report

This report provides a comprehensive analysis of Volkswagen's business strategy. It begins with an introduction that highlights the importance of strategic planning in achieving organizational goals, particularly within the competitive automotive market. The report then delves into a detailed examination of Volkswagen's mission, vision, goals, objectives, and core competencies, emphasizing the significance of these elements in formulating an effective business strategy. The report also explores key factors influencing strategic planning, such as industry dynamics, competition, strengths and weaknesses, management, and resource considerations, using Pearls restaurant as an example. The report further evaluates the effectiveness of techniques like the BCG Matrix and PIMS in developing business strategies. Part 2 focuses on analyzing Volkswagen's strategic positioning through an organizational audit, employing the SWOT analysis to assess strengths, weaknesses, opportunities, and threats. An environmental audit using PESTEL analysis is also conducted to identify political, economic, social, technological, environmental, and legal factors affecting the company. The report also addresses the significance of stakeholder analysis in formulating new strategies, presents a new strategy for Volkswagen, and analyzes alternative strategies relating to market entry, growth, and retrenchment, justifying the chosen strategy. Finally, it assesses the roles and responsibilities of personnel in strategy implementation, estimates resource requirements, and evaluates the contribution of SMART targets to successful implementation, concluding with a summary of the findings and recommendations. The report utilizes secondary sources such as academic journals and industry reports to support its analysis.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1.1 Mission, vision, goals, objectives and core competencies ..............................................1
1.2 Factors that needed to be considered while formulating strategic planning....................2
1.3 Evaluate the effectiveness of techniques used when developing strategies business plan3
PART 2............................................................................................................................................4
2.1 Analyse the strategic positioning of a given organisation by carrying out an organisational
audit........................................................................................................................................4
2.2 Carry out an environmental audit for a given organisation..............................................5
2.3 Assess the significance of stakeholder analysis when formulating new strategy............7
2.4 Present a new strategy for a given organisation...............................................................8
3.1 Analyse the appropriateness of alternative strategies relating to market entry, substantive
growth, limited growth or retrenchment for a given organisation..........................................9
3.2 Justify the selection of a strategy...................................................................................10
4.1 Assess the roles and responsibilities of personnel who are charged with strategy
implementation.....................................................................................................................11
4.2 Analyse the estimated resource requirements for implementing a new strategy for a given
organisation..........................................................................................................................11
4.3 Evaluate the contribution of SMART targets to the achievement of strategy
implementation in a given organisation...............................................................................13
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15
.......................................................................................................................................................16

INTRODUCTION
In recent scenario, business strategies are plays important role within the organisation
because they helps to attain targets and goals as well as getting success in competitive market
place. Thus, every business firms seeks to be adopt smart and appropriate methods within the
organisation so that they can enhance their increase their profitability and productivity in
effective and efficient manner (Scholes, 2015). Therefore, Volkswagen is a German Auto-maker
company thus at this time it is one of the largest and leading auto-maker organisation at
worldwide level. This report will conducting a organisational and environmental audit in the
context of Volkswagen. So that effectively identify the major factors which impacts on company
either positive or negative. Apart from this there will explaining the importance or benefits of
stakeholders while implementing the business strategies within the company. Additionally, there
will significantly represent appropriate new strategy for Volkswagen. Moreover, major
alternatives of business strategies will explaining in a systematic manner such as market entry,
substantive growth, limited growth and retrenchment. In the last, there will elaborating major
roles an responsibilities of personnel while implementing the strategies as well as will estimating
the necessary resources. However, will significantly evaluate the affect of strategies on business
fir with the help of SMART method (Teece, 2010).
PART 1
1.1 Mission, vision, goals, objectives and core competencies
It is important for a firm to make effective business strategy which helps a firm in
progressing on the path of success in a stabilised manner. To ensure that there must be a
comprehensive strategy it is important to inculcate mission, vision, goal, core competencies in
the strategic plan. Business strategy for any company is designed sighting the core competency
of the firm. As it helps in strengthening of the base of strategic plan and act as a support for the
plan. On the other hand mission provides the last destination where firm aims to reach. This acts
as a target citing which company makes its business strategy. Vision provides idealogical
framework to the construction of strategic plan. It acts as a torch bearer using which any strategic
planning is constructed. Goals and objectives acts as a blue of the targets that company aims to
achieve by its business and hence it is the reason for which strategic plan is constructed. So
mentioning of goals and objectives always provide the purpose of the strategic plan. Pearls
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restaurant is a SME that is operational in Edinburgh U.K. It is serving many people in the
locality. Basic ingredients for its strategic planning is as follows:
Mission: To become one of the biggest restaurants in U.K. having a customer base of
hundreds of people by implementing the best services in the industry.
Vision: To become the restaurant that is capable of serving best quality food where users
can relax with the ambient environment.
Goals and Objectives
To satisfy the taste of users that comes for the life time experience.
To enhance the quality of atmosphere inside the restaurant where people can relax in the dim
light and pleasant music.
Core competencies: Pearls have the best quality chefs that comes from different parts of
the country and has the knowledge of tastes of food served all around the world. These elements
will helps in making the business strategy for this restaurant.
1.2 Factors that needed to be considered while formulating strategic planning.
There are several factors that supports the strategic planning of the firms these factors
needs to be analysed so as to make the strategy a success.
Industry: For any firm it is important to understand the what is the state of the company
in which the firm is operating. This industry is growing at a very high speed hence the scope of
growth for pearl restaurant is bright in the future.
Competition: strategic planning is done so that have competitive edge over the
competitors. There are many small restaurants that are present in the locality and many bigger
firms are operational in U.K. The competition that this firm is facing is very high. In the outside
environment of the company regularly increase competition, so that sometimes directly impacts
on company's performance either positive or negative in nature. Thus, it is required to be
effectively identify the major competitors of the company then as per the situation should be
choose appropriate and suitable strategies within the organisation.
Strength and weaknesses: In the construction of strategic planning strength and
weakness of the firm needs to be evaluated so that the plan does not fails. Pearls has its strength
in the form of its skilled staff members as well as weakness is that it has less amount of financial
resources. Any company's strengths and weaknesses are represent their power and capabilities
due to this, it is necessary to be identify and measure with the help of smart ideas and methods
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because it assist to take corrective action as well as aids to increasing profitability and
productivity of the company.
Management: Pearl has a small but effective management team that is capable of
implementing the strategic plan in a better way.
Resources: Pearl has limitation of the resources as being a small firm it has low seating
capacity as well as financial strength is weak.
1.3 Evaluate the effectiveness of techniques used when developing strategies business plan
For systematically analysing and measuring the effectiveness of an organisation so that
company can be used two type of methods such as follows:
BCG Matrix: This is one of the important aspect or method for every organisation
because in which all products and services are categorised into four sections, which are
explaining under follows:
Star: These type of services and products of the company have high growth rate and
high market share. Due to this, there are required to be invest more fund for taking appropriate
decision as well as for growing market share of the company.
Cash cow: These type of services of the company has low growth rate and high market
share. So that, there have high chances to increase revenue and profitability of the company.
Dog: This section of BCG matrix defined low growth rate and low market share. In
which company does not invest fund they try to stop production and focus on to produce
something new products for customers.
Question marks: This is the last stage of BCG matrix in which included those products
which have high growth rate and low market share. Due to this, there have chances of risk.
Profit impact of market strategy (PIMS): With the help of this technique effectively
identify the competitive advantage for an organisation. Therefore, there are explaining
importance of PIMS method such as follows:
 Inside and outside surrounding of the company
 Management system
 Effective allocation of works
 Appropriate strategies development for the company.
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PART 2
2.1 Analyse the strategic positioning of a given organisation by carrying out an organisational
audit
Organisation audit refers to, identifying and measuring the actual position and condition
of the business firm (Astrachan, 2010). A effective audit helps to take corrective action as well
as aids in decision making process. Apart from this, with the help of SWOT analysis method can
easy to conduct organisational audit in the context of Volkswagen. Thus, there are included four
important aspects such as strengths, weaknesses, opportunities and threats. This method assist to
enhance working performance of employees due to this they will significantly perform their
tasks so that respectively increase productivity and profitability of the company in a appropriate
manner.
STRENGTHS WEAKNESSES
 This companies has wide range of cars
and services due to this customers can
effectively choose as per their needs
and affordability.
 It has high brand name across all over
the world.
 Volkswagen is one of the largest and
oldest auto-maker due to it easy to
increased their customer level
 This organisation has more than
350000 employees within the
organisation at national and
international level
 Volkswagen has involved in hybrid
cars mad motor sports.
 Regularly increased the competition
level in automotive sector due to this
Volkswagen has limited market share
growth rate.
 Controversy and fraudulent activities of
Volkswagen impacted on its brand
image at global level.
OPPORTUNITIES THREATS
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 Volkswagen has an opportunity it can
make long term relationship with non-
German auto-makers
 It can be implement innovative things
and ideas while producing cars for
customers
 Volkswagen can enter in different
sectors of areas so that it can be
provides their cars to customers with
appropriate and attractive features.
 At this time, increased purchasing
power and capabilities of persons.
 Innovative things and features adopted
or implemented by their major
competitors due to this directly affects
the market share of Volkswagen.
 Regularly growing the cost of fuel it
negative impacts on selling rate of
Volkswagen cars.
 Government rules and regulations are
focus on to provide protection and
safety to local are makers such as
TATA.
2.2 Carry out an environmental audit for a given organisation
In the context of environmental audit, in which identifying and analysing the major
environmental factors of company. It is necessary for every business firm must be effectively
identify the causes because sometimes they directly impacts on organisation either positive or
negative in nature(Meskendahl, 2010). Therefore, there are conducting an effective audit within
the environment. Hence, PESTEL analysis tool can be used by Volkswagen for identifying and
determining important factors. In which included political, economical, social, technological,
environmental and legal.
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Illustration 1: PESTEL Analysis of Volkswagen
(Source- Matrice Pestel Volkswagen, 2017)
 Political: In the context of this factor, in which included laws, regulations, securities and
restrictions which have to be follows by every auto-maker companies in effective and
efficient manner. Thus, Volkswagen is one of the leading and oldest auto-maker company
across all over the world. There political factor is unstable in nature because it change
while change the government of the country. So that sometimes it positively impacts on
company and negative as well (Matrice Pestel Volkswagen, 2017). Therefore, it is
necessary to properly evaluate and analyse the political condition of organisations.
 Economical: Economy of the country depends upon several terms such as exchange rate,
currency fluctuation, taxation system and so more (Woodcock, Green and Starkey, 2011).
Thus, economic cause of the country such as decreasing purchasing power capabilities of
customers, increase inflation rate, employment and so more. Due to these kind of
situations profitability and sales of Volkswagen will be decreasing. Therefore, it is
essential to be effectively analyse and identify the economic conditions and situation of
the company.
 Social: The consumers of the company plays important role because they helps to get
success as well as increase the profitability and productivity of the company. Due to,
before launching any cars in the different market of the country then should be identify
identify and analyse the culture, society, living style of persons and so more. Hence,
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while effectively analysing the social factors of the company then it can be significantly
give fully satisfaction to customers as well as increase their sales (Dong-Hun, 2010).
 Technological: At this time, technology is regularly growing due to every company
seeks to be adopt something new and smart techniques and methods within the
organisation for attaining targets and objectives in effective and efficient manner.
Evermore, new techniques are helps to manage and control business activities and
operations in a appropriate manner. Additionally, with the help of new technologies a
organisation can easy to assemble parts of cars as well as effectively arrange all the
operations.
 Legal factor: In this factor included legislations, taxation polices, rules and regulations
which have to be follows by every auto-makers in a impressive manner. Legal rules and
regulations are helps to manage and control business activities and operations in effective
and efficient manner. Due to this, it is necessary to effectively follows and maintain
business operations in a significant way.
 Environmental: Volkswagen focuses on to adopt appropriate and ozone-friendly
features within cars. So that significantly control and reduce the Co2, pollution and
carbon from external environment. Environmental factors are directly impacts on
company's profitability and selling level. Thus it is required to be manage and control in a
impressive manner (Chang and Chuang, 2011).
2.3 Assess the significance of stakeholder analysis when formulating new strategy
Basically, stakeholders of the company can be understand as a group of persons which
plays important role in organisation development such as investors, customers, employers,
employees, suppliers, competitors, shareholders, government and so more. All these persons are
assist to increase profitability and productivity of the company as well as assist to attain targets
and goals in a significant style (Cooke and Saini, 2010). Therefore, stakeholder analysis method
can be used by Volkswagen for analysing and identify the major stakeholders of the company
who support in completing business activities and operations of firm in a impressive manner.
Moreover, there are elaborating the actual benefits and importance of stakeholder analysis
methods while implementing the business strategies within the organisation such as follows:
 For developing business firm organisation can take ideas and opinions from their major
stakeholders
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 Volkswagen can get support and guidelines from stakeholders
 With the help of stakeholders of company it can effectively take appropriate decision as
well as significantly resolve problems and issues.
 Stakeholders helps in increasing profitability and productivity of the company. Therefore,
stakeholders are plays important role within every kind of organisation because it helps in
decision making and planning process. Due to this significantly manage and control
business activities and operations as well as attain decided goals and objectives (Klettner,
Clarke and Boersma, 2014).
2.4 Present a new strategy for a given organisation
Every business firm seeks to be adopt and implement appropriate and new strategy within
the organisation so that they can significantly manage and control the business activities and
operations (Reinhardt and Stavins, 2010). Additionally, new strategies and methods assist in
getting success in competitive market place. In the context of Volkswagen, it can be used
substantive business strategy within the organisation, because in which included two major
methods such as merger and acquisition. In these method a company can combine with another
companies for expanding and increasing profitability level. Therefore, merger and acquisition is
one of the best method of enhancing sales and productivity of they company in a effective and
efficient manner, as well as with the help of them selected organisation also can recover the
damaged brand image in outside market place. Apart from this, Volkswagen can increase their
sales, compete with their major competitors, improve market share and so more (Slater, Olson
and Finnegan, 2011).
Apart from this, Volkswagen also can be used Porter's generic competitive model within
the organisation. Generally, in which included four aspects such as cost leadership,
differentiation, cost focus and differentiation focus. With the help of this model, selected
organisation can effectively easy to adopt different and new features in cars so that customers
acne easy to do differentiate from other company's cars as well as attract high number of
customers towards company. Therefore it is one of the best method of enhancing profitability
and selling level of Volkswagen.
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3.1 Analyse the appropriateness of alternative strategies relating to market entry, substantive
growth, limited growth or retrenchment for a given organisation
There are included different type of strategies and methods with the help of them easy to
manage and control business activities and operations in a significant style. Therefore business
strategies plays important role within the organisation because with the help of them a company
can easy to enhance their productivity and profitability level in a impressive manner. Thus, it is
required to be adopt smart and appropriate methods within the organisation for developing
business firm.
MARKET ENTRY STRATEGY Organic growth: This type of market entry strategies helps to define, when an
organisation using effective development method within the organisation as the same
way which has been used, so that can be carried out organic growth strategy.
 Merger: This is one of the best method while a company wants to be expand their
business firm in several areas so that it can be merge with another companies. With the
help of this method a business can reduce their investment level.
SUBSTANTIVE GROWTH
 Related diversification: When Volkswagen adopt diversification method at workplace so
managing an enhancing company at global level in which employers diversify their
works and operations in effective and efficient manner, so that it can be understand
diversification concept (Nordqvist and Melin, 2010).
 Horizontal integration: In this strategy, different type of organisation can combine with
several type of business fir but with same products and goods so that can be understand
as horizontal integration method.
LIMITED GROWTH
 Market penetration: With the help of this method a business firm seeks to be enhance
their market share as well as productivity in the effective and efficient manner. So that it
is necessary to be smart method and techniques for attracting high number of customers
towards organisation such as sale, discount, appropriate advertising and so more.
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 Market development: In the context of this market strategy, company adopt something
new and attractive method and ideas for increase sales so that they provides several
attractive offers to customers at national and international level.
RETRENCHMENT
 Turnaround: This type of market strategy adopted by underperforming companies
because they wants to become profitability organisation as well as enhance their sales and
productivity in effective and efficient manner. Therefore, with the help of this method an
organisation can effectively reduce to financial problems as well as significantly recovers
the financial crisis (Oltra and Luisa, Flor, 2010).
3.2 Justify the selection of a strategy
Volkswagen is a one of the largest and oldest organisation at national and international
level. So that it wants to be provides sound, attractive and environmental cars to customers so
that they can effectively compete with their major competitors as well as set a effective brand
image at global level. Therefore, effective and efficient market strategy helps to achieve
company's goals and objectives as well as it helps to enhance profitability in a the impressive
style. With the help of appropriate market strategy Volkswagen can significantly manage and
control the business activities and operations as well as effectively produce environmental,
attractive and sound cars for customers. Due to this, it can be expand their business firm at global
level as well as increase their profitability and productivity in a impressive way. Additionally,
Volkswagen also can be used merger and acquisition method within the working environment
because in which method a company can significantly merger or combine with other branded
companies. With the help of this method cited reduce their investment level, extra cost and so
more expenditures in a impressive style (Schrader, Freimann and Seuring, 2012). This is one of
the best method of developing business firm as well as for establishing a brand image in
competitive market place. Additionally, with the help of this strategy a company can
significantly enter in different areas and attract high number of customers towards business firm.
Apart from this, appropriate market strategies plays important role in every business firm
because it assist to enhance productivity and profitability of the company.
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