BUS300: Strategic Analysis and Planning Report on Volkswagen

This report provides a comprehensive strategic analysis of Volkswagen, examining its operational procedures and growth strategies. It begins with an introduction to strategic analysis and planning, emphasizing its importance in achieving organizational goals. The main body of the report delves into a resource audit, assessing both tangible and intangible assets, and evaluates Volkswagen's value systems, highlighting ethical considerations and customer retention strategies. The report then analyzes Volkswagen's product or service portfolio using the BCG Matrix, categorizing its products as Cash Cows, Stars, Question Marks, and Dogs, and assesses the implications of each category. Furthermore, it explores potential future strategic growth options using the Ansoff Matrix, including market development, market penetration, product development, and diversification strategies. The report concludes with an evaluation of options and an overall analysis of VW, offering insights into how Volkswagen can achieve sustainable growth and market success, supported by references for further reading.

Strategic Analysis and
Planning

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Resource Audit............................................................................................................................1
Value Systems.............................................................................................................................3
Product or Service portfolio including BCG Matrix...................................................................4
Potential future strategic growth.................................................................................................5
Identification of options..............................................................................................................6
Evaluation of options..................................................................................................................7
Analysis on VW..........................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10
.......................................................................................................................................................11

INTRODUCTION
Strategic Analysis and Planning refers to an effective procedure or developing shared
goal in order to achieve better growth of an organisation in future. It involves the criterion of
making strategies decision to boost up productivity as well as profitability of specific brand.
Moreover, it also involves to develop effective as well as efficient plan of action in order to
sustain strong position in market in terms of grabbing more profits share in proper manner
(CHUANG and Liao, 2010). The present report is Volkswagen which is a German auto maker
founded in the year around 1937, almost 81 years ago. It has approximately €76.729 billion
revenue and 117400 staff members are working in this organisation in different branches on
regular basis to conduct operational procedure properly. This assignment will focus on resources
audit, value systems and potential products or services portfolio in context of given company. It
will also include discussion about strategies fro future growth through identifying beneficial
options along with evaluating their effectiveness to gain success in future is described below.
MAIN BODY
Resource Audit
The resource audit can be described as a process of determine required sources along
with checking available of the same in organisation. There are various kinds if tangible and
intangible resources which are required to be evaluated thoroughly for conducting manufacturing
appropriately without relevant issue. Meanwhile, it include to identify actual resources and
needed ones in specific amount to carrying out operational activities or procedures in terms of
producing desired units of product according to demand of the same in market. However,
resource audit provide support to know about actual requirements of sources to be collected for
further conducting manufacturing goods in proper manner (Doz and Kosonen, 2010). In case of
Volkswagen, they are required to conduct resource audit in respect of gathering needed amount
of the same for further production by analysing different resources in which few of them are as
under –
Physical Resources – This can be explained as physical sources such as equipments,
machineries, inventory, building, land and many more which provide support in production
process. However, these physical sources are required to carrying out different types of
operational activities or procedures in terms of producing goods of better quality in desired
1

period of time. In addition to this, Volkswagen is required to established more effective physical
resource like advanced technological equipments and machines in order to manufacture goods of
desired quality at reasonable price in limited duration to satisfy requirements of clients.
(Source: Williams, 2018)
Financial Resources – The financial resources include all these sources from which an
organisation can borrow required amount of money to conduct overall operations or apply
technical change at work. However, it is helpful to increase effectiveness of production process
along with implementing new features to products in terms of achieving more number of
customers for brand (Eden and Ackermann, 2013). In case of Volkswagen, they can audit
financial resources and put efforts to collect desired amount of funds as per present requirements
along with studying previous finance information of company.
Human Resources – This can be described about staff members of an organisation who
are considered as back bone of every organisation because their efforts are always there behind
success of business. It involve to hire more efficient employees by thoroughly evaluating their
skills, knowledge and abilities for specific designation. Moreover, it is necessary to allocate tasks
as per field of expertise of an individual so that they can perform comfortably and maximum
2

outcomes can be achieved their efforts regularly. In context of Volkswagen, they should appoint
efficient candidates for respective positions in company and distribute tasks accordingly which
facilitate to gain better outcomes to complete desired targets in perfect manner.
Value Systems
The value systems refers to specific concept of every organisation according to which
everything should be done on ethical manner. It indicates about to more focus on ethical values
rather then other aspects in order to make sure that each activity is required to be carried will bee
ethically correct (Freeman, 2010). However, it is essential to follow ethics while producing
products or displaying promotional advertisements because their provide support to gain profits
in long term and highly beneficial for goodwill of brand. Moreover, there are several standards
for an individual and guidelines which are required to be flowed by people working in
Volkswagen to obey ethical values for attaining long term profits. At the other hand, it has been
analysed that given company only focus on manufacturing of cars for making more money in
previous scenario. They always have motive to increase their profits whereas in present situation
they focus on strategies to retain their customers for along time in respect of attaining their
loyalty towards the brand in appropriate manner.
The value systems in organisations are all about ethical values which ate beneficial to
retain people with brand for a ling time and helps to boost up goodwill in market. On the basis
of brand image, more customers get attracted towards it which facilitate to increase sales and
profits of company. Meanwhile, there are several factors which can be considered in value
systems of different businesses such as environment, culture, products, services, values, health
and safety and so on (Gooner, Morgan and Perreault, 2011). At the other hand ethics is not only
followed while dealing with clients but also consider at the time of providing benefits to staff
members of organisation. In addition to this, the Volkswagen should provide better quality of
products to people at easily affordable prices and also fulfil desires of employees working with
them. Further more, customers are helpful to improve brand image and workers are important
because they put efforts for success of business.
Ethical value systems is profitable because it helps to make people loyal for brand but it
will take more duration of time to achieve the same. At the other hand, ethics may facilitate to
gain limited profits for business for long period of time as ethical values ensure to make correct
decisions while providing products of people. Moreover, concept of corporate behaviour and
3

values are intrinsic qualities which motivates to focus on social factors as well as believe in truly
important aspects while making any decision of business.
Product or Service portfolio including BCG Matrix
The product or services portfolio can be explained as collection of overall goods or
facilities which are offered by an organisation to people in order to fulfil their actual needs and
demands. It include to thoroughly analysing product portfolio as it renders opinions on stock
type, company growth prospects, profit margin drivers, income contributions, market leadership
and operational risks (Greco, Cricelli and Grimaldi, 2013). However. It is necessary to focus on
these factors as they helps to make more effective as well as efficient strategies to reduce risk
and gain maximum profits with achieving growth of business by improving profit share in
market. In case of Volkswagen, they are required to evaluate product portfolio by using an
appropriate strategy to further attain success of business.
BCG Matrix of Volkswagen Group
Cash Cows – This stage involves high market and share and low market growth in which
company has sustained at fixed position by earning sufficient profit but not able to growth their
business. It include that company is much capable to achieve better profitability but they do not
have more effective as well as efficient growth opportunities to further carried away business ate
higher level. Moreover, some of products take a prime position in terms of getting a high return
of investment in proper manner. For example, the case cow is considered as an evident form of
Porsche with around 21,674 € million annual sale revenue and Audi has 60,128 € million
revenue recorded.
Stars – The star stage of BCG matrix can be described about situation of products having
high market share as well as high market growth. In this position, they have several opportunities
in order to garb more profits share in market along with facilitating growth of business
successfully (Grewal, Janakiraman and Tolerico, 2010). However, star position of products can
be considered as best chances as it provides favourable condition of increasing profits with
attaining better growth. In context of Volkswagen, SKODA had recently gained a higher ratio of
sales in comparison with Audi and the sales revenue for the car has been increased fro m 8894 €
million to 9892 € million.
Question Marks – This stage include low market share and high market growth which
create confusion about utilising opportunities as well as improve investment of funds because it
4

is not clear about making beneficial decision. It involves that it is not sure about to consider
specific product to increase profit as the growth is up to the mark but profitability is not much
sufficient as per investment. In case of Volkswagen, the overall financial performance of Bentley
has declined from past few years (Hill, Jones and Schilling, 2014). At the other hand, one more
question mark is Volkswagen Golf i.e., E- golf has potentially profitable in future but it is
required to ensure about decision that it should be a part of financial investment or not.
Dogs – This factors involves low market share and low market growth which describe
about weak market position as well as difficult to make profits. There are certain products faced
dog stage of BCG matrix do not able to earn profit and not attain growth which are not beneficial
for business. Moreover, in case of Volkswagen company, dog is VW Beetle because chance for
its growth are not likely to be significant as comparison to other passenger or luxury cars.
Additionally, the company is only able to sell around 15000 Beetles which shows a sharp decline
in demand of auto mobile.
Potential future strategic growth
The potential future strategic growth of business is required to use more appropriate
strategy in order to gain growth and success in forthcoming time. It include to make more
effective as well as efficient policies or techniques by utilising accurate models to apply changes
or introducing fresh concept for achieving more profit share of market properly. However, it is
helpful for Volkswagen to use Ansoff matrix in order to attain potential future strategic growth
which are explained further –
Market Development – The market penetration can be described as to utilisation of
existing products or facilities in different geographic areas which helps to gain more number of
customers and spread brand in other countries as well. It can be done by different customer
segments, make entry in foreign markets and sell goods in new areas (Hitt, Ireland and
Hoskisson, 2012). In context of Volkswagen, the can use this strategy in respect of increasing
profits and expand brand at different market places successfully.
Market penetration – This strategy focus on increasing sales of current products or
services by making effective policies to attract customers in same market place. It can include
reducing price, improve promotion, acquisition of rival in similar market and modest product
refinements. Moreover, Volkswagen can apply this strategy to boost up sales or present products
in market for increasing profitability which facilitate to attain growth of business.
5

Product development – The product development refers to introduce new product with
fresh and innovative concepts in existing market for fulfilling aim of achieving growth. In
addition to this, Volkswagen can research to develop new products or joint development with
other company in order to attain better profits and growth.
Diversification – In this part, it include to introduce new product in fresh market place in
terms of growing market share in proper manner. It involves more risk factors because both
product and market development is required to achieve desired outcomes of efforts for the same
(Hodgkinson and Healey, 2011). The Volkswagen can apply this strategy by launching fresh
food with innovative idea to gain more profits.
At last but not the least, most favourable strategy is diversification for Volkswagen
Groups as they can launch an electric car through utilising advanced technology along with
adding effective feature in the same. It is helpful to grab more market share as well as growth of
business by increasing number of customers and profits.
Identification of options
It is important for Volkswagen to identify actual feasible growth opportunities in order to
enhance their profitability. As per the above stated Ansoff matrix, it has been identified that
product development is the best option for the mentioned company in order to increase their
business growth. In this Volkswagen can launch electric car in the existing market so that
customers can use environment friendly vehicles. Product development refers to the situation in
which organisation introduces completely in new product in existing market. This kind of growth
opportunity is beneficial for Volkswagen, as the company is already successful across the world.
It can be said that even though company is not familiar with new product but it is easier for
organisation to persuade its customer in existing market (Mudambi and Venzin, 2010).
Apart from this, it can be that Volkswagen can also expand its product portfolio which
will increase number of option for customers. The company should launch electric cars in the
developed countries, where people are mainly facing problem of traffic. As a result, the option of
new product that is helpful for organisation as customers will give more preference to it because
of its new feature. Electric cars are beneficial for environment as it not polluting external
environment.
6

Evaluation of options
Introducing an electric car is beneficial for Volkswagen as it will help company in
increasing influence of customers towards it new products in existing market. As per the
analysis, it can be said that electric cars are environmental friendly as it does not place any harm
to the surrounding area. Electric cars are quite expensive for the customers but not more then
cars. It is necessary to analyse actual market demand in specific geographic area to make sure
about success of new product of given company (Poister, 2010). Moreover, it is important to
analyse external environment factors by carried out PESTEL analysis to avoid problems and
facilitate growth of fresh products of given organisation.
Political factor – This can be described about various kinds of rules and regulations
made by government authorities which are required to be monitored by organisations and put
efforts top fulfil them immediately. In context of Volkswagen, they are required thoroughly
analyse political stability of specific geographical place which is essential to enhance business
there in order to earn better profits through fresh product.
Economic factor – The economic factor include GDP, inflation, growth rate, interest
rate, currency and so on which directly impacts on organisation in respect of profitability of
business. In case of Volkswagen, they are required to analyse overall these factors to put
appropriate steps in order to maintain profit margin of company along with increasing sales of
new product properly.
Social factor – This can be explained about different needs, demands, income, culture,
lifestyle and many more which are responsible for their dissimilar desires. It will create issue of
organisation because they should fulfil overall demands of different customers by launching
single product through adding innovative features in the same by Volkswagen.
Technological factor - There are various kinds of advanced technological software,
applications, machines and equipments are invented which are beneficial to reduce time of
production (Swayne, Duncan and Ginter, 2012). It will facilitate to reduce several threats and
boost up productivity on regular basis to fulfil desired needs of clients in proper manner by
Volkswagen.
Environmental factor – This includes various environment issues such as pollution,
ozone depletion, global worming etc. which takes place due to toxic release of gases or other
chemicals from production area of company. In context of Volkswagen, they are required to
7

focus of relevant problems and put efforts towards the same by releasing poisonous chemicals by
treating them properly along with following strict rules for nature by government of particular
area to avoid negative legal actions.
Legal factor – This involve various kinds of legal acts of specific county where company
is going to launch new product of electric car to follow them in appropriate way. It include
Health and safety Act, Equality Act and many more which should be followed by given
company while establishing business in different place to avoid legal problems along with
increasing profits of business successfully.
Analysis on VW
The analysis of Volkswagen is essential in order to evaluate various strengths,
weaknesses, opportunities and threats to put appropriate actions at desired time. It will provide
support to utilise strengths and opportunities in effective manner to achieve better profits by
improving brand image and quality of product. SWOT analysis if helpful to ensure about taking
correct steps for welfare of company which is given below –
Strengths – The strengths of Volkswagens include that it has wide range of cars which
provide enough options to choose from them. Moreover, it is considered as one of the oldest car
manufacturer having better reputation which results into improved reach to masses.
Weaknesses – This involves that Volkswagen has intense competition among different
car manufacturing companies at global level. It include unfavourable production facilities which
requires advancement due to which threats are observed on product.
Opportunities – Volkswagen has an opportunity because they create long term relation
with non German car producers and known for implementing innovative ideas on regular basis
to stand in competition. It include that they can attract numerous new investors due to its very
good results on stock exchange.
Threats – The Volkswagen have threat that their innovative features are included by
competitive firms and increased fuel cost of their vehicles. The rising oil and raw material prices
in the world market which is responsible for reducing profit margin respectively.
CONCLUSION
From the above report, it has been conclude that strategic analysis and planning can be
described as to an effective procedure or developing shared goal in order to achieve better
8

growth of business. It involves various strategies by utilising various model such as BCG matrix
and Ansoff Matrix to make effective techniques in respect of increasing profitability to attain
further growth of business in future. Moreover, it is required for given company to conduct
internal and external analysis if desired factors to ensure about success of new product by
conducting PESTEL and SWOT analysis to determine favourable element for business to make
appropriate plan of action.
9

REFERENCES
Books and Journals:
CHUANG, C.H. and Liao, H.U.I., 2010. Strategic human resource management in service
context: Taking care of business by taking care of employees and customers. Personnel
Psychology. 63(1). pp.153-196.
Doz, Y.L. and Kosonen, M., 2010. Embedding strategic agility: A leadership agenda for
accelerating business model renewal. Long range planning. 43(2). pp.370-382.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge University
Press.
Gooner, R.A., Morgan, N.A. and Perreault Jr, W.D., 2011. Is retail category management worth
the effort (and does a category captain help or hinder)?. Journal of Marketing. 75(5).
pp.18-33.
Greco, M., Cricelli, L. and Grimaldi, M., 2013. A strategic management framework of tangible
and intangible assets. European Management Journal. 31(1). pp.55-66.
Grewal, D., Janakiraman, R. and Tolerico, S., 2010. Strategic online and offline retail pricing: a
review and research agenda. Journal of Interactive Marketing. 24(2) .pp.138-154.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Hodgkinson, G.P. and Healey, M.P., 2011. Psychological foundations of dynamic capabilities:
reflexion and reflection in strategic management. Strategic Management Journal.
32(13). pp.1500-1516.
Mudambi, R. and Venzin, M., 2010. The strategic nexus of offshoring and outsourcing decisions.
Journal of Management Studies. 47(8). pp.1510-1533.
Poister, T.H., 2010. The future of strategic planning in the public sector: Linking strategic
management and performance. Public Administration Review. 70(s1).
Swayne, L.E., Duncan, W.J. and Ginter, P.M., 2012. Strategic management of health care
organizations. John Wiley & Sons.
Online
Resource audit. 2018. [Online]. Available through: <https://slideplayer.com/slide/6328145/>
10

11