Business Strategy Report: Organizational Audit of Volkswagen

This report provides a comprehensive analysis of Volkswagen's business strategy. It begins with an introduction to business strategy and its importance, then examines Volkswagen's organizational structure, strengths, weaknesses, opportunities, and threats using SWOT analysis. The report also conducts an environmental audit using the PESTLE framework, analyzing political, economic, social, technological, legal, and environmental factors impacting the company. Furthermore, it assesses the significance of stakeholder analysis in formulating new strategies, categorizing stakeholders and their influence. The report proposes market development and market penetration strategies, particularly focusing on the production of electric vehicles to address environmental concerns and market demands. The document also discusses the roles and responsibilities in strategy implementation, resource requirements, and the importance of SMART targets. The report concludes by summarizing the key findings and recommendations for Volkswagen's strategic planning and future growth.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Strategic positioning of Volkswagen by carrying out organisational audit..........................1
2.2 Environmental audit for Volkswagen...................................................................................2
2.3 Importance of stakeholder analysis when formulating new strategy....................................4
2.4 Strategy for Volkswagen.......................................................................................................5
TASK 3............................................................................................................................................5
3.1 Appropriateness of alternative strategy for enterprise..........................................................5
3.2 Justification of selected strategy...........................................................................................6
TASK 4............................................................................................................................................6
4.1 Roles and responsibilities of personnel charged with strategy implementation...................6
4.2 Analysis the resources required for implement a new strategy.............................................7
4.3 Contribution of SMART targets in achievement of strategy implementation......................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is known as a sequence of steps which an enterprise follow to achieve
its end goals and objectives. An effective business strategy is must for every company. Basically
it is a plan, decided by top managers of firm for enhance profits of business and performance of
employees (Alsudiri, Al-Karaghouli and Eldabi, 2013). Business strategy is an integral part of
every business as it help business in find new ways to complete business operations. Without
business strategy it become complex and difficult for enterprise to fight in market. For formulate
a effective strategy it is very essential for manager of firm to collect information about various
elements which affect business operations. Volkswagen, a biggest manufacturer of automobiles
based in UK is taken under this report for study. Various components such as vision, mission and
core competencies of business and how all these elements affect the strategic planning of an
enterprise is given under this report. Effectiveness of various techniques use for develop a
strategic plan and environmental audit of Volkswagen is also done in this report. Roles and
responsibilities of employees during implementation of business strategy and how SMART
objectives contribute in achieve end results and goals of company is all mentioned in this report.
TASK 1
Covered in PPT
TASK 2
2.1 Strategic positioning of Volkswagen by carrying out organisational audit
Process under which manager evaluate every business activity in order to achieve end
results and goals is known as organisational audit. Feature of this audit is that it provide an
opportunity to manager to collect huge amount of information about various business operations
(Azar,2011). There is a tool called SWOT analysis which can used by managers of Volkswagen
for carry out organisational audit.
Strengths: These are the competencies of enterprise which ensure effective execution of business
operations and also provide competitive advantage to company. This attract more number of
customers towards company's products and increase number of profits of company. Strengths of
Volkswagen includes the following:
 Brand portfolio of Volkswagen is one of the larger among all companies of automotive.
Firm sells its product under 12 various brands.
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 Due to various external pressures and in the wake of emission scandal, firm has introduce
a new strategy to introduce electric vehicles by 2025.
 Diversification strategy of Volkswagen is very effective and this increase the revenue of
firm. Wide portfolio of company allows its to target number of customers form various
segments and satisfy their needs. Synergy between various brand is one of the biggest strength of Volkswagen. Different
brand of Volkswagen including SEAT, Bugatti, Lamborghini and many more help firm
to access various markets and increase sales of company.
Weakness: Negativity publicity weakens the brand value of Volkswagen. Firm was found guilty
in many countries which results in fined the firm.
 Vehicles of Volkswagen have highest call rate in US market among all automakers. High
recall rate results in additional costs and disappointed its customers. Better quality
control must be implement by firm t minimise this. Low market hare in automotive market in US.
Opportunities: Fuel prices are expected to be rise in future and this rise in proce provide benefit
to those firms which have strong SUVs. Volkswagen didn't invest into line of trucks so firm
could introduce electric vehicle.
 Volkswagen can acquire skills and abilities with help of acquisitions. In order to develop
a new plan firm will have to develop new skills. Image of firm has been damaged by its emissions scandal. If firm to regain all its
customers and stakeholder firm could increase its efforts in sustainability.
Threats: Intense competition from various automotive firms is one of the biggest threat for
Volkswagen. Various companies such as Tesla make it hard for Volkswagen to compete in the
segment of electric segment.
 Increased regulation of government is another threat for Volkswagen. Various
governments are committed to reduce greenhouse gas and due to this there is always a
risk that this increase production cost.
2.2 Environmental audit for Volkswagen
Environmental audit is a procedure in which manager of firm identify the elements exist
in environment and impact of those elements on business activities and outcomes. This audit
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help manager in formulate better plans for business. For this, PESTLE is a tool which can be
used by manager of Volkswagen. Political: Volkswagen has face number of political issues and difficulties in development
as the firm is operating in more than 150 countries. Due ton this, firm is facing various
situations in different countries. Political situation of various countries are not same and
this affect the process of strategy formulation of firm (Bucolo and Matthews, 2011). Car
industry is the one which is largely related with the policies made by government.
Further, financial sector and banking industry of a country also play a big role in sales of
cars as this affect the amount of loan and interest decided by government of country. In
this situation, the biggest challenge before Volkswagen is to understand various political
pressures. Economic: Automobile industry is one of the key industry as this contribute more in
national income of a country. Volkswagen contribute more in national income of
countries in which it is operating. This is the main reason number of countries encourage
development of automobile industry and this is a advantage for Volkswagen. Social: Automobile industry is the one which get affects by the society in which it
operates as this play a big role in development of industry. Firm give employment to the
local people of society. This is the one which increase the level of society by provide
direct or indirect employment to number of people. Technological: Technology is one of the factor which largely affects the success and
growth of a car manufacturing firm (Bucolo and Matthews, 2011). Volkswagen is known
as the firm which use best technology for manufacturing of car and this is the one factor
which make the firm able to makes cars like Bentley and Audi. Legal: Automobile industry is the one which also needs to follow the legal rules and in
this situation, it s biggest challenge for Volkswagen as firm is operating in 153
countries. Firm need to give consideration on various laws such as competition law,
Labour law, taxation law and consumer protection law.
 Environmental: Manufacturing of care is a process which affect the environment and
this impact the development of car industry. A care uses diesel and petrol as a fuel which
affect the environment and make it polluted. There is a need for Volkswagen to take care
of environment in all its plants.
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2.3 Importance of stakeholder analysis when formulating new strategy
Stakeholders play a big role in success of every enterprise and these are the one which
largely affect the business strategy. These can be the internal and external workers, customers,
union, government etc. Before assess the importance of stakeholders towards the enterprise
mapping of stakeholders need to be apply in order to determine the level of power and influence.
Basically stakeholder mapping is divided into four parts.
Customers of Volkswagen can be categorised where they have less interest with high
power (Butler, 2012). Customers are one the one who generate profits for enterprise and it is
very essential for enterprise to do al efforts to better understand their needs. Satisfy the needs of
customers value proposition is the strategy which can be use by Volkswagen.
Other section is the one which represent the stakeholders with high power and high level
of interest. Shareholders, financial institutions and investors of company come under this
category. These are the one who invest their funds in expectation of high return. Volkswagen ned
to manage them in an effective manner by share all information. Good relation with these type of
stakeholders provide various long term advantages to company.
Another section of stakeholders mapping is the one where interest level is high with low
amount of power. Employees of Volkswagen come in this category as these are the one who
have high interest in business because of incentives, growth opportunities and salary.
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Last section is the one in which stakeholders show low level of interest and also have less
power. These type of stakeholder only require to be monitor on timely basis.
Analysis can be done with help of stakeholder analysis: Level of power and influence can
be determine by management in order to design the strategy for business. Expectation of
employees can be fulfilled by firm if managers inform them about the variations and this can be
possible after address the importance of stakeholders.
2.4 Strategy for Volkswagen
Mainly, strategy is the roadmap that increase effectiveness of various business activities
so enterprise can reach to its desired goals and objectives. It is very important that business
strategy should be align with its main objectives. New strategy for Volkswagen will be market
development and market penetration. Market penetration is the one which increase market share
of firm by do some variations in pricing strategy of firm (Dandira, 2011). Strategy of market
development will assist enterprise in serve new and more number of customers. For example by
produce electric cars form can attract more number of customers and this will enhance profits of
enterprise. Government of United Kingdom also formulate various laws and regulations so firm
should produce quality and environment friendly products for its customers. Vehicles which
produce high amount of pollution are restricted in UK due to increase amount of contamination
in both air and water. So in this case, Volkswagen should go for production of electronic cars.
TASK 3
3.1 Appropriateness of alternative strategy for enterprise
It is very essential for business to select a appropriate strategy in order to achieve end
goals and objectives. Appropriateness of alternative strategy can be understood by following: Market entry: This strategy determine a new market for business. In this, market entry of
firm is based on factors such as government taxation, competition, tastes and preferences
of customers and many more. Substantive growth: This strategy help enterprise in maintain and increase its position in
market. This is divided into vertical and horizontal integration. In horizontal integration
two or more than two companies merged with each other and in vertical integration
company become the supplier or distributor of another company and move into the
similar market.
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 Limited growth strategy: This strategy restricts the growth of enterprise in some areas
and give focus to expand business activities in other business areas. Sometimes
enterprises follow this strategy for develop the business.
 Retrenchment: This strategy come into force in situation of recession. It occur when
enterprise faces number of failures and require to cut down their prices to maintain its
position in market (Elhamma and Zhang, 2013). Main feature of this strategy is that it
help in save huge amount of funds of firm and provide an opportunity to managers to
invest that fund in other profitable ventures.
3.2 Justification of selected strategy
Volkswagen faced various issues due to production of vehicles producing high amount of
pollution in air and water and this enhance the complexity of business. This decrease both market
share and profits of business. To decrease this negative impact and not to face the same kind of
situation in future it is very essential for firm to choose a best strategy. This issues can be solved
by undertake the production of electronic cars. Due to high amount of pollution in air and water
firm is already facing number of issues. Firm require to upgrade the technology and skills of its
employees as this will results in sooth execution of business activities. Substantive growth
strategy is the one which will be useful for Volkswagen as this will enhance skills and resources
of enterprise and then firm can offer better quality products to its customers.
TASK 4
4.1 Roles and responsibilities of personnel charged with strategy implementation
Every enterprise require an effective team to execute business operations. This consists
boards of directors, managers, planning staff and many more. Skills and abilities of staff
members help enterprise during process of strategic planning. Roles and responsibilities of
personnel working in enterprise at time of strategy implementation can be better understood by
following points: Role of top management: Top managers of enterprise are the one who remain
responsible to formulate the draft of strategic plan. After that managers of top level
discuss with each other for get its approval (Ferreira and et. al., 2011). Financial
conditions of firm will be verified after formulation of plan. After that, all top members
conduct a meeting in which all information of plan is communicated to managers of
middle level. All goals and targets is shared in the meeting by top managers.
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 Role of middle level managers: Middle level management of firm includes the
department heads which communicate all objectives and targets to subordinates and
employees of department (Galpin and Lee Whittington, 2012). All business objectives are
divided into various departmental targets as this support the strategic plan of enterprise.
Middle level managers provide their guidance to front line mangers to complete the set
objectives. All collected feedback and information is communicated to top level
managers. Role of front line managers: These are known as team leaders who assign roles and
responsibilities to members of team. Team members and their action get measure and
control by front line managers. Issues faced by them directly communicated to middle
level managers.
 Role of workers: Employees are the one who achieve the set targets based on middle
level management.
4.2 Analysis the resources required for implement a new strategy
Resource allocation is the process which is manage by managers in order to achieve
effective execution of strategy (García‐Rodríguez and et. al., 2013). Activity of resource
allocation is depend on the demand of company's product in market. Adequate allocation of
resources is very essential for achieve effective implementation of strategy. Resources require to
implement the strategy differs from enterprise to enterprise. For ensure effective implementation
of strategy it is very essential to analyse the following requirements: Budgetary resources: It is first requirement to formulate a budget by consider the market
return and the funds required to implement the strategy. For this, it is very essential hat
analysis should be done in a correct manner for identify the working capital. Estimation
is the anticipation of revenues which must be consider by firm in order to achieve the set
objectives and targets. Personnel resources: Human resources are the one which have some kind of resources
as other resources. These are require to improve the quality of final products and it is
very essential to provide them training. Requirement of human resource can be
determine by consider the human resource planning.
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 Physical resources: This consists purchase of machineries and large equipments for
manufacturing process which will support the strategic planning of Volkswagen. New
plans and machineries will require to produce the electronic cars.
 Technology: Technology is one of the key factor for Volkswagen as firm will produce
cars by use new technology.
4.3 Contribution of SMART targets in achievement of strategy implementation
Volkswagen is one of the popular and effective brand in automobile industry. In order to
generate more number of profits it is very essential for enterprise to formulate a better strategy.
As firm is operating in various countries, it is very essential for firm to manage the staff and its
performance (Goll and Rasheed, 2011). Firm require to introduce change in its performance
policy in order to attain its goals. Enterprise need to develop goals ad use of SMART targets in
order to attain them. SMART stands for specific, measurable, attainable, relevant and time
bound. Specific: One of the main feature of setting a specific goals is that it help organisations in
make more clear decisions. This improve the communication among staff members and
ensure optimum utilisation of all resources of business. Measurable: This element help enterprise measure the success of goal set by firm. With
this, members of team can analyse whether they are going in a right direction or not. Attainable: This element help enterprise in set attainable gaols as per the resources and
skills of employees. For this expectation of customers need to be analyse by firm. Relevant: This element indicate that set targets and objective of business must be relevant
or it must be that it contribute achievement of final goals of firm.
 Time bound: It helps enterprise to decide starting and ending point of a activity. This put
a time limit on achievement of final goal of firm.
CONCLUSION
From the above information, it can be concluded that it is very essential for every
business enterprise to formulate a effective business strategy for various operations as this help
in achieve end goal of company in an effective way. One of the main feature of business strategy
is that it ensure optimum utilisation of all business resources and make enterprise able to offer
quality products to its customers at affordable prices. Before formulate a plan and strategy for
business it is very unessential that various elements such as vision, mission, goals and objectives
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of company must be consider by manager. This guide manager and ensure formulate of an
effective strategy for business. Further, concept of SMART objectives must be adopt by firm as
this manager in calculate the growth of business operations. Other element which must be
consider by manager before formulate a strategic plan is needs and expectation of company's
stakeholders.
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