Business Strategy: Volkswagen Strategic Analysis Report

This report provides a comprehensive analysis of Volkswagen's business strategy, covering various aspects of strategic planning and implementation. It begins with an introduction to business strategy, emphasizing its importance in achieving organizational goals. Task 1 explores the role of organizational vision, mission, goals, and objectives in strategic planning, along with factors to consider and methods for developing strategic business plans, including BCG and Ansoff matrices. Task 2 delves into organizational and environmental audits using SWOT and PESTLE analyses to evaluate Volkswagen's strategic position. It also discusses the importance of stakeholders and developing alternate growth strategies. Task 3 focuses on evaluating the appropriateness of alternate strategies and justifying specific choices. Finally, Task 4 addresses the responsibilities in strategic implementation, resource needs, and the use of SMART goals. The report concludes with a summary of key findings and recommendations for Volkswagen's future strategic planning.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Organisational vision, mission, goals and objectives helps in strategic planning............1
1.2 Factors which should be considered while making strategic plans..................................2
1.3 Methods to develop strategic business plans....................................................................3
TASK 2............................................................................................................................................4
2.1 Carrying out organisation audit to evaluate strategic position of firm.............................4
2.2 Environmental audit for organisation...............................................................................5
2.3 Importance of stakeholders in developing new strategies for organisational growth......7
2.4 Developing alternate strategies for the growth of company.............................................8
TASK 3..........................................................................................................................................11
3.1 Evaluating appropriateness of alternate strategies.........................................................11
3.2 Justifying the selection of specific strategies for future business plans.........................11
TASK 4..........................................................................................................................................12
4.1 Responsibilities of personnel who are engaged in strategic implementation.................12
4.2 Evaluating the need of resources for effective implementation of new strategies.........12
4.3 Importance of SMART goals in achieving objectives of strategic implementation in firm
..............................................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business strategy is beneficial in achieving the targets of firm effectively as this provides
and direction of growth to the firm and defined the plans by evaluating the available
opportunities in marketplace and assessing the external environment too (Firnkorn and Müller,
2012). Volkswagen is an automotive company who is engaged in developing various corporate
strategy to expands the business in international market. The strategies largely contributes in
achieving the SMART targets. In this particular report the various approaches to the strategic
implementation is discussed along with defining various expansion strategy for firm VW AG
following the Ansoff matrix and Porter's five forces model.
TASK 1
1.1 Organisational vision, mission, goals and objectives helps in strategic planning
Before setting business goals and objectives it is highly important for managers to
identify current needs and demands of market. On the basis of market trends, company should
prioritise their aims and objectives. By following this procedure, Azimo can accomplish its
major goals and also can satisfy market demands. For better growth and development
organization should change and update its business strategies. Modification in strategic plans can
lead company to high level of success. Needs and demands of market always change so it is
responsibility of managers to cope up with those modifications otherwise they can not survive in
marketplace for long time period. In simple words, it is highly important for organisations to
make their business decisions as per the environment. By doing this, enterprise can enhance its
organizational growth and development. While making strategies managers of Azimo should
consider its organizational goals, objectives, mission, vision and core competencies because
without considering them they can not make effective strategic plans.
Mission: It is known as short term goals of company. Azimo provides various services
through which people can transfer their money online and in any country. It send money by
internet connected devices. It operates its business in approx 190 countries. The main mission of
this company is to create values for its potential clients by providing them money transfer
services.
Vision: It is considered as long term goals of organization. The Azimo's vision is to
satisfy its employees as well as its customers by providing them effective products or services. It
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always change its organizational structure and culture according to the market needs and
demands. It always update and modify its strategies so that it can provide better services to its
customers as per their demands.
Objectives: Azimo is established to gain financial profit. Apart form this, it have some
other objectives such as high productivity, employee satisfaction, customer gratification, worker
retention and organizational growth. This organization wants to transfer international money
faster, cheaper and in simple way. This company always focus on technology up-gradation
because without this it can not transfer money online.
Goals: This organization was launched in 2012 in recent years it have reached to high
level of success because of its effective services. It present time, its main goal is to expand its
business in all over the world so that it can cover large market share. Also, it wants to provide
high satisfaction to its customers so that it can retain them for long time period.
Core competencies: These are the strengths of organization. In simple words, they are
considered as strategic advantages of company which lead it to high level of growth and
development. Azimo have deeply research the needs and requirements of customers so that it can
provide them effective services. The main competencies of this company are that. it charges very
less amount in exchange of its services, it always change its strategies as per the business
environment and it also helps in economic development.
1.2 Factors which should be considered while making strategic plans
Organisational growth and development totally depends upon the strategies of company.
If organization will have effective strategic plans then their chances of success will also be high.
In simple words, strategic planning of organization can provide huge number of benefits in term
of financial profit, high productivity and Large market share. There are many factors which can
affect business strategies and these are follows as under:
Innovation: In modern world, all organizations are attracting towards new technology so
that they can innovate their products and services in better way. Innovation has become integral
part of every business enterprise because by this company can lead to next level of success and
also can get competitive advantage. Azimo transfer online money in different countries of
world. As its business depends upon technology so it should consider technical forces while
making strategic plans.
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Management: Without effective management system, cited company can not make and
implement effective strategies within work place because merchandising is only department
which can effectively implement strategic plans in company.
Apart from this, communication level and stakeholders of organisation are biggest factors which
can affect business strategies. Investor, customers and employees are the main person who is
largely effected by new strategic plans so managers should keep in mind their interest before
formulating new strategies. Furthermore, strategic plans of company is that essential part which
can enhance organizational growth as well as development in market place. Every successful
organisation should give core attention to their business strategies and those factors which can
affect them.
1.3 Methods to develop strategic business plans
There two main methods, to develop strategic business plans and these are follows as
under:
BCG growth sharing matrix: With the help of this technique Azimo can make long term
strategic plans which can lead this company to high level of growth. This concept is divided into
four areas which are follows as under:
Dogs: This quadrant represents low market and growth rate. In simple words, company
which follow this concept does not increase their financial profit. It is that situation in which
money of company get stuck.
Question mark: In this, enterprise get good financial profit but it can not increase its
market shares. Also this type of growth requires high investment.
Stars: By following this method, Azimo can get high success and growth in market place.
It is most convenient technique for growth as compare to other methods.
Cash cows: It influence positive impact on organization. It focus on high organizational
growth.
Ansoff's matrix: With the help of this concept, Azimo can innovate their existing
concepts and services. Also, it helps in getting more financial results. It also dived into four parts
which are follows as under:
Market penetration: In business enterprise, decrease its product's price so that it can
attract a huge number of customers.
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Market development: In this, Azimo can expand its business in all over the world. It can
establish its new branches in highly popular areas of world by which it can increase
organizational growth and development.
Diversification: By following this method, cited company can diversify its existing
services. By providing some new services it can enhance its business growth.
Product/service development: For better growth and development, organization should
increase quality of existing goods and services. By doing this, it can accomplish its
organizational gaols and objectives in most effective manner.
TASK 2
2.1 Carrying out organisation audit to evaluate strategic position of firm
The internal audit is a useful approach to identify and evaluate the current strategic
position of firm in marketplace. The planning manager of Volkswagen in New Phoenix can carry
out SWOT analysis of firm to evaluate and interpret the efficiently of internal environment of
organisation (Fox, 2012). This is helpful in analysing the strength of firm and available
opportunities for future growth over the various threat of development in current marketplace.
The SWOT analysis of VW AG is carried out in order to develop organisational internal auditing
effectively which is described below.
Strengths: This can be defined as various competencies and capabilities of internal
working environment of firm which is helpful in achieving the targets of VW and helps in
gaining competitive advantage in marketplace. Some of the competencies of Volkswagen are as
follows:
 Volkswagen is a well-recognised brand in the sector of automotive industry in market.
 Companies are having large number of manufacturing plants located in different parts of
the world.
 In order to reach to customers of large profitable markets of world VW AG is working in
partnership with the companies of China like Shanghai Volkswagen and FAW
Volkswagen.
Weaknesses: These are the some aspects in which the business grim are lagging behind
which negatively effects the internal functioning of organisation to large extent. Some of the
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weaknesses of the VW are defined below on which the strategic planner are working to
overcome these weaknesses.
 This is an imperfection of VW that it is incapable in achieving high market share because
of presence of high level of competition in respective business segment.
 VW brand image is affected by emission scandal to large extent (Galpin and Lee
Whittington, 2012).
Opportunities: These are the various possibilities of growth available in external market
through which organisation can fight competition effectively and contribute in higher
profitability of firm which are described as follows:
 Improving the relations of VW with other car manufacturer business firm can open up the
gates of future growth by sharing of new ideas and technologies with each other.
 Expansion of business activities to a newer and profitable market which can be other
growth possibilities accessible to Volkswagen.
Threats: These are some of the aspects which may be present in the external working
environment of firm and negatively effects the functioning of organisation. Some of threat
present to the development of Volkswagen in marketplace are as follows:
 The innovative products of competitors or substitute to the products of Volkswagen can
be threat for the implementation of strategies to large extent.
 Increasing fuel prices in the international marketplace can develop situation of financial
and economic crisis for the growth of automotive business sector and leads to decrease in
sales of cars in marketplace.
2.2 Environmental audit for organisation
External environment of a business organisation can be divided in two parts that is micro
and macro surrounding of organisation. Micro circumference is controllable by the activities of
firm to some extent which involves the competitors, suppliers and customer influencing
strategies of firm (Gebauer and et. al., 2010). While the external macro environment of
Volkswagen in uncontrollable which involves the political, social, environmental surrounding.
The environmental audit of VW AG can be beneficial in auditing the external surrounding of
firm in order to evaluate the position of business entity in external marketplace. PESTLE
analysis of is developed in order to carry out environmental audit of VW which is discussed as
follows:
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Political: The political environment comprises of various trade barriers, taxation policies
and exchange rates which largely hampers functioning of a business firm. VW AG is dealing in
about 150 countries worldwide with having different political working environment and
maintaining a diverse type is political relation between countries which may affect the
functioning firm (Granados and Gupta, 2013).
Economical: The economic condition of a country can be defined by the employment
rate, net income and the net profit value of the business firm working the commercial
environment of a nation. The Volkswagen is an automotive company is largely contributing in
growth of economy of nation. The economic crisis may also negatively affects the purchasing
power of customers which ultimately influence the working of VW AG.
Sociological: The perception and mind set of society largely contributing in framing the
sociological environment. The cars are considered as a luxurious good and also reflects the living
standards of individual in society. So, Volkswagen is engaged in uplifting the status quotient of
their customers from their luxurious services of cars.
Technological: The technology contributes to large extent in growth of this particular
segment of business. As technological advancement leads to new innovative design which cost
efficient as well as the providing satisfactory princesses to the customers. Volkswagen is
working with upgraded technology in their operations as well as automotive vehicles design to
gain competitive advantage in marketplace because of innovative car designs.
Legal: The legal framework largely effects the internal functioning of any business. The
car companies are also affected by the legal system of countries in which they are dealing
(Helms and Whitesell, 2013). As there may be many legal complications arises in the firm
operations because of their products deigns, organisation operational activities, sales of products
which have to be deal with the provisions of laws in commercial environment. Like of instance
in order to reduce pollution the government is introducing various laws to protect natural
environment and focusing on upgrading the engine design to reduce emission of polluting gases
in environment.
Environmental: Automotive vehicles runs with utilisation of fuels which emits polluting
gases in environment and largely affects the environmental condition. This also leads to
increased global warming and also negatively affects the human health. In order to react to
environmental aspect of the business surrounding the VW AG have to implement various
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strategies in designing cars and engine to develop fuel efficient and less environment polluting
cars in market (Laczniak and Klein, 2010).
2.3 Importance of stakeholders in developing new strategies for organisational growth
The stakeholders plays an important role in defining and implementing the newer
strategies of development for the firm. In order to work with the expectations of the stakeholders
of VWAG the company have to map out the powers and instead of various involving people who
take part in decision making process of firm. Mendelow matrix describes about the Stakeholders
mapping which helps in evaluating the significance of various personal in strategic legitimisation
by business firm. As per the Mendelow matrix this divides the stakeholders into 4 segment i.e.
Keep satisfied, Managed closely, Monitor and Keep informed depending upon their level of
interest and level of power.
Keep satisfied- This particular group of stakeholders of the company are having large
amount of powers and authorities to regulate the functioning of firm. While these are having less
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Illustration 1: Mendelow Matrix
(Source 1: Stakeholder Analysis Template, 2017)

interests in the profitability of firm and strategic implementation by the business entities.
Government bodies, legal authorities are involving parties who comes under this segments as per
the stakeholders mapping in Mendelow Matrix. In order to be functionality profitability in
marketplaces the Volkswagen have to keep satisfy these people.
Managed closely- These are the people who are having large interests in the products of
company and plays an important role in defining the strategies for organisation. These
stakeholders are also having great powers to regulate the functioning of a firm (Li-Hua and Lu,
2013). So in order to react positively towards the expectation of this segment of people the
Volkswagen have to manage strategic plan and their needs closely and responsibly. This groups
of stakeholders involves investors and customers who are to be managed closely as per their
requirements and needs from VW AG Cars.
Monitor- This are the groups who are having lower level of powers and interest too in
developing strategies for the business growth. So, the Volkswagen needs not to more concentrate
over these stakeholders while developing any strategic plan.
Keep informed- While this segments of stakeholders comprises of employees, suppliers,
business partners lower powers but high amount of interest in business activities and high
amount of involvement in business operation. So the Volkswagen should communicate and
inform about the new strategies to these stakeholders in order to work efficiently in automotive
marketplace (Madill and Neilson, 2010).
These are the major stakeholders of Volkswagen and their significance within
organisation is stated as under: -
Stakeholders Main interest Power and influence
Shareholders Profit growth, share prices
growth and dividends
Election of directors
Bank and other legends Interest and principle to be
repaid, maintain credit rating
Can force loan covenants, can
withdraw banking facilities
Directors and other
managers
Salary, share options, job
satisfaction, status
Make decision, have detailed
information
Employees Salaries, wages, job satisfaction, Staff turnover, service quality,
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job satisfaction and motivation industrial action
Suppliers Long term contracts, prompt
payment, growth of purchasing.
Pricing, quality, product
availability.
Customers Value for money, reliable quality,
customer service.
Revenue/repeat business word of
mouth recommendation
Community Environment, local jobs, local
impact
Indirect via local planning and
opinion leaders
Government Operate legally, tax receipts Regulation, taxation, planning.
Importance of stakeholders: - Stakeholders are the individuals who are affected by or can
influence a company or product throughout its life. These individuals can be customers, clients,
suppliers, investors and employees. The roles of stakeholders differ between businesses,
dependent on the rules and responsibilities laid out at the founding of your company or as your
business evolved over the years. Stakeholders, including investors, board members and
employees, all share a common goal of wanting the best for the business or organization they
represent. Each stakeholder may have his own individual or specialized venue for helping to
communicate your corporate messages. For example, volunteer board members of a non-profit
organization may each work for a different company and can spread the message through
corporate intranet and newsletters.
2.4 Developing alternate strategies for the growth of company
The new strategies helps in growing with faster rate in the highly competitive
marketplace. As this provides an defined direction to the working operations of business firm
with defined goals and objectives. The Porter's generic strategies and the Strategies defined in
Ansoff matrix can be implemented in the New Phoenix by manager of Volkswagen AG to
growth the business in marketplace. These model describes various strategies to expand business
which are defied as below.
Ansoff Matrix defines the various strategies that can be implemented by the VW AG for
the growth of organisation depending upon the firm competencies and the opportunities available
in external market. The organisation can go for Market penetration which focuses on increasing
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the sales of existing products of company in present assessing market by developing new
promotional strategies. While Product development can be next strategy that can be used by the
planner in New phoenix by introducing new product in the existing marketplace by developing
new innovation in the deigns. Market development this particular strategies involves targeting
newer market with helps of existing products to capture the shares of new market (You Need an
Innovation Strategy, 2015). Diversification while this is the strategy which will be beneficial for
the growth of Volkswagen as this involves introduction of new products in totally new
marketplace, although this strategies is having higher risk but having great opportunity to be
pioneer in marketplace. The Volkswagen is planning for the diversification strategies to
implement in automotive market. This strategy will be advantageous for the firm as this will
focus on introducing a new technologically upgraded car design in new market to capture higher
market shares.
Illustration 2: Ansoff Matrix
(Source 2: Ansoff Matrix, 2016)
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