Developing a Business Strategy for VW AG: An In-Depth Analysis Report

This report provides a comprehensive analysis of VW AG's business strategy, covering key areas such as organizational and environmental audits, stakeholder analysis, and strategic planning. The organizational audit uses SWOT analysis to evaluate VW AG's strengths, weaknesses, opportunities, and threats, while the environmental audit employs PEST analysis to assess political, economic, social, and technological factors affecting the company. Stakeholder analysis identifies and prioritizes key stakeholders, including customers, employees, shareholders, and government entities. The report also explores alternative strategies, such as market entry and substantive growth, and discusses the appropriateness of cost leadership and limited growth strategies for VW AG. Furthermore, it examines the roles and responsibilities of personnel involved in strategy implementation and estimates the resource requirements for a new strategy. The analysis aims to provide insights into how VW AG can achieve its goals and objectives in a competitive market.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
2.1 Organizational audit..............................................................................................................1
2.2 Environmental audit for VW AG..........................................................................................3
2.3 Stakeholder analysis..............................................................................................................4
2.4 New strategy for VW AG.....................................................................................................5
TASK 3............................................................................................................................................5
3.1 Appropriateness of alternative strategies..............................................................................5
3.2 Selection of a strategy...........................................................................................................6
TASK 4............................................................................................................................................7
4.1 Roles and responsibilities of personnel who are charged with strategy implementation......7
4.2 Estimated resource requirements for implementation a new strategy..................................8
4.3 Contribution of SMART targets............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..................................................................................................................................

INTRODUCTION
Business strategy is more important concept as it helps organization in accomplishing its
all goals and objectives in most effective and systematic way. With the help of this company
easily sustain in competitive market for long time period. It is an effective summary of all the
activities in which company achieve their goals and objectives in appropriate time period.
Implementation of business strategy is essential for company to get competitive advantage from
its rivals (Business Strategy, 2017). Along with this, it also define effective opportunities for
manager of the company to sale their products to increase their profitability level. It defines best
framework to their employees so that they perform their task in effective way and get best
results. Present report is based on VW AG, which is a automotive company. They operate their
business at various countries and also provide best auto mobile products to their customers in
order to improve their profitability level. Company mission, vision, objectives and core
competencies is discussed in their report. It also define the strategies plan which implement in
the business to achieve the organizational targets. Various planning techniques is also mentioned
in their assignment. Along with this, organizational and environmental audit is mentioned. At the
last of the report, analysis of stakeholder is also discussed in this project in order to get better
results in appropriate manner.
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TASK 1
Covered in PPT
TASK 2
2.1 Organizational audit
Organisational audit is that process which helps business enterprise in determining its all
existing strengths, weaknesses, future opp and threats. With the help of this concept, organisation
can easily find out those areas in which it can grow its business and also can increase its market
share. By taking help of organisational audit, Volkswagen can assess all those issues and
problems which can affect its profitability as well as productivity (Scholes, 2015). There are
various tools and techniques through which, this company can easily find out its all strong and
weak points. Most important managerial tool is SWOT analysis which s used by different
enterprises to determine their internal factors and current position in market place. SWOT
analysis of Volkswagen is follows as under:
Strengths: It involves those characteristics of company which makes it internal as well as
external strong. Strong points of Volkswagen given below:
 This organisation have such positive brand image in UK market
 It is known as one of the oldest car manufacturing company
 This organisation have high skilled employees (Teece, 2010).
 Effective promotional and advertisement activities
Weaknesses: In business enterprise there are various components which makes it weak as
compare to its market competitors. Different weaknesses of VW are follows as under:
 This company is facing various problems because of new market competitors
 Due to controversial issues its brand image has been affected.
 Poor management system
Opportunities: It are those areas in which Volkswagen can expand and grow its business:
 This company increase its organizational growth and development by expanding its
business into big markets such as Russian and Asian market
 By taking help of digital technology it can manufacture cars in most innovative and
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effective way which can increase its market share as well as customer base (Bharadwaj,
A. and et. al., 2013).
 By engaging in joint ventures it can make good relationship with German dealer which
can lead this company to high level of success
Threats: It are known as potential risks of company:
 Continuously changes in political issues is influencing such huge negative impact on
this company
 there are various laws has been enacted by government which restrict this company in
generating high financial profit.
Hence, these are the main strengths, weaknesses, opportunities and threats of
Volkswagen (Astrachan, 2010). For better growth and development it should give focus on its
weak points so that it can convert them into its strengths. By evaluating all these components,
this organisation can formulate and implement most effective strategy within its work place.
2.2 Environmental audit for VW AG
Just like internal factors, there are various macro environmental forces which also
influence huge impact on business operations (Meskendahl, 2010). So, it is highly important for
managers to consider their business environment and external forces while making any important
decision regarding company. Environmental audit is that aspect which helps enterprise in finding
all those issues and barriers which can affect organizational growth and development.
Volkswagen can take help of PEST analysis for identifying its all macro forces.
PEST analysis
Political factors: It involves those rules, regulations, laws or
legislations which is made by government. It is
highly important for Volkswagen to operate its
all business activities and practices according
to them otherwise it can suffer from huge
financial loss. After the Brexit, This company
have faced various problems because now ut
have to consider the legislations of of both UK
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and EU government.
Economical factors: Economic condition of country also influence
huge impact on business enterprise. In present
time, economic condition and income level of
UK is very good (Woodcock, N., Green, A.
and Starkey, M., 2011). People with good
income level mainly attracts towards expensive
car which is great opportunity for Volkswagen.
Social factors: It is highly important for all business enterprise
to consider social groups and their welfare
while implementing any new strategy and plan
within work place. By fulfilling CSR activities
this company can easily earn trust of its
customer but if it does not perform all those
activities then it can lose its brand image. So, it
is highly important for VW to consider social
welfare while operating its business activities
and practices (Montgomery, 2011).
Technological factors: In modern world, all organisations are
attracting towards digital technology as, it
helps them in producing innovative products
and services. By taking help of technical
forces, Volkswagen can manufacture
innovative car designs which can help it in
increasing its customer base because people
like to buy that care which have latest and
unique model.
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2.3 Stakeholder analysis
In business enterprise, stakeholders plays most important role. Without them, company
can not operate its business activities and also can not accomplish its desired goals. So, it is
highly important for All companies to consider their all stakeholders while formulating any new
strategy within work place (Campbell, Edgar and Stonehouse, 2011). Main stakeholder of
Volkswagen are customers, employees, shareholders, suppliers, government and so on. Before
creating and implementing any plan. Company needs to analyse its all stakeholders so that it can
make them satisfy. There is matrix which helps in managing all the stakeholders in most
effective and systematic manner.
KEEP SATISFIED
(High interested and more power)
MANAGE CLOSELY
(Less interested and more power)
There are various stakeholders which should
be highly satisfied by company and these are:
 Shareholders
 Employees
It involves those individuals whi should be
informed by company on regular basis and
these are
 Suppliers
 Legal bodies
MONITOR
(More interest and less power)
KEEP INFORMED
(Less interested and less power)
It involves those people which should be
informed by company within a set time interval
and they should be satisfied by company, these
are:
 Customers
 Financiers
Stakeholder which comes in this category plays
less important role and these are:
 Local community
Moreover, by evaluating above mentioned table it can be determined that which
stakeholder are more important and which are less important. But for better growth and
development of organisation it is highly important to give core attention to all stakeholders.
Shareholders are those person who invest their money in organisation to get better returns.
Without them company can not operate its business activities and practices. Employees are those
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person who contribute their hard efforts so that they can company can accomplish its all desired
goals and objectives. Suppliers are those people who provides raw material or inputs to
organisation so that it can manufacture goods and services or can convert inputs into outputs.
Government also plays important role in business enterprise because it makes various rules and
regulations which should be considered by all companies otherwise organisations can face huge
financial loss. Customer are key factors helps company in enhancing its profitability as well as
profitability. Financiers are those who provide funds to business enterprise and local people are
those who provides opportunities to company so that it can expand its business.
2.4 New strategy for VW AG
After analysing the micro and macro company use new and effective strategy to get better
success. Evaluation of internal and external factors is more important for the company because in
absences of this they can not able to implement the new strategy at workplace (Köseoglu And et.
al., 2013). In this context, VW AG adopt new strategies and implement in their organizational
process in order to resolve all the problems in effective manner. Company use cost leadership
strategy in which they easily services their products and service at lower cost which helps in
satisfying customers needs in appropriate manner. This will helps to those clients who are belong
to the middle families so that they easily afford their products and satisfy their needs. In this
company also face various problems like they have to pay penalty to the US agencies which
affect the organizational performance in negative manner. For resolve it company needs an
effective strategies in order to resolve it appropriately. They use limited growth strategy in which
they operate their activities with other organization. As per this company have diversify products
so that they easily attract large number of customers towards the products and services and get
their higher satisfaction. Hence, limited growth strategy is more effective for the company which
helps in improving the performance market place.
TASK 3
3.1 Appropriateness of alternative strategies
Alternative strategies helps in setting all the organizational goals and objectives in
effective manner (Khalili Shavarini and et. al., 2013). VW AG use various strategies in their
process which helps in expanding their business at international market. This company have lots
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of penalty because of its unethical practices, to solve its all problems it ca take helps of
alternative strategies which are as follows: Market entry: By using this strategy company expand their business in new market. For
this VW AG make a effective bound with local companies so that they easily enter in
new market in appropriate manner (Gollakota, Gupta and Bork, 2010). In this the
company planned a method for delivering their goods and services in new market for
improving their overall profitability in appropriate manner. VW AG also establishing
contract with foreign country for increase their sales and generate higher profitability. Substantive growth: For attain substantive growth, company make their own raw
materials which can helps in improving the productivity level in positive manner. In this
the company focus of the competitive strategy and also set their their best policies to
ensure their success against their rivals. The VW AG invest their money in those market
where easily sale are increase by promoting their services in front of target customers. Limited growth: This strategy used by those enterprise who have less capital for their
operational activities. For resolving this problem they tie up with other companies so that
they execute their process at market in effective way. VW AG use limited growth
strategies because their market is very limited and they fails in attracting large number of
audience toward their products and services.
 Retrenchment: This type of strategy is used by those company who have suffering from
high debts. In this case company offer discount for their products for the selling purpose
in order to maintain their profitability level. Due to high debt they reduce their financial
amount which impact on the company performance. This strategies used by the company
at this time when the sales turnover is decrease in the market. In this the VW AG use
effective strategies like cost reduction, asset reductions and revenue generation which
helps in maintain the profitability of the company in effective manner.
3.2 Selection of a strategy
Selection of effective strategy is more important for the VW AG so that they easily
capture large market share and get higher success. There is a huge penalty on VW AG which
create various problems for this company. In present time it have to pay penalty of approx
around $19 dollar because many time they have ignore environmental factors. So that VW AG
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use limited growth strategy which is more effective for the company (Slack, 2015). There are
some positive ways of selecting strategy are as follows:
 Limited growth strategies helps in protecting the available resource in effective manner.
 By using this company get better competitive advantage from its rivals.
Hence, limited growth strategy is more beneficial for the VW WG which aid in protecting all the
available resources in effective manner. With the help of this company easily take strong place in
competitive market place and also improve their performance in appropriate manner. By
implementing this strategy VW WG reduce their operational cost in order to increase the
profitability level at market place. One of the best advantage of implementing this strategy is to
make positive brand image at market place (Matzler and et. al., 2013). And also achieve all the
organizational goals and objectives in appropriate time period.
TASK 4
4.1 Roles and responsibilities of personnel who are charged with strategy implementation
An organization include various people in their business who set their specific goals and
objectives. All persons having their roles and responsibilities which helps them to operate all the
business activities in effective manner (Mehta and Mehta, 2011). In organization, manager and
employees both play important role in implementing new strategy which helps in achieving the
organizational goals and objectives in appropriate manner. All the persons play important role in
implementing the business strategy in best way. All these are as follows: Top level management: Senior management is one of the main part of the company in
which they set all the rules and regulation, policies for the company. They provide better
guidelines to their staff members in order to achieve the best results. When they
implement the new strategies then the senior manager as well as board of director make
some changes in their business plan which assist in improving the overall performance as
well as profitability of the company in appropriate manner. Managers: They play important role in the business organization at the time of
implementing the new strategy because they manage all the activities in appropriate
manner. They also communicate with their employees about all the roles and
responsibilities so that they all are aware about all the business aspect. At the time of
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implementation of new strategy, manager provide relevant and required information to all
the employees so that they easily preform their work and get best results. Engineers: They are those person who done all the required changes in their production
process because they having important responsibilities to update their machine which
lead in improving the profitability level at market place (Ibrahim, 2015).
 Research staff: This type of persons undertake various researches at the time of
implementing new strategies. It helps in identifying the market trends and customers taste
so that it helps in other department to take best decision in appropriate manner.
All these personnels are more important for the Azimo to get competitive advantage in market
place and also improve their goodwill in effective manner.
4.2 Estimated resource requirements for implementation a new strategy
VW AG is popular company in automotive sector which provide best car models in order
to attract large number of customers. With the help of financial support, better raw materials,
skilled as well as experienced employees, they manufacture unique and attractive cars model in
the market (Chu, KrishnaKumar and Khosla, 2014). In absence of these components company
can not able to implement new and effective strategy in their process. Financial support: Finance is more important for every activities. With out this company
can not able to operate their any kind of process and also fails in purchasing the raw
materials. So that proper fund is crucial for company to run there activities in smooth
manner. VW AG invest their lots of amount to the US environmental agencies. So that it
is important for the company to should be manage their financial resources in effective
manner. For example, They take financial support from issuing share and other bank
loan so that they execute their activities in appropriate manner. They also invest their
money in those funds which give higher return in which they easily take support form
other bank and financial institution. Human resources: For getting best success, skilled and experience employees are more
important because without these they can not able to make as well as produce quality
products and services. Company also fails in setting the organizational goals and
objectives in effective manner. At the time of implementing new strategy, company
should be include best human resource so that they perform their best and also helps to
the company to get best advantage. For example, they set their employees and also set
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their outlets in appropriate place in which they easily promote their services ion front of
their audience. For this they required skilled and experience employees for managing all
the activities in effective manner to achieve higher profitability in effective manner.
 Project team: VW AG divide their employees in various teams so that they perform their
work effectively. This helps to the company to operate their business activities in
effective manner and get best results in appropriate manner. So that with the help of
project team company easily implement their new strategies in order to achieve best
success at market place.
All these are more effective and important resources which helps to VW AG for
implementing the new strategy in effective manner. By using these elements company offer
better as well as attractive auto mobiles in order to improve their productivity in appropriate
manner (Svee, Giannoulis and Zdravkovic, 2011).
4.3 Contribution of SMART targets
Every organization wants to get better success. For this thy set their goals and objectives.
In this VW AG is a multinational company which manage their all the activities in appropriate
manner and also make better relationship with their customers. With the help of this they easily
improve their brand image at market place. They have limited resources so that some time they
fails in attracting large number of customers. For this they set their SMART target which helps
in improving the overall growth of the company. Specific: It is also important for the company to set their specific goals and objectives so
that they easily attain higher success at market place. So that target should be clear and
specific in order to get success. Measurable: It is also important for the company that all the target should be measurable
so that VW AG easily identifying their actual performance in effective manner. For this
they undertake various research to evaluate customers demand and after that set their
target in order to improve their brand image at market place (Butler, 2012). Attainable: It is important for the company to set their target effective which were easily
attainable by the employees so that they take string place at market place. For this VW
AG dived their employees in various groups so that they get desirable goals and
objectives in effective manner.
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