Business Strategy Report: Volkswagen's Strategic Positioning

This report provides a comprehensive analysis of Volkswagen's business strategy, examining its strategic positioning, environmental audit using PESTLE analysis, and the significance of stakeholder analysis. The report delves into Volkswagen's strengths, weaknesses, opportunities, and threats using a SWOT analysis, and proposes a new strategy focusing on limited growth through electronic car production. It explores alternative strategies, justifying the chosen approach and detailing the roles and responsibilities of personnel in strategy execution. The report also outlines the resources required for implementation, including financial, physical, and human resources, and emphasizes the contribution of SMART targets. The analysis highlights the importance of adapting to environmental regulations and consumer preferences to maintain a competitive edge in the automotive industry.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2 ...........................................................................................................................................1
2.1 Strategic positioning of Volkswagen ...............................................................................1
2.2 Environmental audit.........................................................................................................2
2.3 Significance of stakeholder analysis................................................................................3
2.4 New strategy.....................................................................................................................3
TASK 3............................................................................................................................................4
3.1 Alternative strategies........................................................................................................4
3.2 Justification of strategy.....................................................................................................5
TASK 4............................................................................................................................................5
4.1 Roles and responsibilities of personnel in strategy execution..........................................5
4.2 Resources required for implementation of strategy..........................................................6
4.3 Contribution of SMART targets during strategy implementation....................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Long term planning of a business to achieve its desired objectives is known as business
strategy. Basically, it is a summary of all actions like how company will achieve its objectives,
meet the requirements of its customers, stakeholders and will get competitive advantages over
others. Further, business strategy gives an opportunity to the manager to evaluate profitability of
each product’s sale by company which guides in expansion and reduction of product line.
Volkswagen one of the larger manufacturer and retailer in automobile sector is also taken under
this report. Various factors which must be considered by an enterprise during formulation of
strategic plans are all detailed in this report. Further, strategic positioning and environmental
audit of Volkswagen is also mentioned here.
TASK 1
Covered in PPT
TASK 2
2.1 Strategic positioning of Volkswagen
Organisational audit is a process of evaluating various activities of firm to better satisfy
the needs of its customers and to increase its market share. Main benefit of organisational audit is
that it gives information to manager regarding the capabilities of company. SWOT is an effective
tool which can be used by the managers of Volkswagen.
Strengths:
 Specific skills of a company which make it different from its rivals is known as the
strength of company (Alsudiri, Al-Karaghouli and Eldabi, 2013).
 Effective application of these strengths help firm to achieve its target market easily.
Following are the main strengths of Volkswagen:
 Firm use an effective or standard method to make products for its customers which help
in maintaining the quality. Operation of firm are expanded in number of areas which help firm to generate large
amount of revenues.
Weaknesses:
 Increase number of competition.
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 Lack of skills and ability of workers negative affect the effectiveness of business
operations.
Opportunities:
 Increase scope of technological products give an opportunity to firm to expand its
activities in number of areas. Changing needs and wants of customers provide an opportunity to firm to add new
features in its product.
Threats:
 Change in government and its policies create unnecessary hurdles in functioning of
business.
 Increase number of competitors is one of the biggest threats for firm.
With effective use of SWOT, Volkswagen can capture a better place in market.
2.2 Environmental audit
Process of identifying various elements exist in environment and its impact on business
activities of a company is known as environmental audit. This guide manager of firm in decide
future activities of business to achieve set results. For this, PESTLE is an approach which can be
used by the managers of Volkswagen. Political factors: As firm is operating on an international level that's why Volkswagen
face number of issues while execute its operations (Azar, 2011). Policies and rules of
government of different countries affect the business activities of Volkswagen. Economic factors: Various elements relate with the economy of a country like interest
rate, wage rate, inflation, deflation an many more affect the business activities of an
enterprise. For example if banks of UK will increase the rate of interest on loan than this
will create a hurdle in expansion business operation of Volkswagen. Social factors: This elements cover the factors related with the routine life of customers
like their habits, attitudes, behaviour and many more. All this affect the final purchase
process of customers. Technological factors: Technology play an essential role in automobile sector that's why
use of updated technology for making make and offer products to customers is very
essential.
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 Legal factors: Sometimes government of country decide the methods and processes
which must be used by enterprise to work effectively. This affect the operations of
company.
 Environmental factors: Every firm is liable to make environment friendly products. To
avoid unnecessary actions of government it is very essential for Volkswagen to use
quality raw material for produce final products for customers.
By evaluate all these factors managers of firm can identify the positioning of Volkswagen
in market.
2.3 Significance of stakeholder analysis
Individuals who participate in the business activity of a company and provide their
support to achieve end results is known as stakeholders (Bucolo and Matthews, 2011). Process of
analysing the impact of business decision on relevant parties related with enterprise is knows as
stakeholder analysis. Collected information is used by managers to assess how interests and need
of stakeholders should be addressed by business in a policy, program and project plan.
Companies use the concept of stakeholder analysis during preparation of a big project. This help
manager to know their contribution in success of a project. The main advantage of execute
stakeholder analysis is that it help manager to know about the expectation and what stakeholders
want from the firm (Business Strategy, 2017). By addressing those needs management can get
their support which is very essential in overall success of company. Further, stakeholder analysis
help business manager to choose effective marketing strategies for completion of work. In this
way firm can get competitive advantage in market.
2.4 New strategy
Government of UK make it compulsory for every company operate in automobile sectors
to use quality raw material for produce and offer environment friendly products to its clients.
This is done by government due to increase concern about environment and due to increase
amount of pollution in air and water. Cars which produce more pollution are highly restricted in
United Kingdom. Government of UK do this to decrease the amount of contamination in air and
water and make it clean (Hall and Wagner, 2012). At early stages, Volkswagen made the cars
which produced great amount of pollution after reveal of this fact government stop the
production and then firm introduce a number of changes in features of its vehicles. After this
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incident firm start doing production of electronic cars which was very unique and different. Idea
of producing electronic cars provide number of advantages to firm and give an opportunity to
company to capture a larger market share. This was the best solution at that situation as this
reduce the number of issues face by firm.
TASK 3
3.1 Alternative strategies
To attract large number of customers towards its products and to capture a larger market
share one from the following strategies can be used by Volkswagen. Substantive growth strategy: Under this, enterprise decide to expand its activities either
horizontally or vertically to capture a larger market share. Volkswagen can either merge
with another company or can acquire it for operate in new areas (Bucolo and Matthews,
2011). One of the main advantage of expansion is that it increase the number of profit of
firm. VW can increase the amount of its profit by introduce the concept of electronic cars
in various areas. Limited growth: Number of different tactics are used by company to achieve its set
target, under this strategy. Product development, innovation and penetration are the main
tactics used by firm in this. Innovation concept can be used by the Volkswagen to
introduce its electronic cars. In this case company can go for a joint venture as this will
provide necessary support and resources to organisation and firm can implement the
strategy easily.
 Retrenchment: This is one of the most used and popular strategy, in this managers
evaluate the effectiveness of every product sold by company (Business Strategy, 2017).
On the basis of collected data products which does not create any profit for the company
are deleted by company which save huge amount of firm's cost. By use this approach
Volkswagen can invest its funds in other profitable ventures and can increase the share of
its market. Revenue generation, cost reduction and assets reduction are the main
components of this strategy.
In case of Volkswagen, firm should go with limited growth strategy.
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3.2 Justification of strategy
Due to production of pollution vehicles, Volkswagen face number of issues which affect
the quality of its operations. Not to face the same situation in future, it is essential for firm to use
quality products for production of electronic based cars (Butler, 2012). Due to high amount of
pollution in air and water, UK is facing number of environmental issues. To remove this
problem, legal authorities identify and evaluate the methods which must be chosen by firm to
make products for its clients. Government tests the product before giving permission of its
production to enterprise and along with this, top authorities test how friendly a product is.
Thus, to achieve growth and success of firm's product, it is very essential for Volkswagen
to make products as per the rules and standards set by government (Granados and Gupta, 2013).
In this way, with the help of limited growth strategy, enterprise can attract a large number of
customers and capture higher market share.
TASK 4
4.1 Roles and responsibilities of personnel in strategy execution
Application of new methods, process and techniques for completing a task is known as
process of strategy implementation. Effective implementation of a strategy is very essential for a
business enterprise for attainment of end objectives. Workers of firm play a big and important
role in effective implementation of any strategy in enterprise. From large number of individuals
managers and employees are two important personnel which play an effective role in effective
implementation of any strategy (Dandira, 2011). Main roles of personnel involved during
strategy implementation can be understood by the following points:
Managers - Manager are the one who use various type of incentives to motivate
employees to provide their support in business activities. They identify the trends exist in market
and introduce changes accordingly.
Employees: Workers are one of the essential element of every organisation as these are
the one who make final products for large number of customers. At the time of strategy
implementation it comes under the responsibility of employees to try to understand why
management is introducing such kind of changes at workplace. At the time of strategy
implementation it comes under the responsibility of employees to apply their skills and
knowledge so firm can produce better quality cares for its customers.
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Engineers: Engineers provide their technical advice and guidance during the whole
process of strategy implementation. For implementation of limited growth strategy engineers will
support the firm during production of electronic cars.
4.2 Resources required for implementation of strategy
An enterprise can nit implement a strategy in condition of lack of resources. It is very
essential that Volkswagen should have all the resources require for implement the strategy. Main
resources which are require in an enterprise during process of strategy implementation can be
understood by following points: Financial resources: A single task of enterprise can’t be complete without proper
amount of funds because this is one of the essential resource of every enterprise. Further
shortage of funds creates unnecessary delays and hurdles in activity of business
(Elhamma and Zhang, 2013). It is very essential that Volkswagen should have proper
amount of funds to implement strategy in an effective way. Physical resources: Resources such as furniture, equipment and other technical resources
all come under the category of fixed resources. All these are require for strategy
implementation.
 Workers: Employees are one of the valuable assets of every enterprise and play a big role
in success of company. Skilled and capable employees are one of the prerequisite for
effective implementation of strategy.
All these are the main resources which will be require by Volkswagen for implement its
strategy and during the production of its electronic cars.
4.3 Contribution of SMART targets during strategy implementation
Strategy implementation is a process of executing various activities to achieve end goals.
More effective will be the implementation of strategy more effective outputs it will provide to
company (Galpin and Lee Whittington, 2012). To achieve this manager of Volkswagen can use
help of written plan in which he can use the concept of SMART targets. Specific, measurable,
attainable, realistic and time bounds targets help manger to achieve end results more effectively. Specific: It is very essential that end targets of strategy must be specific. It helps the
manager to give direction to activities of employees in order to achieve end results.
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 Measurable: Main advantage of set measurable targets is that it help firm to calculate the
profits or advantages of strategy implementation to company. Acceptable: End results of strategy implementation must be acceptable by managers and
employees at all level (Kalyani and Sahoo, 2011). This create a positive environment and
add effectiveness in whole process. For example firm decide to expand its business
activities in new areas than it must be consulted with all employees as without their
support, enterprise cannot do the same. Relevant: It means that all results of strategy implementation must be like that, it add
value to the whole process of organisation.
 Time bound: It is very necessary that a time for complete a task must be set by managers
(Goll and Rasheed, 2011). This increase effectiveness of business operation and ensure
completion of task in time. A time bound objective for Volkswagen can be increase the
sale of its products by 15 % in coming 6n months.
Concept of SMART objective increase the effectiveness of strategy implementation.
CONCLUSION
From the above information, it can be summarised that effective business strategy must
be used by Volkswagen to execute its commercial activities so as to sustain in the long run. With
the help of this, company can maintain its quality of products and at the same time, will utilise its
resources at an optimum level that will help in attaining a great success with competitive
advantages over others in the market.
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REFERENCES
Books and journals
Alsudiri, T., Al-Karaghouli, W. and Eldabi, T., 2013. Alignment of large project management
process to business strategy: A review and conceptual framework. Journal of Enterprise
Information Management. 26(5). pp.596-615.
Azar, O. H., 2011. Relative thinking in consumer choice between differentiated goods and
services and its implications for business strategy. Judgment and Decision Making. 6(2).
p.176.
Bucolo, S. and Matthews, J. H., 2011. A conceptual model to link deep customer insights to both
growth opportunities and organisational strategy in SME’s as part of a design led
transformation journey. Design management toward a new Era of innovation.
Butler, D., 2012. Business development: a guide to small business strategy. Routledge.
Dandira, M., 2011. Involvement of implementers: missing element in strategy formulation.
Business strategy series. 12(1). pp.30-34.
Elhamma, A. and Zhang, Y. I., 2013. The relationship between activity based costing, business
strategy and performance in Moroccan enterprises. Accounting and Management
Information Systems. 12(1). p.22.
Galpin, T. and Lee Whittington, J., 2012. Sustainability leadership: From strategy to results.
Journal of Business Strategy. 33(4). pp.40-48.
Goll, I. and Rasheed, A. A., 2011. The effects of 9/11/2001 on business strategy variability in the
US air carrier industry. Management Decision. 49(6). pp.948-961.
Granados, N. and Gupta, A., 2013. Transparency strategy: Competing with information in a
digital world. MIS quarterly. 37(2).
Hall, J. and Wagner, M., 2012. Integrating sustainability into firms' processes: Performance
effects and the moderating role of business models and innovation. Business Strategy and
the Environment. 21(3). pp.183-196.
Kalyani, M. and Sahoo, M. P., 2011. Human resource strategy: A tool of managing change for
organizational excellence. International Journal of Business and Management. 6(8).
p.280.
Online
Business Strategy. 2017. [Online]. Available through:
<http://finsburyfoods.co.uk/who-we-are/business-strategy/>. [Accessed on 14th October
2017].
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