Business Strategy Report: Strategic Analysis and Planning for VW AG

This report provides a comprehensive analysis of Volkswagen AG's (VW AG) business strategy, addressing key aspects of strategic planning and implementation. It begins with an introduction to strategy and its importance, followed by an organizational audit that assesses VW AG's strengths, weaknesses, opportunities, and threats. The report then conducts an environmental audit using the PESTLE framework to evaluate political, economic, social, technological, legal, and environmental factors impacting the company. Stakeholder analysis is also performed to assess the significance of stakeholders in formulating new strategies. The report proposes a new strategy for VW AG, suggesting the implementation of the Ansoff matrix, focusing on market and product development. Furthermore, it analyzes alternative strategies, including market entry, substantive growth, limited growth, and retrenchment, justifying the chosen strategies for VW AG. The report concludes by discussing the roles and responsibilities of personnel in strategy implementation, estimating resource requirements, and highlighting the contribution of SMART targets to achieve the strategic goals.

BUSINESS STRATEGY

Table of Contents
BUSINESS STRATEGY.................................................................................................................1
Introduction......................................................................................................................................3
TASK1.............................................................................................................................................3
To be covered in power point presentation.................................................................................3
TASK2.............................................................................................................................................3
2.1) Strategic positioning of VW AG by organisational audit....................................................3
2.2) Environmental audit for WV AG.........................................................................................4
2.3) Assess the significance of the stakeholders analysis when formulating new strategy........5
2.4) New strategy for VW AG....................................................................................................6
TASK3.............................................................................................................................................6
3.1) Analyse the appropriateness of alternative strategies relating to market entry, substantive
growth, limited growth or retrenchment for VW AG.................................................................6
3.2) Justify selection strategy......................................................................................................7
TASK4.............................................................................................................................................7
4.1) Roles and the responsibility of personnel who are charged with strategy implementation.7
4.2) Analyse the estimated resources requirements for implementing a new st6rategy for VW
AG...............................................................................................................................................8
4.3)Contribution of SMART targets to the achievement of the strategy implementation in WV
AG...............................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

Introduction
Strategy is the most important element in running any of the business. It is the plan of the
management which helps the organisation to grow and to increase the performance. Strategic
planning helps the organisation to attain the objectives and the goals effectively.
There are some factors on considering them the organisation carry out all the activities.
These factors can affect the functioning of the firm positively as well as negatively. So to cope
up with these factors the firm must do strategic planning. It help to make a foundation on which
the firm carry out its whole working (Acquaah., 2011.).
TASK1
To be covered in power point presentation.
TASK2
2.1) Strategic positioning of VW AG by organisational audit.
Organisational auditing is a tools through which the firm can be able to assess the internal
factors of the organisation.
 Strength- Volkswagen has the widest portfolio of the brands among all the industries of
auto mobiles. There are no rivals in the market who has this ranges of brand portfolio in
their management. Volkswagen has introduced new strategy to cope up the scandal
emission. The difference in the range of the brands the firm can able to target the
different group of the customers. It has the best geographical diversified income among
all the companies of this industry. No market has yet generated more than 20% of the
Volkswagen's revenue.
 Weaknesses- The worse part is its negative publicity, it is very badly hampering the
functioning of the brand. It was found stuck in the scandal (Bharadwaj and et. al., 2013.).
It was found that the firm is installing software codes in the vehicle run by diesel. Due to
which such things were emitted which can be injurious to the health of the people. The
firm has many drawbacks in its product with which it has to recall many of its product
from many parts of the world. It also received many criticism because of the action that it
did.

 Opportunities- It has many opportunities that can help it to overcome the situations that
it has faced. It is expected that the prices of the fuels can be raised in the future. With the
low prices of the fuel the demand for large vehicles has increased. Volkswagen mostly
deals in the smaller vehicle range in case the prices of the fuel rises then too the demand
does not get affected for the vehicles of Volkswagen. The firm is trying to do effort to be
in the market by offering the benefits that can overcome the loss got by the scandal of
emission. To develop the competencies the firm has to acquire small start ups.
Acquisition is a costly task but the current rate is comparatively less so the firm can go
for this opportunity (Casadesus-Masanell and Ricart., 2010.).
 Threats- The competition is very high as the market is very big hence new players are
entering into the market and they are trying to tap the untapped market which becomes a
problem and the customers are switching from one to another.
2.2) Environmental audit for WV AG
Environmental audit is the tool by which the firm can know the external factors that can
be complied with the functioning of the firm so that the effective strategic plan can be
formulated. For the objective of knowing the external factor PESTLE study can be carried out.
1. P (Political environment)- Volkswagen if deals in the domestic market then easily it can
handle the situations but going further the firm might face tough competition. But if the
firm will cross the boundaries and trade outside the country's boarder then the challenges
can become an opportunity as because it can be able to tap the market which no one has
yet worked on.
2. E(Economical environment)- This factor of environment can affect in the formulation of
the strategic plan as because the PPP( purchasing power parity) of the customer is the
major aspect. The firm deals in the auto mobile industry ans the prices are in high ranges
hence it can affect the demand (Chen and et. al., 2012.).
3. S(Social environment)- Society is now very conscious towards the brands of the product
which they uses therefore the buying behaviour of the customers has changes.
4. T(Technological environment)- The technology is getting better in today's market. Every
day advanced technology has been introduced in the market. It is very must that the firm
should follow the trends of the market.

5. L(Legal environment) – As the firm crosses the boundary the the whole legal system get
changed. In the domestic area the firm has to follow different laws and in domestic
market. Volkswagen has to manage both the domestic and international market's laws,
rules and regulation so that it won't suffer any kind of problems related to the legislation.
6. E(Environmental factors)- Volkswagen should do the operations in such a way that the
nature and the environment does not get affected (Cinquini and Tenucci., 2010.). As the
firm deals in the auto mobile industry there are chances that the emission of carbon and
other poisonousness gases can take place so it the responsibility of the firm to do careful
operations to safe the nature.
2.3) Assess the significance of the stakeholders analysis when formulating new strategy.
Stakeholder analysis is the tool to analyse the behaviour and attitude of the stakeholders
towards the firm and its product. In this 21st century it has become very important to do the
analysis of the stakeholders. The motive of the study of the stakeholders are to develop the
coordination and cooperation among the stakeholders and the strategic planning process.
According to Volkswagen the stakeholders analysis is done so that the strategic planning
can be effectively formulated. The firm has to make strategies that are convincing and can help
to attract the customers.
In every stage of the strategy formulation the concern of the stakeholders are very must.
The firm has to understand that the stake holders are satisfied with the planning and the offerings
done by the firm. With this the capacity of the working and the competency of the employees can
also be identified. It is very well known that the strategies that are planned can only be get
successful by the performance of the employees (Higgins, Omer and Phillips., 2015. ).
Accordingly the decision can be taken. This analyses help to know about the consumers mindset.
Study related to the needs and the wants of the customers can be analysed. What are the trends
that the market is following can be studies very clearly.
With the help of stakeholder analysis the financial help can also be availed. Positive
responses from the investor can also be gained with stakeholder analysis technique. If there are
any legal issues that can also be identified with the help of this analysis. With this way proper
and effective strategic planning can be formulated.

2.4) New strategy for VW AG
Volkswagen can implement new strategy of Ansoff matrix which is very effectively used by
many of the big organisations. The firm has to focus on the market development and the
strategies related to the product development (Hsieh and Chen., 2011.). The market which
already Volkswagen is dealing with need not to considered instead they have to tap those market
which is untapped by the firm. It has to be understand by the firm that the development of the
market is a very expensive issue but the strategies if implemented effectively then Volkswagen
can reduce its cost ans can generate appropriate revenues.
The different strategies of the product development and market development will result in
positive manner and it will help in gaining the competitive advantage. Through differentiated
strategies the product development can be strengthened out (Issa-Salwe and et.al., 2010.).
TASK3
3.1) Analyse the appropriateness of alternative strategies relating to market entry, substantive
growth, limited growth or retrenchment for VW AG
The alternative strategies that are very useful in providing the opportunities in facing the
problems and the challenges by the firm. In developing the market the strategy of market entry is

very effective. With its help the market share be captured in more numbers. Joint venture,
franchising, mergers and acquisition are some of the strategies by which the firm can be cable to
captured the share of the market.
With the help of diversification and integrated strategies substantial growth can be
ensured. Distribution channel can be established by the firm to reach easily to the customers.
Volkswagen can introduce new range of the product so as to diversify in the market. The firm
can handle the severe situation by the help of the limited growth strategies (Liedtka., 2010.).
Retrenchment is also a strategy which also help the firm to handle the difficult situation
that the firm might face in the upcoming time. It will help the firm to manage the resources and
fulfilling the expectation of the customers and it also ensure to cut the cost effectively.
3.2) Justify selection strategy
As Volkswagen is working very effectively in the competitive market but still it is not
coping up with the expectation of the firm and the customers. The rate of its growth is good
enough to attain the objectives but it has to put more efforts on the operations. With the help of
the discussed strategies the firm can be able to do better in its performances. The firm can focus
properly on the approaches of the business. The differentiation strategy can be a very supporting
part which can help the firm to develops its product.
With the help of limited growth strategy the firm can face the challenges and the issues
effectively and it can fine out the solutions to the related problems. Therefore the strategies opted
by Volkswagen can be very feasible to attain the objectives and goals of the firm and it also
helps in the growth and stability of the organisation (Melville., 2010.).
TASK4
4.1) Roles and the responsibility of personnel who are charged with strategy implementation.
It is very necessary to have the a responsible staff to handle the strategies that the planner
has made. Well trained employees are required to fulfil the duties and the responsibility related
to the strategies that are to be implemented. The employees of the firm must be aware of the
implications behind the use of the strategies. The reason must be very clear so that the staff could
be convinced.
The main responsibility is to communicate all the strategy plans to the related
departments of the firm so as to work accordingly and the can able to attain the objectives. The

role of the personnel is to involve each every member in the implementation of the strategic plan.
Similarly the communication should have to be done effectively so that the problems can be
minimised as soon as possible.
4.2) Analyse the estimated resources requirements for implementing a new st6rategy for VW AG
 Raw materials- Volkswagen deals in the auto mobile industry therefore to manufacture,
the required materials has to be collected from all the places so that the firm can perform
its manufacturing part effectively (Nordqvist and Melin., 2010. ).
 Financial resources- It is the most important aspect because to operate a business the
money is the important part with out which nothing can be done. So financial factors has
to be strong enough to manage the operations of the firm.
 Technological resources- Now a days the technology is becoming very advance. The firm
has to be updated with the time and this is also an important resource that has to manage
by the firm to run the business activity smoothly.
 Human resources- The most important part of any of the business are the man power
working there. The whole management from top level to bottom level is been accessed by
the work force.
4.3)Contribution of SMART targets to the achievement of the strategy implementation in WV
AG
With the help of the SMART target the firm is able to achieves its objective very
effectively and efficiently. SMART target can be defined as follows-
 S- Stands for the Specific target with the help of which the firm can be able to capture
certain ratio of the market. By half yearly bases the cited firm is willing to increase the
market share with around 4.5%
 M- Stands for the Measurable targets with this the firm can able to achieve the specific
target. It is measured by the profit earned and also by counting the products sold by the
firm.
 A- Stands for the Achievable targets (Pagani., 2013.). When the firm implement the
strategies in appropriate manner then the objectives cab be obtained effectively.
 R- Stands for Realistic target. It means that all the objectives that are set by the firm
should be realistic. Unrealistic claims should not be done to increase the share of the
market.

 T- Stands for Time approach. The objectives that the firm has set should be analysed and
revised timely (Scholes., 2015. ).
CONCLUSION
With the reference of this report it is studied that business strategy is a very important
part of the business. It affects the growth and the development of the firm. We also studies the
strategic planning techniques such as the BCG matrix, SWOT analysis, it also help to know the
positions of the firm's product in the market. Volkswagen current market position can be
improved with the strategies which we have discussed in detail.

REFERENCES
Books and Journals
Acquaah, M., 2011. Business strategy and competitive advantage in family businesses in Ghana:
The role of social networking relationships. Journal of Developmental Entrepreneurship. 16(01).
pp.103-126.
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of insights.
Casadesus-Masanell, R. and Ricart, J.E., 2010. From strategy to business models and onto
tactics. Long range planning. 43(2). pp.195-215.
Chen, C.C. and et. al., 2012. A business strategy selection of green supply chain management via
an analytic network process. Computers & Mathematics with Applications. 64(8). pp.2544-2557.
Cinquini, L. and Tenucci, A., 2010. Strategic management accounting and business strategy: a
loose coupling?. Journal of Accounting & organizational change. 6(2). pp.228-259.
Higgins, D., Omer, T.C. and Phillips, J.D., 2015. The influence of a firm's business strategy on
its tax aggressiveness. Contemporary Accounting Research. 32(2). pp.674-702.
Hsieh, Y.H. and Chen, H.M., 2011. Strategic fit among business competitive strategy, human
resource strategy, and reward system. Academy of Strategic Management Journal. 10(2). p.11.
Issa-Salwe, A. and et.al., 2010. Strategic information systems alignment: Alignment of IS/IT
with business strategy. JIPS. 6(1). pp.121-128.
Liedtka, J., 2010. Business Strategy and Design: Can this Marriage Be Saved?. Design
Management Review. 21(2). pp.6-11.
Melville, N.P., 2010. Information systems innovation for environmental sustainability. MIS
quarterly. 34(1).pp.1-21.
Montgomery, C.A. ed., 2011. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media.
Nordqvist, M. and Melin, L., 2010. The promise of the strategy as practice perspective for family
business strategy research. Journal of Family Business Strategy. 1(1). pp.15-25.
Pagani, M., 2013. Digital business strategy and value creation: Framing the dynamic cycle of
control points. Mis Quarterly. 37(2). pp.617-632.
Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Woodcock, N., Green, A. and Starkey, M., 2011. Social CRM as a business strategy. Journal of
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Online
SWOT analysis of Volkswagen. 2017. [Online]. Available
through:<https://www.strategicmanagementinsight.com/swot-analyses/volkswagen-swot-
analysis.html> .[Accessed on 12th April 2017].