Business Strategy Report: Analysis of VW AG's Strategic Planning

This report provides a comprehensive analysis of VW AG's business strategy. It begins with an introduction to business strategy and its importance, followed by an organizational audit that assesses VW AG's strengths, weaknesses, opportunities, and threats. An environmental audit explores external factors impacting the company. The report then examines stakeholder analysis, explaining its significance and the roles of various stakeholders like investors, suppliers, employees, customers, and the government. The analysis continues with a discussion of growth strategies, including substantive growth (mergers and acquisitions), limited growth (joint ventures), and retrenchment strategies, with a justification for selecting a substantive growth strategy. Finally, the report covers strategy implementation, outlining roles, responsibilities, resource requirements, and SMART targets for achieving the strategy, concluding with a summary of key findings and recommendations.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................3
2.1. Organisational audit for a given organisation......................................................................3
2.2. Environment audit for VW AG............................................................................................4
2.3 Explain the significance of stakeholder analysis..................................................................5
TASK 3............................................................................................................................................5
3.1 Strategies to substantive growth, limited growth or retrenchment:......................................5
3.2 Justify the selection of a strategy..........................................................................................6
TASK 4............................................................................................................................................7
4.1 Roles and responsibility for strategy implementation...........................................................7
4.2 Resource requirements for implementing a new strategy for VW AG.................................7
4.3 SMART targets to the achievement of strategy implementation in VW AG.......................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Every company make their business strategy. Business strategy refers that strategies
which help organisation to manage organisation goal, mission, objectives and extend business. A
business strategy is derived for a specific purpose to increase total productivity of organisation.
Company use strategic plan and theories to increase profit and sale. Company make effective
strategy plan to complete any task(Astrachan, 2010). Task should related with organisation work.
It can be sales task, internal and external analysis task and any other task which help in
organisation. It also describe about the company ability in context of market. Business strategy is
a tool of organisation which facilitate competitive advantage to organisation.
As dragons den is a British television series and many people watch this series. Series is
most popular on television but series maker want to increase popularity in society. Every show
organisation hire marketing manager to increase viewers and increase viewers subscription.
TASK 1
 This part is fully covered in PPT.
TASK 2
2.1. Organisational audit for a given organisation
When a company start their work so it have to make some plan and strategic strategy to
sale their product in market. These strategy to help company increase sales, identify about
market demand and other necessary things which can help to increase profit and revenue. A
company always do organisation audit to find out threats and opportunity available for company
in internal and external marketing environment(Liedtka, 2010). As Volkswagen company deals
in car manufacturing and face many problem. Company also face the government issue due to
use illegal software of emission check. Company should use proper software to remove that issue
and do organisation audit to remove more threat and grab market opportunity.
Strength Weakness
 Company has better control over the
competitive market.
 Company have positive image in
market.
 Use Proper emission check software.
 Company should make new policy and
software to use.

Opportunity Threat
 Company can make that cars which less
produce CO2.
 Make a relationship with non German
car manufactures.
 Rise in raw material price of company
product.
 Company earn 70% of its business
outside the euro zone and any
fluctuations in outside of euro zone so
company earn less profit.
This is the analysis of VW AG company. It describe about the company strength,
weakness, opportunity, threat(Hahn, Kolk, and Winn, 2010). Company make strategy to remove
the threat and get the new market opportunity.
2.2. Environment audit for VW AG
When a company work in dynamic environment so company have to face many
difficulties which can be related to both environment internal and external environment. As VW
Ag company work on global market. So company have to face many competitors and many other
issues related to market and related to government. These are the external factor which influence
the work of organization. Company make new strategy and develop new market plan to resolve
the issue(Martin, and Rice, 2010).
 Threat form new entrants:- It describe about the new companies which take place in
market and start business. Due to illegal software of emission checking their is chances
that customer purchase another company car.
 Threats from substitute:- The already existing companies product is the threat for VW
AG. Company require to update in their product.
 Bargaining power of buyer:- A buyer can influence the price of product and company
should manage the price according to buyer. As VW VG manage their price according to
global market and buyer perspective.
 Bargaining power of supplier:- A Supplier is the agent of company which describe
about market demand. As VW AG make their essential plan after consorting the demand
factor from supplier.

 Threats from Rivalry:- Competitors are major threat to business. A company always
care about their competitors. As VW AG company do competitor analysis to keep update
itself and update their product in market(.Hahn, Kolk, and Winn, 2010).
2.3 Explain the significance of stakeholder analysis
A stake holder is a person and party who interested in business. Company always care
about their stake holder. Stake holders are like the resources of company which help to sale
product and manage the work of organization. As VW AG is car manufacturing company and
supplier, creditor, directors, employees and others are the stake holder of company. Company
deal with all the stake holder and full fill the requirement of organization and stake holder. Stake
holder analysis involve a procedure which is as follow:-
Keep Satisfied
(most interested, most power)
These type of stake holder is fully satisfied
with business activity.
Manage Closely
(less interested, more power)
These type of stake holder are less satisfied but
they can adjust with their satisfaction level
according to business activity.
Monitor
(more interest, less power)
Provide adequate information to stake holder
and should assured that other issue does not
take place.
Keep Informed
(less interested, less power)
They just need only information about business
activity.
It is the Medlow’s matrix which describe about the behavior of stake holder with
company. As VW AG manage their stake holder and do analysis by this matrix method. Stake
holder are the most important thing to company (Auzair, S., 2011). Company always manage
their stake holder to full fill the resources of organization.
There are various stakeholders of cited business organization which played a significant role in
the success. These are given below:
Investors: In this category those people include which invest their money in to the company in
order to attain good returns. In the context of VW, which having a large number of shareholders
investing their money in to the firm. Therefore, it is responsibility of the cited business unit is to
provide relevant financial information which can attract them to invest their capital. The

significance of shareholder is played a prominent role in order to expand their business operation
in to other emerging market.
Suppliers: These are another stakeholder which provide raw materials, and financial resources to
the business organization so that they can running their operation smoothly. VW is having large
various suppliers who supply raw and other components to the company. Apart from that,
financial institutions such as banks which provide capital for expanding business operations.
Therefore, higher authorities required that to provide relevant information which shows their
performance and market situation.
Employees: Human resource is the valuable asset for each and every business unit which
contribute achieving organization goals and objectives. Thus, the cited firm can provide effective
training and development program on a regular basis. It can lead to enhanced their personal and
professional development which increase revenue and profitability of the company.
Customers: This is one of the critical and significant stakeholder of business corporation.
Customer is the king of the market which required to produce goods and services according to
their needs and demand. Therefore, VW can conduct market research over a period of time
which can help to identify changing needs of customer and improve products accordingly.
Government: Another stakeholder is related with the various authorities which can be related
with the tax department, environment department, legal department etc. This is the role for every
company is to follow guidelines provided by the government department. For example, VW
required to provide income and revenue information to the tax department on regular basis which
can create an ideal image in the market.

Figure 1VW Stakeholder

TASK 3
3.1 Strategies to substantive growth, limited growth or retrenchment:
Company use many type of strategy related to substantive growth, limited growth,
retrenchment. As VW AG also make market related strategy to complete a specific task and
manage the organization work. Company make effective strategy to expend their business and
analyze about their position in market. These strategy use by the top level of management in
organization and give instruction to implement that strategy. As VW AG also make strategy and
give instruction to all branches which are work on the behalf of compnay.
Substantive growth strategy: - This strategy refers two factor Merger and acquisition. It
show the company growth and how to expend company in market. As VW AG can use this
strategy to expend their business on global market. In merger condition two company make a
new company and both are responsible to profit and loss(Chang, and Chuang, 2011). In
acquisition case a big company acquire another small company and big company manage work
of organization. As VW AG can merge itself with another car company and acquire another car
manufacturing company or car product maker company to expend their business on global
market.
Limited growth strategy:- limited growth strategy refers the joint venture in
organization. Joint venture work as when two company come in front to work with each other to
do any specific task(Eccles, R.G. and Krzus, M.P., 2010). As VW AG also have option to make
a joint venture with other car company and increase sale. Company use joint venture to cover
market with the help of another company.
Retrenchment strategy:- Retrenchment strategy adopt by the sick business unit and for
remedial action. This strategy tell about that how can a company can improve their business and
remove all the issue of business unit. As VW AG also face software problem of emission testing
so company have option to change software with make a effective retrenchment strategy.
3.2 Justify the selection of a strategy
Substantive growth strategy: This strategy can be selected by the cited business organization
which can provide long term. VW is operating their business in to UK, where competition is
too high. It can reduce sales and profitability which is the common goal for every enterprise.
Therefore, with the help of substantive growth strategy, VW can expand their business in
emerging market. There is various emerging market such as India, China which can provide

consistent growth in the near future. For this there are two strategies which can be used by
cited corporation. These are:
Merger: - When two company merge with each other so it called merger condition. Two
business unit make one single unit (Martin, and Rice, 2010). In merger case both company have
ownership on single unit. Both company sign a contract of merger under the government and
decide their goal, profit ratio, finance ratio and many other ration which is necessary to describe.
As VW AG can merge with another company to expend business and improve the software of
company.
Greenfield investment: This is one of the most appropriate strategy where VW can
invest their money in to emerging market. For example, VW can expand their business in India
where demand is too good for them. apart from that, the cost of operation in India is very cheap
due to law labor rate.
This is the strategy which describe about that how can a company can improve their
business on global market. Company make rules and regulation to complete business task.
TASK 4
4.1 Roles and responsibility for strategy implementation
Every company have different kind of management which help to manage strategy and
make new strategy to complete any task(Cinquini, and Tenucci, 2010). Company management
make the strategy and effectively use that strategy in business unit.
 Top level management:- Top level management make the effective strategy and
complete the work. Top level management give instruction and suggestion to middle and
lower level management. Other level management implement that strategy and follow the
rules and regulation of particular strategy. As VW AG manage their business in all the
country so company top level management make the strategy implement that strategy.
These managers appoint executives of the firm who will implement all strategies. These
managers are also required to analyse the market analyses by proper evaluation and
critical analysis. For new mergers and acquisitions with other business organizations top
level managers of VW will develop special plans and policies related to development of

products and services in emerging market. They will also develop and create various
types of resources which are required for growth and developed of business activities.
Such as finance.
 Middle level management: - Middle level management take instruction from the top
level management and implement the strategy (Chang, and Chuang, 2011). As VW AG
middle level management manage branches in another country and directly connect with
company where company describe that what to do or not to do. They will execute policies
made by top level and plans out such type of activities which will be implemented at
lower level of business organization. They provide training to lower level managers and
also helps in developing various types of rules and regulations made for developing
business enterprises. As far as middle level managers are concerned they implement all
the strategies and plans which will help VW in developing business organization in
different countries.
 Lower level management: - Company also care about the lower level management.
Company include associates in lower level management. As VW AG manage their
business associates and lower level employee to complete work on time. Mechanics,
service labor also include in lower level management by company. They will perform all
the plans made by middle level executives and will develop business enterprises
according to customers’ requirements. They will use all the business objectives which
needs to be formulated and implemented to provide effective and efficient results to
business organizations.
4.2 Resource requirements for implementing a new strategy for VW AG
Resources are the key factor for every organization. When a company want to complete
any specific task so company have to manage their resources. Resources play a vital role for
organization. Company use many type of resources to innovate any product and update in
existing product. As VW AG can use many resources to implement an effective strategy in
business unit. These resources are as follow which is use by VW AG: -
 Financial resources: - Finance is the basic need of every organization which help
company to innovate new product (Burlton, 2010). Company always require finance to
complete the business activity. AS VW Ag want to innovate new car so engineers have to

do many research, purchase raw material and other finance related activity take place in
organization.
 Human resource:- All the company appoint human resource manager to fulfill the work
force in organization. Human resource manager appoint employee in organization and
describe about their role and responsibility in company(Hahn, Kolk, and Winn, 2010). It
is necessary process for company because without work force an entity can't survive in
market.
 Organization resource:- Many resources occur in organization. Which is used by
company to complete any task. These resources can be movable and unmovable. If VW
AG want to use organization resources so company have to do internal analysis to get
result.
Financial resources According to the selected business strategy
which is greenfield investment. The higher
authorities can be decided to invest $2.5 billion
in India next 5 years.
Human resources For their new car manufacturing plan, they
required approx. 1000 new staff in their new
selected market.
4.3 SMART targets to the achievement of strategy implementation in VW AG
Every company decide their smart objective to complete the organization work and any
specific task of organization. Company set their smart goals on their business category.
Company set their target to complete objective, mission, vision and goal. Smart target is very
helpful to company and fulfill the need of organization(Eccles, and Krzus, 2010.). Smart
objectives Many times company do analysis about market and competitors which describe about
the condition and position of competitors in market. After that company make strategy and
implement that strategy. As VW AG can make their smart targets to achievement in strategy
implementation. These are as follow:-
 Company should make effective strategy to implementation and get specific result from
that strategy.
 Company can motivate their employee to do work and achieve strategic task.

 Company should do analysis of internal and external environment because it is help ful to
find out resources and make a effective plan for organization
 Company should manage work force on global level market.
 Company should find out their competitors and analyses about their strategy and their
goal so company can modified itself and get the specific result from strategy
implementation(Campbell, Edgar, and Stonehouse, 2011).
 Company should make effective objective to complete the organization goal.
CONCLUSION
It report describe that how can a company decide their mission, vision, objective and
goal. Without decide these things company can't start their business. Company make strategy and
plan to complete task and achieve that task. This report focus on VW AG company which is very
big car manufacturing company on global market. This company follow all the rules and
regulation of strategic planning. VW AG company use different kind of strategy to complete task
and business plan. Company also have option to do organization audit, environment audit and
other internal, external analysis for organization and make effective strategy. Company also
make new strategy to implement. It describes also describe about stake holder who help the
organization as resources. Every company manage their stake holder. Many times company use
different types of strategy to expend their business in market. Company can use any strategy to
complete task. Company describe about the roles and responsibilities and many smart objectives
which help organization to implement an effective strategy.
REFERENCES
Book and Journals
Astrachan, J.H., 2010. Strategy in family business: Toward a multidimensional research agenda.
Journal of Family Business Strategy. 1(1). pp.6-14.
Auzair, S., 2011. The effect of business strategy and external environment on management
control systems: a study of Malaysian hotels. International Journal of Business and
Social Science. 2(13).
Burlton, R., 2010. Delivering business strategy through process management. In Handbook on
Business Process Management 2 (pp. 5-37). Springer Berlin Heidelberg.
Campbell, D., Edgar, D. and Stonehouse, G., 2011. Business strategy: an introduction. Palgrave
Macmillan.