Business Strategy Report: Analysis and New Plan for Volkswagen

This report provides a comprehensive analysis of Volkswagen's business strategy, addressing the challenges faced by the company, particularly in light of the environmental law violations. The report begins with an introduction to business strategy and its importance, followed by an organizational audit using SWOT analysis to assess Volkswagen's strengths, weaknesses, opportunities, and threats. An environmental audit, utilizing PESTLE analysis, examines the political, economic, social, technological, environmental, and legal factors impacting the company. The significance of stakeholder analysis is then discussed, emphasizing the need to satisfy various stakeholders. The report proposes a new plan of action for Volkswagen, including a limited development strategy, and explores modification and selection strategies. It suggests focusing on limited growth strategies, maintaining current capabilities, and addressing financial penalties. The analysis covers topics such as organizational audit, environmental audit, stakeholder analysis, new plan of action, modification of strategies, and selection strategy.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1, 1.2, & 1.3..............................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Organisational audit..............................................................................................................1
2.2 Environmental audit of Volkswagen.....................................................................................2
2.3 The importance of Stakeholder analysis in preparing strategies...........................................4
2.4 New plan of action for Volkswagen......................................................................................5
3.1 Modification of strategies in appropriate manner.................................................................5
3.2 Explain the selection strategy................................................................................................6
4.1 Roles and responsibilities of personnel in strategy implementation.....................................7
4.2 Requirement of resources for implementing the new strategy of Volkswagen....................8
4.3 SMART targets in business strategy.....................................................................................9
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is an action plan which assist in achieving different goals and
objectives in an effective manner. The role of managers is to controlling, planning, directing
different programmes and activities within an organisation. It help company in analysing
different departmental decisions that are taken to complete particular task at given time period. It
is important to ensure that all resources are directed towards same direction which assist in
achieving higher efficiency rate (Scholes, 2015). It aids in bringing organisational alignment in
business process. Business strategy is used as a tool for gaining competitive advantage over the
market forces. Volkswagen is the multinational car manufacturing company which is based on
United Kingdom. It is global product brand which provide best car model to their clients or
customers, but recently it has break environmental laws which can damaged its brand image in
the country. Now they need to develop new business strategies which will provide direction that
can be followed for accomplish growth while minimise resource activity. There are different
tools and techniques which are used in this report and they will also use that for registering
growth and development.
TASK 1
1.1, 1.2, & 1.3
Covered in PPT
TASK 2
2.1 Organisational audit
An organisation who recently involved in market has to analyse whole market and its
factors for achieving better market positions (SWOT Analysis. 2017). It is essential for the firm to
managing its own audit that will help in matching its strength with opportunity of market. If an
enterprise does undertake this activity than its operations might get constraint. It is important for
the company to know its strength, weakness, opportunities and threats which assist in dealing
with different market situations (Verbeke, 2013). Recently, Volkswagen face a situation in which
they has to pay huge amount to the US environmental commission. The firm need to conduct
organisational audit as to gain knowledge related to the variables present in market and increase
its own capabilities in effective manner. Volkswagen is the firm which is present in more than

100 countries and they provide manufacture facilities in 27 countries which are exist in every
continent (Peña and Villasalero, 2010). The company use swot analysis as a tool to conduct
analysis which are as under:
Strength  Effective and efficient manufacturing group
 The firm always innovate their products
 It has approx. 350000 employees
 Flexible product range
 Modify motor parts and features of cars
Weakness  Very limited market share of company
 Competition is too high in this sector
 Brand image is damaged due to scandals
Opportunities  Developing relationship with different manufacturing companies
 Firm can also expand their business in other areas
 Adopt new design and features
 Emerging economies present in higher return potential
Threats  Environment laws can change whole market of company
 Rising in cost of raw material
 Government restricts big company like Volkswagen as to protect
local manufacture in market
 Constantly changes in technologies are increasing cost of firm
2.2 Environmental audit of Volkswagen
There are various types of factors that surrounds Volkswagen and managers needs to
manage and control them in an effective manner. The external environment is very disruptive
and it required to controlled by organisation so that any change can not affect company ability
and they easily serve products in the market (Montgomery, 2011). Volkswagen manage various
functions in countries and also they faces more risk in these external environment factors. It has
to analyse them so it will assist in gaining knowledge and develop action plan to overcome
threats. The firm conduct PESTLE analysis to evaluate factors in more effective manner

(PESTLE Analysis. 2017). It help in protecting organisation from any harm. PESTLE of
Volkswagen:
Illustration 1: PESTLE Analysis, 2017
(Source: PESTLE Analysis, 2017)
 Political- Presently there are unstable environment factor in United Kingdom which
directly impact Volkswagen company. UK government plan to restrict of selling petrol
and diesel cars by 2040 which will affects company ability to serve market.
 Economic- Recession of 2008 is still affects the organisation resources in more efficient
manner. The firm need to pay huge penalty to US environmental agencies which can
affects their expansion process.
 Social- Globalisation and migration affects execution of social structure which is more
diverse in society (Campbell, Edgar and Stonehouse, 2011). This need to adopt new type
of demand that has to be satisfied by company.
 Technological- There is a continuous change in technologies which assist in updating
latest methods within an organisation. Rapid change are enhance the cost of company
which required to reduce cost by using innovative approaches.
 Environment- The current and future trends of environmental factors which minimise
manufacturing cost. The external and internal factors of environment are directly affects
the business operations of company.

 Legal- There are different changes in rules and regulations with change in government
rules and regulations and they need to be adopted by company (Gold, Seuring and Beske,
2010). Examples are potential changes in labour laws and employing personnel from EU
nations.
2.3 The importance of Stakeholder analysis in preparing strategies
Stakeholders are parties of company who invest amount in business and they provides
various types of funds and resources that assist in producing products or services. They requires
to be satisfied as to keep firm running and gain more profit in the market (Teece, 2010).
Stakeholder are the persons who are interested to invest their money in the business operations.
Volkswagen is blame for breaking rule of US environmental commission on them, so they need
to focus on fulfilling needs and demands of the customers in the market. They used by company
for understanding how it has to serve different types of parties in more effective manner:
KEEP SATISFIED
(Highly interested, maximum power)
All information necessary to be shared
constantly.
 Employee's
 Shareholders
MANAGE CLOSELY
(Lower interest, more power)
The important information has to be shared to
keep them satisfied.
 Suppliers
 Government
MONITOR
(more interest, less power)
The half yearly or annual reports are used as a
method of information.
 Customers
 Financiers
KEEP INFORMED
(less interested, less power)
Faster interference is not needed and only
essential data has to be shared.
 Local Community
Stakeholder analysis is very essential for Volkswagen firm (Acquaah, 2013). They are as
following:
 It also aids in revealing strategic planning as to encourage people who are working in
company.

 Managers use it for enabling organisation in aligning its resources and gaining
consistency.
 They assist organisation in gaining better market perceptive and position.
 It gets support from all parties which improves its productivity.
These are the importance in which stakeholders makes and analyse its importance (Astrachan,
2010). All the requirement are completed in a set period of time and this will help in evaluate
organisation goals and objectives.
2.4 New plan of action for Volkswagen
The cited company need to adopt new strategies which will assist in serving market in
efficient manner. It has to set their capabilities with requirement of market. Later undertaking
environmental analysis and organizational auditing, it is clear that company is facing many
difficulty that can cause it to lose it edge over other market forces. Volkswagen has to pay the
personalities that are levied by US environmental commission as to stay and function in USA
market (Meskendahl, 2010). That is why it necessary to adopt new plan of action that will enable
it in increasing better market position and will assist it in maintaining its current capabilities. It
has to adopt limited development strategy which will extent resource activity and maximise
productivity. It can form new joint ventures in African countries at present instead of investing
all resources to establish itself, this will be an efficient way of entering into new market.
Stated strategy has proved its worth in past as it assisted different other companies in
recovering and becoming market leader. The CEO of organisation has also mentioned that they
will be loss consumption while enacting their efficiency level. It can not stop major programmes
while cutting cost where this can keep on growing at higher speed. Manager of company used
Porter generic approach which is developed by four several segments. The firm is gaining cost
leadership while deciding itself in the market. Volkswagen tries to modify its manufacturing
process so it assist in increasing more income and earn more profitability.
3.1 Modification of strategies in appropriate manner
The alternation of company is depend upon its abilities as they adopt and use which type
of strategies. There are different action plans that have to used in past which assist in raising
effectiveness and efficiencies of the firm (Melville, 2010). The company need to modify their
strategies which assist in achieving target goals and objectives. Some alternative strategies
disable organisation in handling down various situations. They are describe as under:

 Sustainable growth strategy- It is one of the strategy which is used for addition market
effectively. This has two types of methods such as acquisition and merger. Company can
earn more share of market as it integrate with small firms which are helping in same
product line or get a supplier or organisation that can assist in increasing its capabilities
to perform.
 Entry in market- There are various types of methods that can be used by firm to entry in
the large marketplace with minimum cost. Firm tries to enter into new market with
innovative products that help in attracting customers. Volkswagen will be using strategic
alliances and direct approach to enter into new markets.
 Retrenchment- This is strategy will used by company and it is can not be operated in
any manner. It describes that weak firms have to repay all the debts and close down its
business operations (Chang and Chuang, 2011). It sale all assets and exit the market. It is
not suitable strategy for Volkswagen AG.
 Limited growth strategies- This is a strategy that has to be used by firm which does not
have more resources. Generally, it is used for organic growth which minimise
consumption of resources. It adopt a methods of joint venture where companies does not
have to spend huge amount but only give partial funding and other type of resources.
This is the suitable strategy which will used by Volkswagen as it insure that all the functions
keep running while cost of each activity is minimised.
3.2 Explain the selection strategy
Volkswagen required to focus on limiting its functions and activities that is not over
spending ad saving amount to pay back penalties (Liedtka, 2010). They will focusing on
increasing efficiency of the firm and also leaders has to keep current capabilities while slow to
earn more income. Some are certain things which will explain the selection strategies are as
under:
 Maintenance of present capabilities- This is very crucial for maintaining current
capabilities of organisation so that it can grow in future. Limited growth strategy will
help in maintaining existing abilities and also attain organic growth (Cinquini and
Tenucci, 2010). Firm required to maintain current abilities and capabilities which assist in
attaining growth and development.

 Hefty Penalties- There are various authority who have charge penalty on Volkswagen in
USA. The net amount is $19 billions. This amount can not pay by company at one time
but they request the commission to pay it in equal instalments over next 10-15 years.
Also, UK environmental agency is checking firms car pollution and investigate that they
did not broke rue of the country.
 Expansion into new markets- This is a strategy which will assist organisation in
entering into new market by using joint venture or strategic alliances as a tool. It has
settled two different project in china (Cooke and Saini, 2010). Volkswagen required to
expand their business operations in other locations in which they attracts new customers
towards the products or services.
The limited growth strategy allows firm in minimising various cost and give permission
to managers for rising production at the same time. Basically it help in keeping its capabilities
and enhance its abilities.
4.1 Roles and responsibilities of personnel in strategy implementation
There are various types of roles and responsibilities which will given to different
workers. It is very essential that these persons satisfy all the necessary task or work as to
implement strategies in effective manner (Elliot, 2011). The change in policies and plans which
affects rules of organisation and there are certain modifications which arises in placing an
individual at job profile. The management can allow to change its business producers that will
disable to face future contingencies or outcomes within an enterprise.
Some are the things which explain roles and responsibilities that are needed to be fulfilled by
person which are describes under:
 Top management- The senior manager are also involved in formulating some strategies
and help in decision making process. They have certain responsibilities of developing
plan of action that will assist in overcoming problems or issues which arises due to
difficult situations. This is main role of senior managers is to implement new strategies in
the company.
 Middle level managers- They are one who assist top management in implementation
new developed strategies within an organisation (Pagani, 2013). They also allow
company for measuring different conditions and take necessary step for they benefit of
the firm. Middle managers guide their employees and help in achieving target goals.

They provides direction to their workers which assist in reducing doubts related to the
new policies in the minds. A Volkswagen managers is responsible for supervise various
functions and activities which is important for reaching the task and objectives in
efficient way.
 Research and technical staff- They are the employees who keep on measuring various
activities and all technical task are also finish at the given time period. Research manager
required to check all necessary work which will assist in achieving goals and objectives.
The main task of these persons is to engaged manufacturing producers while making it
more effectively. Research department employees tries to analyse whole market and
evaluate place of strategic implementation (Klettner, Clarke and Boersma, 2014). It assist
in identifying role of strategic implementation which affects on business operations. The
aim of this strategies is to evaluate or measure all functions which creates barriers in
enterprise.
 Expatriates- These are those individuals who have some duty and responsibility in
various countries as they have skills which country could find in that nation. They has to
know that people are able to match different resources in the same direction which is
necessary for the company.
These are certain roles and responsibilities of different persons who are involved in
implementing strategy. They need to complete their job as to fulfil all the requirements in a given
period of time.
4.2 Requirement of resources for implementing the new strategy of Volkswagen
When the strategies are implemented within an organisation, mangers required to use
new resources by this they can solve any issue which arises during the production process. It will
aid in maintaining abilities of individual as per required. New strategies assist in enhancing
development and growth of the company. Some of the resources which are required are as under:
 Fixed resources- Volkswagen required to manufactures units and sale different outlets
which are part of fixed assets (Reinhardt and Stavins, 2010). These resources are required
to offer in the market in efficient manner. Management has to support on analysing the
new developing units which assist in enhancing producing capabilities. The manager has
to use resources which assist in increasing productivity and profitability.

 Human resources- Company has to ensure that its employees are satisfied and there are
necessity of new workers then they recruit more people. This is the responsibility of
manager is to hire candidate who have high skill, knowledge and abilities which are
necessary for the organisation.
 Finances- There are various types of monetary resources which are needed by firm as to
complete different procedures. The manager is responsible for spending each amount in
benefit of the firm. It assist in organising and controlling different functions and activities
which is necessary for the company. Each and every task has a certain things which need
to be acquired for its completion (Burlton, 2010). Presently. Volkswagen can not spend
more amount as to pay back penalties to US environmental commission. Then optimum
distribution is required which is not damage its capabilities.
 Raw material- They need various parts as to assemble cars, managers of Volkswagen
required to manufacture cars with qualitative goods and by this they need to find supplier
who supply higher quality of products. A manager has to maintain the firm raw material
which is essential for the production and profitability.
4.3 SMART targets in business strategy
Currently, Volkswagen does not face good condition in the market. It required approach
in each task in innovative way and adopt strategy to attain better position in market. They need to
reserve resources and assure that the firm are used in effective manner (Casadesus-Masanell and
Ricart, 2010). This will assist in maintaining present capabilities and also they requires to use
the concept of SMART targets. It is important that all the task can be finished at the set time
period. The business use this strategies for measuring company growth and development areas.
All the target will be fulfilled by adaptation of necessary resources. The employees need to finish
task at given time period which is essential for an organisation.
SMART targets are very essential and they allow firm in using people capabilities in best
manner (Verreynne and Meyer, 2011). For example, if an individual is asked to travel for 200
miles a week then he can do it but if he is told to travel for 28 miles a day, he he might be
capable to force this off. So this concept help in undertaking various targets in short objectives
and make them more achievable.
The SMART objectives of Volkswagen are as given below:
 Arrangement of strategic alliances to enter in new markets

 Raising the rate of production by 3% in next 3 months
 Increasing sales of firm by 7% in next 5 months
 Efficiency rate of production has to improved by 9% in a financial year
These are the targets that required to be reached by company in given period of time. It
will assist them in offering market in a better way.
CONCLUSION
In the above report, it can be conclude that there are various ways which can be used for
maintaining firms feasibility and viability. Volkswagen face a situation in which they has to pay
huge amount to the US environmental commission. Company has to analyse plan so it will assist
in gaining knowledge and develop new action plan to overcome threats. The firm conduct
PESTLE analysis to evaluate factors in more effective manner. Stakeholder are the persons who
are interested to invest their money in the business operations. There are different strategies that
have to used in past which assist in raising effectiveness and efficiencies of the firm such as
sustainable growth strategy, limited growth strategy, retrenchment and entry in market. It is very
essential that these persons satisfy all the necessary task or work as to implement strategies in
effective manner. New strategies assist in enhancing development and growth of the company.
SMART targets assist in maintaining present capabilities and also they requires to use the
concept of growth and development in the market.