Business Strategy Report: Volkswagen Case Study Analysis

This report presents a comprehensive analysis of Volkswagen's business strategy, focusing on the challenges and opportunities the company faces. It begins with an introduction to business strategy and its importance, followed by an organizational audit using SWOT analysis, and an environmental audit utilizing the PESTLE framework. The report emphasizes the significance of stakeholder analysis in formulating a new strategy, particularly in light of environmental regulations and the shift towards electric vehicles. It explores alternative strategies like substantive growth and identifies the justification for selecting a strategy centered around electric vehicle production. The report further details the roles and responsibilities of employees in strategy implementation, the estimated resources required, and the importance of SMART objectives. The analysis highlights Volkswagen's response to environmental concerns and its strategic adaptation to maintain market share and brand image in a changing automotive landscape. Finally, the report concludes with a summary of the key findings and recommendations.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Carry out organisational audit..........................................................................................1
2.2 Environmental audit.........................................................................................................2
2.3 Importance of stakeholder analysis during formulation of new strategy.........................3
2.4 New strategy for enterprise..............................................................................................4
TASK 3............................................................................................................................................5
3.1Alternative strategies.........................................................................................................5
3.2 Justification of selected strategy.......................................................................................6
TASK 4............................................................................................................................................6
4.1 Roles and responsibilities of employees...........................................................................6
4.2 Estimated resources require for implement new strategy.................................................7
4.3 SMART targets and its contribution in strategy implementation.....................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy refers to the process of doing planning of business activities so
company can achieve success. Overall this indicate the decisions and future actions which
enterprise take to fulfil the specific requirements of its customers (Granados and Gupta, 2013). It
is very important for manager of every organisation to develop a better and effective business
strategy, all major factors which affect the business decisions must be consider by manager.
Volkswagen, one of the largest retailer and manufacturer of automobile is taken under this for
study. Various factors which affect the process of strategic planning of enterprise such as
mission, vision and goals of firm is all detailed under this report. Different techniques which can
be use by the managers in order to formulate effective business plans and roles of employees
during strategy implementation at workplace is all given in this. In addition to this, contribution
of SMART objectives in success of enterprise and resources require to ensure effective
implementation of business strategy is all detailed in this.
TASK 1
Covered in PPT
TASK 2
2.1 Carry out organisational audit
Process in which manager analyse business operations so company can achieve its set
goals in given period of time and in effective way. This audit make the manager aware about all
business activities and support in take right decision (Alsudiri, Al-Karaghouli and Eldabi, 2013).
SWOT analysis can be done by managers of Volkswagen for the purpose of organisation audit.
Strengths: These are known as the qualities and skills which make the company superior and
different form its rivals. Further, this increase profits of company and provide competitive
advantage to it. Major strengths of Volkswagen are as follows:
 Firm has a wide range of cars which provide an option to customers to choose from
 Enterprise has a high brand presence
 350000 workers work under this on a global level.
 Firm has number of manufacturing plants in China, India, Russia, Brazil, Germany,
Argentina, Spain and south Africa.
 Firm do excellent marketing with help of print media, online ads, TV and hoardings.
1

 Volkswagen is one of the oldest manufacturer of car and now it reach to large number of
masses.
 Firm has a presence in motorsports and hybrid cars. Company get reward for its services and cars.
Weakness:
 Controversy and fraud about the emissions of car hamper the image of brand on a global
level. Big competition from international car manufacturing firms limit the market share and
growth of Volkswagen.
Opportunities:
 Firm can create and maintain good relationship with non-German car manufacturers.
 Implementation of innovation on continuous basis in cars can strengthen the brand
position
 Firm can enter into different markets by offering cars with various features and can
attract its target customers. Increase purchasing power of people.
Threats:
 Enhanced features offer by its rivals affect the profits and market share of Volkswagen
 Increase prices of fuels reduce purchase of cars
 Policies and regulations of government to protect interest of local cars manufactures.
2.2 Environmental audit
This is known as the analysis in which manager research to examine the factors that exist
in business environment and that affect the activities and operations of business. This evaluation
helps manager in formulate better plans and policies for business. A tool called PESTLE can be
use by the managers of Volkswagen for this. Political: As firm operate on a global level so enterprise face number of political issues
and difficulties. Government of every country form different policies and regulations
which affect the business activity and business activity of company (Azar, 2011). Car
sector is the one which get affected by the political situation exist in a country which
directly affect its sales and profits of firm. In this situation it is major challenge before
2

Volkswagen to understand the political situation of a country in order to operate there in
an effective way. Economic: This element of PESTLE consists various factors such as inflation rate,
foreign exchange rate and many other which impact the business activity. Variation in
these element affect the business operations of enterprise for example, if government
introduce a variation in tax rate then this affect the pricing strategy of organisation. Social: Different elements such as attitudes, beliefs, behaviour and purchasing pattern of
clients come in this. It is very essential for manager to study all this before offering final
products to customers. Legal: Various legal bodies are there which formulate policies and makes rules in order
to get a control over various business operations and to maintain economic development
of nation. For execute business operation in a country, every enterprise require to adhere
those rules otherwise it give rise to a penalty or legal action. Technological: Every enterprise use technology in order to carry out production process
and it is very essential that updated and new technology must be use by firm as this help
in attract large number of customers (García‐Rodríguez and et. al., 2013). It is very
essential for Volkswagen to use right technology to offer featured products to its target
market.
 Environmental: Today customers are become aware about safety of environment and for
this they purchase only that products that does not harm the environment. All this
influence enterprise to use only good equality material in production of products.
2.3 Importance of stakeholder analysis during formulation of new strategy
Stakeholders refers to those individuals, groups, enterprises that contribute in success of
company either direct or indirect way. Directors, suppliers, employees, creditors, shareholders,
community, unions and government all are known as stakeholders. Stakeholders analysis is a
tool which is used by enterprises to determine the individuals who assist business operations
(Bucolo and Matthews, 2011). It is very important for Volkswagen to carry out stakeholder
analysis for formulate a new strategy for business. Importance of this analysis in formulation of
new strategy can be understood by the points give below:
 It helps in get relevant opinions from stakeholders.
 It helps enterprise in get support from powerful stakeholders.
3

 It helps in understand their nature with help of communication.
 Helps in estimate reaction of individuals about business activities.
For carry out stakeholder analysis following are the steps which can be follow by Volkswagen.
Step one: first step of stakeholder analysis include identify the individuals who are
involved in business operations and get affected by it.
Step two: Next step of stakeholder analysis consists determine the influence, power and
interest of stakeholders. For this, Volkswagen should build a stakeholder grid. Under this
stakeholders which high interest, power and influences do maximum efforts to influence
business strategies to to promote the company's offering. Further, stakeholders with high power
and low interest also influence business strategies but they get bored with the company at early.
Stakeholders with low power and high interest should be kept informed about all business
activities because they are very helpful for enterprise (Goll and Rasheed, 2011). Low power and
less stakeholders does not influence the business operations so enterprise require to do minimum
efforts in order to monitor them.
Step three: In last step of stakeholder analysis firm require to develop a good
understanding about the individuals which are most important for enterprise in order to collect
feedbacks form them and to get their support for business operations.
2.4 New strategy for enterprise
Government of United Kingdom developed different laws and various regulations and
make it mandatory for firms to use good quality material for make final products for customers.
Government has do this because increase amount of pollution in air and water. Further, to safe
the environment, vehicles which which that produce huge amount of pollution are totally
restricted. Earlier, Volkswagen made the cars that produce high amount of pollution and as this
was increasing the amount of impurity in water and air so due to this, government banned the
production of car in order to save the environment. In this situation, firm undertake the
production of electronic cars in order to attract more number of customers and to maintain its
market share (Bucolo and Matthews, 2011). Idea of electronic cars offer various benefits to
enterprise. In a situation where government banned the care which are producing high amount of
pollution, production of electronic cars ins the best solution for Volkswagen.
4

TASK 3
3.1Alternative strategies
It is very necessary for enterprise to select an proper strategy for business to accomplish
end goals and objectives in an effective way. Major strategies which can be opt by Volkswagen
are as follows:
Substantive growth strategy: In this business strategy, managers formulate plans to expand
company's operations in other areas. Firm do expansion either vertically or horizontally. Related diversification: When enterprise do diversification in product line that is nearly
related with existing product line of business, it is known as related diversification. Unrelated diversification: Under this, firm makes diversification which is vary from the
existing one. Horizontal diversification: In this, different enterprises involved in businesses that deals
in different industries are known as horizontal integration. Vertical diversification: When various enterprises consists in different stage of
production in same industry is known as vertical integration.
Limited growth strategy: In this, various type of tactics use by manager in order to reach
end goals and objectives. Market penetration: It consist penetrating the current market by increase the market
share of company's product or raising development of new products with help of various
strategies such as discount, advertising and many more. Market development: under this, organisation offer it current products and services in
various market place. Product development: This consists design, create and market new products and services
as per the needs and interest of customers. All this increase profits of enterprise.
Retrenchment: Turnaround: this strategy is used by enterprise to transform an underperforming firm to
a gainful one. This basically applied on sick firms to solve financial issues and to
improve financial performance. Liquidation: This strategy is adopt by enterprises when they reaches to its last stage of
life cycle. In this, firm closes down all its concern activities, sell its valuable assets and
use it to pay to its creditors.
5

 Divestment: This consists selling business to another enterprise.
3.2 Justification of selected strategy
Due to production of pollution vehicles, Volkswagen faced number of obstacles that
increase the complexity of business activities. To overcomes with this condition and to increase
the effectiveness of business, it is necessary for firm to choose a effective strategy. Substantive
growth strategy is the one which can be choose by company (Butler, 2012). Further, to solve the
problem company can carry out the production of electronic cars. Due to high amount of
contamination in air and water, firm is facing lot of issues and production of electronic cars is the
best method which can be chose by enterprise. Further, to increase the acceptability of its
products, it is very important for firm to make products as per the policies and rules set by
government. In this way, firm can capture a larger market share and at the same time can
maintain its positive image.
TASK 4
4.1 Roles and responsibilities of employees
Strategy implementation is the procedure in which manager ensure effective execution of
different business operations to achieve end results. It is very significant for manager to collect
adequate data from various sources in order to enhance the effectiveness of strategy
implementation (Dandira, 2011). This ensure completion of business objectives and activities in
right way and at the same time this ensure effective utilisation of all company's resources.
Workers of firm are the one who play a big role in this. Form top to lower level managers, all
contribute in effective implementation of strategy. For this, it is very essential that right and
effective channel of communication must be use at workplace. Further, major responsibilities of
a manager during strategy implementation are as follows:
 It comes under the responsibility of manager to use various methods in order to
encourage employees to perform well. This increase their contribution in success of
company.
 Manager remain liable to carry out research to collect information about current trends
exist in market and then introduce changes as per the requirement.
 Manager identify the resources require to execute business operations and then allocate
the same.
6

Employees: Staff members play an effective role in growth and success of firm. These
are the one who take part in production process and make featured product for target customer of
enterprise. It is very essential that all workers should be well informed about what is going at
workplace so they can perform and can take decisions accordingly.
Engineers: These individual provide their technical advice and guidance to company
which help workers in work with new technologies.
4.2 Estimated resources require for implement new strategy
It is very important that implementation of strategy must take place in an effective way as
this affect the growth and effectiveness of business operations. For achieve set goals and
objectives it is very important that firm should have all required resources (Elhamma and Zhang,
2013). Lack of resources increase cost of business operations and at the same time increase
complexity of business activities. In case of Volkswagen, it is necessary that company should
have required resources. Main resources which must be there for achieve effective execution of
business activities consists the following: Financial resources: Funds are know as major resource behind survival and existence of
an enterprise. Without this, a company cannot achieve anything. So it is a perquisite that
Volkswagen should have adequate amount of funds to execute all business operations in
an adequate way. Lack of funds create unnecessary delays in completion of business
operations and also affect the profitability of company. Human resources: These are known another most important resource which must be
there to achieve effective implementation of strategy. It is necessary that company should
a skilled workforce so firm can achieve its goals and objectives. Further, for enhance the
skills and knowledge of employees, manager can conduct training and development
programmes for staff members.
 Physical resources: Strategy implementation require various fixed resources such as
building, furniture and other important equipments. It is essential that firm should have
updated technology so it can better satisfy the needs of its customers.
4.3 SMART targets and its contribution in strategy implementation
Concept of SMART goals can be use by the managers of Volkswagen in order to get
impressive implementation of strategy and to get all benefits. SMART refers to the specific,
measurable, attainable, realistic and time bound objectives (Ferreira and et. al., 2011). This
7

ensure maximum utilisation of all company resources and help firm to serve more number of
customers. Contribution of SMART objectives and goals in strategy implementation can be
understood by following points: Specific: As per this, final goals of firm should be specific. This guide and direct
managers in take right decision for business which provide various benefits to company. Measurable: As per this, final goal and objective of firm must be measurable. One of the
main advantage of this is that it provide an chance to manager to examine the
effectiveness of strategy. Example of a measurable goal is that Volkswagen wants to
increase its sale by 5% in coming 6 months. Acceptable: End goals and targets of enterprise must be acceptable by all stakeholders at
every level. This help firm in get support of all stakeholders which increase both profits
and productivity of enterprise. Relevant: Relevant targets refers to those end whose completion add value to overall
business activity and contribute in its success.
 Time bound: It is very necessary for manager to set time bound objective (Galpin and
Lee Whittington, 2012). This help enterprise in complete all business activities in given
period of time and at the same time provide various other advantages. Example of a time
bound objective is that Volkswagen wants to increase its market share by 5% in coming
one year.
Concept of SMART objective provide an opportunity to manager to examine the
effectiveness of goals and and at the same time ensure completion of business objectives in time.
Overall concept of SMART objective enhance effectiveness of strategy implementation.
CONCLUSION
From the given project report, it can be concluded that business strategy helps enterprise
to reach it end goals and objectives in an effective way. Major elements such as strengths,
weakness, opportunities and threats of a company all must be consider by manager during
formulate a strategy for business. Number of techniques are there which can be use by manager
of firm to develop better and effective business plans. It is very essential for every enterprise to
carry out an analysis in order to collect information about the needs and requirements of
stakeholders as they also play a big role in company's success. Workers of firm play a effective
role strategy implementation so it is very essential for workers to perform their roles and
8

responsibilities in an effective way so company can achieve its end goals and objectives.
Whenever an enterprise implement a new strategy then it require number of resources and it is
very essential that enterprise should have all the equipments to get all benefits of that strategy.
9

REFERENCES
Books and journals
Alsudiri, T., Al-Karaghouli, W. and Eldabi, T., 2013. Alignment of large project management
process to business strategy: A review and conceptual framework. Journal of Enterprise
Information Management. 26(5). pp.596-615.
Azar, O. H., 2011. Relative thinking in consumer choice between differentiated goods and
services and its implications for business strategy. Judgment and Decision Making. 6(2).
p.176.
Bucolo, S. and Matthews, J. H., 2011. A conceptual model to link deep customer insights to both
growth opportunities and organisational strategy in SME’s as part of a design led
transformation journey. Design management toward a new Era of innovation.
Bucolo, S. and Matthews, J. H., 2011. A conceptual model to link deep customer insights to both
growth opportunities and organisational strategy in SME’s as part of a design led
transformation journey. Design management toward a new Era of innovation.
Butler, D., 2012. Business development: a guide to small business strategy. Routledge.
Dandira, M., 2011. Involvement of implementers: missing element in strategy formulation.
Business strategy series. 12(1). pp.30-34.
Elhamma, A. and Zhang, Y.I., 2013. The relationship between activity based costing, business
strategy and performance in Moroccan enterprises. Accounting and Management
Information Systems. 12(1). p.22.
Ferreira and et. al., 2011. John Dunning’s influence in international business/strategy research: a
bibliometric study in the strategic management journal. Journal of Strategic
Management Education. 7(2). pp.1-24.
Galpin, T. and Lee Whittington, J., 2012. Sustainability leadership: From strategy to results.
Journal of Business Strategy. 33(4). pp.40-48.
García‐Rodríguez and et. al., 2013. Corporate social responsibility of oil companies in
developing countries: from altruism to business strategy. Corporate Social
Responsibility and Environmental Management. 20(6). pp.371-384.
Goll, I. and Rasheed, A. A., 2011. The effects of 9/11/2001 on business strategy variability in the
US air carrier industry. Management Decision. 49(6). pp.948-961.
Granados, N. and Gupta, A., 2013. Transparency strategy: Competing with information in a
digital world. MIS quarterly.37(2).
Hall, J. and Wagner, M., 2012. Integrating sustainability into firms' processes: Performance
effects and the moderating role of business models and innovation. Business Strategy
and the Environment. 21(3). pp.183-196.
Helms, M. M. and Whitesell, M., 2013. Transitioning to the embedded librarian model and
improving the senior capstone business strategy course. The Journal of Academic
Librarianship. 39(5). pp.401-413.
Kalyani, M. and Sahoo, M. P., 2011. Human resource strategy: A tool of managing change for
organizational excellence. International Journal of Business and Management. 6(8).
p.280.
Moseley III, G. B., 2017. Managing Health Care Business Strategy. Jones & Bartlett Learning.
Murano and et. al., 2011. Hyaluronan: from biomimetic to industrial business strategy. Natural
product communications. 6(4). pp.555-572.
10