HND Business Strategy Report: Volkswagen's Strategic Planning

This report delves into the realm of business strategy, utilizing Volkswagen as a focal point. It commences with an introduction to the core concepts of business strategy, emphasizing its role in achieving both short-term and long-term goals, resource optimization, and competitive advantage. The report analyzes Volkswagen's strategic position, including an organizational audit leveraging SWOT analysis, an environmental audit using PESTLE analysis, and a stakeholder analysis to understand their influence on strategic decisions. It explores the formulation of a new strategy for Volkswagen, addressing environmental concerns and the adoption of electronic vehicles. The report then assesses the appropriateness of alternative strategies, such as substantive and limited growth, along with retrenchment strategies, and justifies the chosen strategy. It also discusses the responsibilities of personnel in strategy implementation, the resources needed, and the contribution of SMART objectives. The report concludes by highlighting the importance of strategic planning in achieving business objectives.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Strategic position of a firm by carry out organisational audit..........................................1
2.2 Environmental audit.........................................................................................................2
2.3 Importance of stakeholder analysis when formulating business strategy........................3
2.4 New strategy for the enterprise.........................................................................................4
TASK 3............................................................................................................................................4
3.1 Appropriateness of alternative strategy............................................................................4
3.2 Justification of strategy.....................................................................................................5
TASK 4............................................................................................................................................6
4.1 Responsibilities of personnel included in strategy implementation.................................6
4.2 Resources required for implementing a new strategy......................................................6
4.3 Contribution of SMART objectives in strategy implementation.....................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy is a techniques or step by step process used by business enterprises for
achieving their both short and long term goals. One of the main advantage of using an effective
business strategy is that it helps in maximum utilise all the resources of business and at the same
time enhance the productivity of workers. It provide guide to business managers while setting the
objectives and also provide support for getting competitive advantage. Business strategy guide
manager in evaluating all the factors exist in the business environment as activities of business
get affected by these factors (Astrachan, 2010). It helps in making the performance of business
more effective. According to the case study give, Jack & Jones, one of the biggest manufacture
of automobile is taken under this report for study. Firm make quality products and serve it in
more than 110 countries. How strategic planning and other plans of business get affected by the
vision, mission, and other factors all is detailed under this report. Various factors which should
be consider by a manager during the formulation of strategic plans is mentioned under this.
Along with this, relevance of stakeholder analysis and roles or responsibilities of various
employees which included in the process of strategy implementation all is detailed under this
essay.
TASK 1
Covered in PPT
TASK 2
2.1 Strategic position of a firm by carry out organisational audit
Process of adding values to all activities of enterprise and improve the output of various
operation by evaluating is known as the process of organisational audit. This process helps in
identifying the effective skills of organisation including infrastructure, human resources and at
the same time guide manager in making appropriate strategies for achieving the end results.
SWOT analysis can be used by the organisation for this as it is very effective and assist manager
in knowing the strengths, weakness, opportunities and threats of the firm (Elliot, 2011). Further
SWOT of Volkswagen can be better understood by the following points:
Strengths: Special characteristics and skills of an enterprise which help firm in producing quality
products and capture a larger market share is known as the strengths of a firm. Following are the
main strengths of Volkswagen:
 Firm produce and deliver variety of quality products for large number of its customers.
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 Firm use an ethical and effective method for manufacturing the product all this helps in
achieving consistency in all operations.
 Activities of firms are expanded in number of areas.
 Strong brand image is one of the biggest strength of Volkswagen, which increase the sale
of firm's products.
 Innovative and high quality products of the firm attract large number of customers
towards it.
 Ethical and standard way of producing the products increase the effectiveness of all
business operations and at the same time remove the grounds of arising conflicts at
workplace.
 Advanced and high tech, research and development department of the firm guide the
enterprise in identifying changing needs and wants of customers and serve them in a
better way.
Weakness: main weakness of Volkswagen can be understood by the following points:
 Increasing number of competitors is one of the weakness of firm which largely affect its
activities.
 Competency and skills of workers are not much effective and this affect the quality of
final products.
Opportunities:
 Increasing scope and trend of more technological products give opportunity to the firm to
expand its activities in various areas.
 Changing needs and wants of the firm provide opportunity to the firm to add special
features in the product for satisfying their needs and wants.
Threats:
 Increasing the number of its rivals is one of the threat for the company.
 Various rules and procedure set by the government for making the product creates hurdle
in the execution of firm's operations.
2.2 Environmental audit
Identification of various elements exist in the business environment and its effect on the
various activities of business is known as environmental audit. Various factors and change take
place in these factors largely affect the operations of firm. It is very important for an enterprise to
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do this analysis as it assist top managers in formulate and develop effective strategic plans
(Hahn, Kolk and Winn, 2010). Further PESTLE analysis can be used by the firm to identify the
factors and its effect on the business activities. PESTLE of Volkswagen can be understood by the
following points:
 Political factors: At present firm is operating in large number of areas and due to this
expansion firm is facing a lot of political issues. Government of every country set its own
rules and regulations and every firm is liable to follow that for operating there. Various
standards and rules set by the government affect the activities of firm. So it is very
essential for the firm to first evaluate the political factors and its impact on the business.
 Economic factors: Rate of inflation and deflation exist in the market, wage rate interest
rate all comes under the economic factor. This also affect the activities of a firm for
example if interest rate of loan will decrease then it will be easy for the firm to expand its
activities in new and different areas and opposite will be happen in the other situation.
 Social factors: Trends sexist in the market and effect of these trends on the purchasing
process is come under the social factors. Increasings use of technological products
increase the sale of various products of Volkswagen.
 Technological factors: Technology exist in the market come under this, for achieving
success it is very necessary for a firm to adopt the updated technology for making the
products.
 Legal factors: Every country has its own rules and regulations which affect the various
activities of a business. It is very necessary for the Volkswagen to correct its mistake of
Co2 emission.
 Environmental factors: For betterment of environment it is necessary for Volkswagen to
make environmental friendly products. For this firm should use quality raw material.
2.3 Importance of stakeholder analysis when formulating business strategy
Volkswagen is one of the biggest manufactures of automotive products and firm produce
and offer number of variety products to its large number of customers. Large number of workers
are there which work in the firm in same direction for achievement of goals in a better way.
Stakeholders are that individual or groups which largely contribute in the success of a firm by
providing support facilities including funds, consultancy and many other (Haley, Haley and Tan,
2011). Analysis of stakeholders is one of the important for every business because it guide top
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managers in taking effective business decision and at the same time guide in formulating
policies. Evaluation of stakeholder analysis help the manager in knowing their contribution in
the success of firm. Support of stakeholders provide support to enterprise to better execute all the
activities and at the same time help organisation in adding features in its products.
Stakeholder analysis provide opportunity to the manager of firm in identifying their
various needs and wants and by going manager of Volkswagen can give direction to all
operations in order to gain their trust and confidence. All this help firm in capture a larger market
share.
2.4 New strategy for the enterprise
In UK it is very necessary for every automobile company to produce environment
friendly cars due to increasing amount of contamination in both air and water. Firms are
restricted to make cars producing pollution. This is done to save the air and water from any
contamination. Volkswagen made these type of cars but after this fact reveal firm do a large
number of changes in its product and change almost every feature of car. Firm start supporting
the development of electronic based cars. This innovative and effective idea provide opportunity
to the firm to capture a larger market share and at the same time make environment friendly cars.
It is one of the most effective solution of the problem. Volkswagen can deliver quality cars to its
customers by adopting this approach (Li and Tan, 2013).
There are various strategy in market but this organization uses a growth strategy for
development of business in an effective manner. the growth strategy is helpful enhancing
business at large scale. In context to this strategy, cited company can promote its current services
and goods in new market with providing some additional advantages. With the help of growth
strategy, market share of firm will be enhanced in a proper manner.
TASK 3
3.1 Appropriateness of alternative strategy
Number of alternative strategies are there which can be used by the Volkswagen for
capturing a larger market share or to expand its business activities. Following are the main
strategies which can be used by company:
 Substantive growth: As per this strategy, firm can capture a larger market share by doing
integration with other firm either horizontally or vertically. Enterprise merge or acquire
another organisation and than undertake a new venture. One of the main advantage of this
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is that it expand the activities and operation of business in new areas. As per the given
case study, Volkswagen want to expand its activities and wants to capture a larger market
share by introducing the concept of electronic cars.
 Limited growth: Number of tactics are included in this for achieving the set objective.
Product development, market penetration, innovation and many other. Innovation can be
adopted by Volkswagen as company is introducing the new concept of electronic car. For
getting support and to increase the amount of its profits joint venture can be adopted by
the company (Melville, 2010). Under this two or more than two enterprises starts
working together and share all their resources and employees for attainment of set results.
 Retrenchment: As per this strategy, enterprise is advisable to shut down or close their
venture which are not effective and does not produce any results for the firm. Withdrawal
by firm of all its producing units and products is the main concept of this. It helps firm in
saving down its cost. Further, firm can invest this amount in other in other profitable
projects for capturing a larger market share. Same can be done by the VW AG. Mainly
retrenchment is divided into three categories known as cost reduction, assets reduction
strategy and revenue generation.
As per the give case study, Volkswagen has adopt limited growth strategy as at prosent the firm
has done two joint ventures in china.
3.2 Justification of strategy
Due to facing critical issues and large number of business problem it is very necessary
and essential for the firm to choose and an effective strategy. It will be beneficial for the firm to
use better and quality engines for making the cars and at the same time company should focus on
the concept of electronic cars. Both UK and US are facing the environmental related issues and
problem like high pollution. Various legal authorities are still trying to investigate the method
which should be adopted by the firms. Government is evaluating the efficiency of cars and
measure hoe environmentally a car is.
For capturing a larger market share and to achieve success it is very essential for the
enterprise to follow all the rules made by the government. By this company can capture a larger
market share and at the same time can eliminate the various grounds of rising issue. Along with
this firm can achieve efficiency and can increase the effectiveness of is business operations doing
joint venture (Meskendahl, 2010).
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TASK 4
4.1 Responsibilities of personnel included in strategy implementation
Strategy implementation is the process of applying new process and methods in the
enterprise for making products. Main aim of this is to increase the positive image of firm and its
market share. During the process of strategy implementation employees and workers working in
the enterprise play an effective role. For getting better results it is very necessary that all activity
should be performed in the enterprise with efficiency. Support of workers help enterprise in
effectively implementing the strategy. It is very necessary for all the workers of Volkswagen to
perform all their duties in order to effective results. Further main roles and responsibilities of
personnel is stated below:
 Managers: Managers play an significant role in the growth of enterprise. These are the
one who make plans for the firms, collect all the resources required and along with this
do the staff function. Supervision of employees and various activities done by them all
this is done by the manager which contribute a lot in the effective implementation of
plan. Main responsibility of managers can be better understood by the following point
(Mithas and Lucas, 2010).
Manager identify the current trends and do the changes accordingly.
Use various type of incentives for motivating the workforce.
 Employees: Workers are those who work ion the methods introduce by the management.
Commitment and support of employees is very necessary as these are the one who make
final products for large number of customers. It is the responsibility of employees to
identify the purpose behind why management introduce some kind of change and should
support the same.
 Engineers: Individuals having expertise in the technical field is known as engineers. It is
the responsibility of theses kind of people to do the necessary changes in the technical
process so that firm can add specific features in its products and can deliver the same to
its customers (Montgomery, 2011).
4.2 Resources required for implementing a new strategy
Number of resources are required by a firm for successful implement all the changes and
any new strategy. Further main resources required by the firm for implementing the strategies
can be better understood by the following points:
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 Funds: Financial resources are one of the essential resource required for implementing
the strategy. For this Volkswagen can take loans from various parties like banks,
shareholders and others.
 Employees: Workers play an important role in every activity of enterprise. These are the
one who provide support to firm and help enterprise in achieving set objectives in an
effective way.
 Fixed resources: Large equipments, furniture, building all are required by the firm for
successfully implement the scheme.
4.3 Contribution of SMART objectives in strategy implementation
Strategy is a action plan which enable an organisation to attain their targets in a effective
manner. Adequate implementation of strategy is must for making the business operations
effective and increase the outcome. Hence, it is a duty of senior management to formulate
several number of action plan which aid them in making their operations effective. As for this a
major concept have to use by Volkswagen which is SMART targets. Theses 5 components are
helpful in implementing the strategy properly (Scholes, 2015). Hence, SMART targets for VK
have to formulate by senior authority for making their business successful and all of them are
stated as below: Specific:Target should be specific in nature and not get rigid. As this aid them in making
their work effective. All the roles and responsibilities are also described properly so
management can implement the strategy in an appropriate manner. Measurable: Target should have to be in numbers which get measure easily. As this
support in identify the success or failure of project adequately. Measurable factor help in
executing and guiding the employees to attain such target like increase in sales by 30%. Acceptable: All the targets should have to be acceptable in nature which lead to get frame
by considering all employees of a company. Moreover, objectives have to be in such
nature which do not impact on environment and society. All the stakeholders have to
accept the project which formulate decision makers. Relevant: Resources and objectives have to relate with each other. This support in
making the work effective and whole firm can work towards the right direction. As the
resources met objectives project get executed properly. Like increase in sales by 30%
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have to link with financial performance and current state of resources of a company
(Smith, Mills and Dion, 2012).
 Time bound: A limited time period have to get fixed by management so that employees
can contribute their more in attain such targets in signified time period.
All these points are helpful for VK in increasing their sales and making products quality more
appropriate. As they are already indulge in an environment polluted case which affect their
reputation very badly. Hence, for overcoming from this SMART targets are helpful.
CONCLUSION
From the given information it can be summarised that it is very necessary to do strategic
planning and make effective plans for a firm like Volkswagen. Various factors like
competencies, vision and mission of the firm largely affect the process of its strategic planning
so it is very necessary for the manager of Volkswagen to consider all the factors while making
various plans for the business. During the developing phase of strategic plans various techniques
are there which can be used by the firm. Along with this environmental audit of firm can be done
by the firm to give direction to its various activities. Further for increasing the quality of its
activities stakeholder analysis can also done by the firm. Various strategies are there which can
be used by the firm for getting effective results of whole activities. It is very necessary for all the
employees to fulfil there roles and responsibilities during the implementation of various
strategies.
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