Comprehensive Business Strategy Analysis: VW AG Case Study

This report offers a comprehensive analysis of VW AG's business strategy. It begins with an introduction to business strategy and its application in the competitive market. The report then analyzes VW AG's strategic position using a SWOT analysis, highlighting its strengths, weaknesses, opportunities, and threats. It also examines the business environment, including political, social, economic, environmental, technological, and legal factors. The report assesses the significance of stakeholder analysis in strategy formation, emphasizing the importance of customer, employee, and government perspectives. A new product development strategy for VW AG is presented, focusing on innovation, pollution reduction, and customer attraction. The report also discusses market entry strategies, resource requirements, and the role of SMART targets in achieving strategic implementation. The conclusion summarizes the key findings and recommendations for VW AG's future business strategy.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Analysis of the Strategic position of the VW AG...........................................................1
2.2 Explanation about the business environment of VW AG company................................3
2.3 Assessment of the significance of stakeholder analysis at the time of new strategy
formation................................................................................................................................5
2.4 present a new strategy for VW AG..................................................................................6
TASK 3 ...........................................................................................................................................7
3.1 analyses the appropriateness of alternative strategies relating to market entry................7
3.2 Justify the selection of a strategy....................................................................................10
TASK 4..........................................................................................................................................11
4.1 Assess the roles & responsibilities of personnel at VW AG..........................................11
4.2 Analyse the estimated resource requirements for implementing a new strategy- .......11
4.3 The contribution of SMART targets to the achievement of strategy Implementation-..12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
In the present time there are huge competition in the market as various organisation
desires to again high level of profitability and outcome. For attaining this objective, business unit
develop several kinds of the tactics and business strategies. It is a kind of source and way to
compete with rivals and make effective position in the market. Business strategy is a planning for
solve a specific problem and develop competitive position in the competitive market. In a simple
word it can be said that business strategy is a tactic to addressing the high level of result and
outcome within the competitive market (Mitchell and et.al., 2016). The present report is based on
the application of business strategy in order to earn effective competitive advantage and develop
excellent position of company in the market. In the present study, VW AG company has been
discussed for gaining effective knowledge and application about the business strategy. It is one
ODF the world largest automotive manufacturing company which sell passenger cars. In addition
to this, business environment audit has been also studied with respect of cited venture.
Furthermore, components that have considered when formulating strategic plan has been also
addressed in this study.
TASK 1
Converted in PPT
TASK 2
2.1 Analysis of the Strategic position of the VW AG
On the basis of given scenario, VW AG company is one of the world largest automotive
manufacturing company. It deals with several kinds of passenger car such as Skoda, Audi,
Bugatti, Bentley, Ducati etc. Cited venture sell its product and services in 150 countries and it
has 100 production facilities in the 27 countries. Cited venture have major objective is to deliver
high quality of product and services in the market. In order to attain this objective, cited venture
requires analysing its internal capabilities and strength (Gonzalez-Padron, Hult and Ferrell,
2016). While company effectively analyse and assess its internal strength, capability and position
then it can easily develop specific strategy for attain its determined target. In order to analyse the
strategic position of VW AG company, SWOT model can implement. Following are systematic
description of SWOT analysis of cited venture-
Strength
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 The main strength of VW AG company is that it have strong position and brand image in
the market as it brand name is enough to promote and sales its automobile product and
services (Grünig and Kühn, 2015). The major reason for its strong brand is that it uses
high quality of raw material in its production and operation.
 It's another strength is that it have joint venture with the local Chinese automaker by
which it has gain effective profitability and market share in the market (Shi, 2016). In
addition to this, it has the widest brand portfolio among all automotive companies in the
world.
 It has used diversification strategy through which it has gained high level customer
attraction.
Weakness
 It has major weakness is related to the low market share in the US automotive market. It
uses the same eating away all major car manufacturer that is why its market share has
been down in the US market.
 It's another weakness is related to the little expertise in the industry. As per the research it
has been founded that cited venture is unable to manufacturer and produce the battery
care which is high demand of the customer in the market (Houdet, Trommetter and
Weber, 2012).
Opportunities
 It has major opportunity is to conduct joint venture and acquisition in the US and UK. It
has another opportunity to develop automatic and battery car in the market so as it can
attract large numbers of customer toward the brand. It has opportunity is to become the
number one car automobile manufacturing company in the world.
Threats
 Due to regular changing and advancement in the technology, company have to face the
major issue related to huge investment of capital. Its another major threat is related to
changing business environment component such as economic, social, cultural,
technological, legal etc (Jaber and et.al., 2015). Due to the economic factor, inflation,
recession and interest rate can hugely impact upon the company's operation and
production.
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Bowman's Strategy Clock is a model used in marketing to analyse the competitive position of a
company in comparison to the offerings of competitors. It explores the options for strategic
positioning that is how a product should be positioned to give it the most competitive position in
the market. There are six core strategic options which are as follows-
 Low price and low value added- The product is not differentiated and the customer
perceives very little value, despite a low price
 Low price- In this company set lower cost.
 Hybrid- Hybrid position involves some element of low price
 Differentiation- This aim is to attract the new customers. The aim of a differentiation
strategy is to offer customers the highest level of perceived added value
 Focused differentiation- This strategy aims to position a product at the highest price
levels, where customers buy the product because of the high perceived value
 Risk high margin- It has higher level of risk.
 Monopoly pricing- There is only one business offering the product.
 Loss of market share- This position is a recipe for disaster in any competitive market
2.2 Explanation about the business environment of VW AG company
Environmental audit plays a very crucial role in the organisation by which company can
assess and analyse the impact of external factors which can hugely influence business activities
and operation. It is very important for the organisation to conduct environment audit in order to
survive in the market for long time (Staake, Thiesse and Fleisch, 2012). In the context of VW
AG company it has lots of competitors available in the market and it is very big brand so it is
very important for cited venture to analyse the business environment and its various element.
These elements and its impact on this cited venture are as follows-
 Political factor- In the business environment, political factor is one of the huge element
which includes government interfere by its imposed policies, rules, regulation, code of
conduct, norms etc. VW AG company is one of the most popular automobile company
which deal with various kinds of passenger car such as Skoda, Audi, Bugatti, Bentley,
Ducati etc (Amran, Ooi and Devi, 2015). Cited venture sell its product and services in
150 countries and it has 100 production facilities in the 27 countries. In every country,
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there is different political norms and regulation which have to follow the organisation
while it deal with that country.
 Social and cultural- This is another one of the most significant element in the business
environment which relates with customer taste, life style preferences, demographical
condition, culture etc. VW AG company should requires to understand the customer
taste, preferences and requirement so asd it can effective meet their expectation. In every
country, there are different cultural and social factors which can impact the business
operation and activities.
Illustration 1: Pestle analysis
Source:Pestle analysis, 2017
 Economical- VW AG company can largely influence by the economical factor because
in every country there is different situation of the inflation, recession and interest rate.
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While financial crises occurs then it can directly impact upon the operation of cited
venture.
 Environmental- In the countries, government have developed some practices to control
the pollution so this factor can impact upon the operation and manufacturing of the
company (Kernbach, Eppler and Bresciani, 2015). In addition to this, fuel availability in
the country can also affect the operation of cited venture.
 Technological- This is another one of the most significant element in the business
environment which can affect the VW AG company. As cited venture is car automotive
company which develop car product and services. While technology changed then it has

to modify in its technological infrastructure which can also influence production and
manufacturing activities.
 Legal factor- In this factor various legislation and standard are included related to
employees, business and customer which have to follow by the company in order to keep
protect and secure. With help of this factor, company can easily protect from the
unethical and illegal action and activities.
2.3 Assessment of the significance of stakeholder analysis at the time of new strategy formation
In an organisation stakeholder is one of the most significant body which can directly and
indirectly engage with the company's activities and functions. Stakeholder is those people who
have interest in the company's financial position, profitability, loss etc. With assistance of the
stakeholder analysis, company can easily develop new strategies and take appropriate decision
about the business (Leitner, Meissner and Martyna-David, 2015). Stakeholder includes customer,
employees, government, suppliers, investors etc. Corporation have great responsibility to
maintain healthy relationship with them so as it can design impressive business strategy by
taking their view, opinion and interest within the business unit. In the context of VW AG
company, stakeholder analysis can assist in taking effective business decision and development
of new business strategy. Stakeholder analysis technique is the method of examining the
significance of the stakeholder in taking the business strategy. And business decision. With
assistance of stakeholder analysis, company can easily develop important business strategy.
Following are some significance of the stakeholder analysis within the cited venture in order to
design new strategy-
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 With assistance of stakeholder analysis, company can easily acknowledge about the
customer taste, preferences, choice and requirement related to the auto mobile product
and services (Baird and Baird 2017). Customer is a significant stakeholder which can
directly and directly influence by changing business product prices, features, practices
And policies. At the time of taking new decision about the new business strategy, stakeholder
analysis can help in acknowledging the customer taste and preferences (Bjerke and Renger
2017).
 With help of stakeholder analysis, VW AG company can assess and analyse the reaction
of various parties and stakeholder such as employees, customer, suppliers, government
etc.
 Stakeholder analysis can also help to the cited venture in allocating and utilising the
resources in the effective manner (Johnson 2017). With aid of this method, company can
able to know the interest of various stakeholders and according to their view, opinion,
interest, participation and impact, company can design the new strategy.
2.4 present a new strategy for VW AG
VW AG company develop that type of product who generated profit, sales, and refuses
pollution then they require. New product development strategy VW AG can avoid was trying
time, money and business resource. This company makes a product those reduce pollution and
not giving harm for they product. That type of product give innovative to the society, this type of
product attract toi customer and some customer will loyal with brand and develop brand. These
type increasing in sales and net profit (Cassidy, 2016). These type lots uses of technology ans
machinery. That type of product develop the cost and sallling price.
Changes in company developing new strategy
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 Customer found innovative product – when company make they innovative product that
reduce pollution then customer will attractive and founding something innovate and new
thing.
 Increasing in sales- when VW AG company make innovative then auto automatic
generate the sales and customer attractive and want to purchase it and profit also increase
And decrease in n product cost. When company give customer to new technology then automatic
increase the qualities and quantities to in selling sector and customer purchase new and new.
(Smith,2013.)
 Making image of the brand – some customer they don't know about the company then
they and when company spoiled her image automagically increase and having new image
customer things about they company and believing in that. Every company and
organization want to image and value in front of customer and market and innovation
gives it.
 Increasing in competition strength- when company give something new to public then
public will shift to this brand and attract to customer then increasing they value of brand
and competition ion also will increase in sales, profit cost, market value, they generate
profit and increasing also value and image also But competition also ingress competitors
also want having image in market and in front of customer then they also make
something new product. So day by day company increase in technology and other factors.
TASK 3
3.1 analyses the appropriateness of alternative strategies relating to market entry
A company want to enter in market then there are a variety of option to it. These are
worry with cost, risk and degree of control which can be exercised over them. A company
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delivered goods or services to a target market and distributions them there, when importing or
exporting services.
They having lots of substitutes like-
 Exporting -also use this strategy because the most traditional and well establish from of
operating in foreign market. In this company and organization sale they product in one
country to other country. But this is basally deepened on how a company present her self
in market. 3.2 Justify the selection of a strategy.(Henryand Lundberg, 2017) Joint venture strategy is good for the VW AG company because this company need to a
business partner to sharing terms and condition. In this company arrangement 2 or more
parties agree to tool their resources for the purpose for specific task and recently they
facing pollution related problem other componentry having the best technology best
employ to do more effect and they purpose of accomplished this helping to innocence in
product and develop lots of qualities in the product. Lots of advantage company having
these are-
 New expertise and insights- in this having then company having new opportunity gain
from insights and expertise. Market is now way easier for VW AG company to
understand given short term partnership.(Wolf, and Floyd 2017.)
 Both companies share risk and costs – in this VW AG company share the risk with other
company. That company is not alone to bewaring the cost of product. They 2 had
partners to share the expenses they both will also support to each other when having
losses.
 Temporary- a joint venture is temporary agreement between company and another, if this
and other company is ready for long time then it can shift.
 Better resource – joint venture is providing better resource to they company they having
cost, innovation, expertise and sharing partner of losses., technology new ideas. All this
equipment are used when a company is having and want to use it.
 More likely to succeed- VW AG company chances of success will be higher as they are
already riding brand. Credibility will be also increase.
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 Build relationship and network- when company is doing work separate them they having
some relation when business will be expand then relationship will be increases not only
in bossiness sector its increasing personal sector. In this case business can be expand
because in join venture cases one partner sale they businesses from other partners then
business will be expand.
 \these type a joint venture help to the VW AG company in success.
 Increment in specific market – they can increase when over target then they easily enter
market and sale the product to customer in international and national level.
 FRANCHISES- it is using another business firm in successful business model. It is
pendent on the success of the franchise. Franchises also having direct employee fdor they
sale product.
 Licensing – in this we can have some expanses on the product and sale of it. VW AG
company also having licenses for the sale product and they develop it. I trough this we
can operation and open the door to risk reduce manufacturing relations.
 Joint venture- in this 2 people share for ownership, rights and terms and condition of they
business and run with all things are in writing form. This strategy is very common in
entering in foreign market. It can be brought about the foreign investore showing an
interested in local company.
 Turnkey contract -this contract is very common in international businessmen this
including government or public sector as a buyer. It is having subcontract in different
phases and parts of the project.
 FRANCHISES- it is using another business firm in successful business model. It is
pendent on the success of the franchise. Franchises also having direct employee fdor they
sale product.
 Licensing – in this we can have some expanses on the product and sale of it. VW AG
company also having licenses for the sale product and they develop it. I trough this we
can operation and open the door to risk reduce manufacturing relations.
 Joint venture- in this 2 people share for ownership, rights and terms and condition of they
business and run with all things are in writing form. This strategy is very common in
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entering in foreign market. It can be brought about the foreign investore showing an
interested in local company.
Turnkey contract -this contract is very common in international businessmen this including
government or public sector as a buyer. It is having subcontract in different phases and parts of
the project.
3.2 Justify the selection of a strategy
Joint venture strategy is good for the VW AG company because this company need to a
business partner to sharing terms and condition. In this company arrangement 2 or more parties
agree to tool their resources for the purpose for specific task and recently they facing pollution
related problem other componentry having the best technology best employ to do more effect
and they purpose of accomplished this helping to innocence in product and develop lots of
qualities in the product. Lots of advantage company having these are- New expertise and insights- in this having then company having new opportunity gain
from insights and expertise. Market is now way easier for VW AG company to
understand given short term partnership. Both companies share risk and costs – in this VW AG company share the risk with other
company. That company is not alone to bewaring the cost of product. They 2 had
partners to share the expenses they both will also support to each other when having
losses. Temporary- a joint venture is temporary agreement between company and another, if this
and other company is ready for long time then it can shift. Better resource – joint venture is providing better resource to they company they having
cost, innovation, expertise and sharing partner of losses., technology new ideas. All this
equipment are used when a company is having and want to use it.(Short 2013) More likely to succeed- VW AG company chances of success will be higher as they are
already riding brand. Credibility will be also increase.
 Build relationship and network- when company is doing work separate them they having
some relation when business will be expand then relationship will be increases not only
in bossiness sector its increasing personal sector.(Haines 2016) In this case business can
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