Business Strategy Analysis

TASK 1

1.1 Asses how business objectives and core competencies inform strategic planning when formulating strategic plans

Volkswagen is in the automotive industry and they are planning to expand their business in some countries of the United Kingdom so that they can create a strong base of customers. When the company makes a plan to implement its strategy then it focuses on the mission, vision, objectives, goals and core competencies so that the plan can be implemented in an effective manner (Teece, 2010). The business plan can be presented to the Dragon Den which is a TV show. Through this, the enterprise will be able to get an opportunity to attract a number of investors.

• Mission: This is a kind of statement which is made by the business organization and this shows their goals and targets. Along with this, it describes their purpose why they established their business and how they will achieve their vision (Godwin, Kalapana and Valli, 2013). For example, the mission statement of Volkswagen is to make long-term strategies to improve their relations with the customers and provide them with quality services.

• Vision: This depicts the future of the company what they want and where they will operate. This also identifies the potential benefits and growth of the company. For example, the vision statement of Volkswagen is to make the company more innovative and offer services throughout the world.   
• Goal and objectives: The Organization set some objectives and goals to improve its growth and position in the market. Objectives are short term and goals are long term. Here, the goal of the company is to expand the business in the United Kingdom and attract more customers throughout the world. The objectives are to offer quality services to the customers so that their level of satisfaction can be increased.
• Core competencies: These are related to skills and special qualities of the business organization so that they can achieve a competitive advantage in the market. Some of the core competencies of Volkswagen are distribution, manufacturing process and so on. Through these, they will be able to get success (What Is a Business Strategy?. 2017).

1.2 Factors that have to be considered when formulating a strategic plan

At the time of developing their plan then there are many factors which may affect strategic planning of the company (Bharadwaj and et.al., 2013). Strategic planning is a process that is used by Volkswagen to improve their growth. Some of the factors are as follows:

Internal factors: These factors are related to the policies, culture and strategies of the organization. When the firm develops its plan then it should focus on these factors so that plan can be made in an efficient manner. Along with this, the plan should be based on the values and beliefs of Volkswagen.

External factors: These are also known as the macro factors which are not in control of the organization. Some of the external factors are political, economic, social, technological, competitors and so on (Srdjevic, Bajcetic and Srdjevic, 2012). These are:

• Political factors are related to laws and policies that are made by the state government of the country. The manager has to make a plan on the basis of rules and regulations so that overall performance can be improved.
• Economical factors are related to the wealth of the country and this will also affect business operations of the firm due to unemployment, interest rate and so on.
• Social factors are focused on the tastes and interests of the consumers. So, when the plan is made by the manager of Volkswagen they should made the products as per thedemand and need of the customers so they will be able to increase their profits.  
• The technological field is related to innovation in the services that they offer to their customers. New ideas should be incorporated by the enterprise so that they can attract a number of customers towards their services.
• Competitors are the rival firms which can affect the strategic plan of the enterprise. Volkswagen should know about the policies and strategies of another market player only then can they sustain their competitive advantage.  

1.3 Evaluate the effectiveness of techniques used when developing strategic business plans

The manager of Volkswagen uses many techniques to develop strategic business plans so that they can expand their business in the United Kingdom (Meskendahl, 2010). Some of the techniques are:

SWOT analysis: SWOT stands for strengths, weaknesses, opportunities and threats. Through this model, Volkswagen will be able to identify its internal and external factors so that the strategic plan can be made successful (Slater, Olson and Finnegan, 2011). Through this, they will be able to identify opportunities which help in achieving competitive advantage. In order to achieve this, they can use their strength and can overcome all their weaknesses. This is an effective technique that is used by the enterprise so that they can expand their business in London in an efficient manner. The advantage of this approach is that through this, the companies brand image can be improved. Along with this, they can make plans to remove all the threats and weaknesses (What Is a SWOT Analysis?. 2017).

Porter five force model: This is another tool that is used by the organization to identify the factors which can affect the strategic plans of the company. This model is based on some elements such as the bargaining power of the buyer and the bargaining power of the supplier, the threat from new entrants, the threat from substitutes and inter-firm rivalry. The advantage of this approach is that through this they will be able to identify their status in the market. It also helps the automotive industry in identifying the bargaining power of suppliers and buyers, threats from new businesses and threats from competitors.

TASK 2

2.1 Analyse the strategic positioning of VW AG by carrying out an organizational audit

The organizational audit is used by strategic planner manager of New Phoenix so that they will be able to analyse the position of VW AG in the market. The audit can be conducted for the automotive industry by using the SWOT model which stands for strengths, weaknesses, opportunities and threats (Woodcock, Green and Starkey, 2011). Through this, he can identify their internal strength and weaknesses as well as external opportunities and threats.   

Strength: These are the characteristics of the business organization and on the basis of these they will be able to gain benefits than any other market player.

• The company have a good brand image in the market than any other automotive industry.  
• Volkswagen is the owner of many big car manufacturing industries so they have a large customer base.
• They have approx 350, 000 employees who offer quality services to their customers.
• The enterprise has joint ventures with companies in China such as FAW Volkswagen and Shanghai Volkswagen.

Weaknesses: These are the characteristics of the companies which can degrade their performance. Some of the weaknesses are:

• There is higher competition among all the car manufacturing industries so the market share of Volkswagen is low.
• Their global brand image is also reduced due to the emission scandal.

Opportunities: These are related to the external factors through which they will be able to gain a competitive advantage in the market.

• Volkswagen can create a relationship with the other car manufacturing industries.
• The enterprise can use modern technological advancements so they will be able to attract a number of customers towards their innovative products.
• They can improve their global brand image by offering more innovative products in the new market.

Threat: These are the elements that can degrade the performance of the company and some of these factors are:

• Competitors can also use innovative strategies in order to attract customers towards their services so this will affect the market share of Volkswagen.
• If the price of fuel is increased then due to this the purchase of car will be reduced.

2.2 Environment audit for VW AG

Environment audit is a tool that is used by organizations so that they will be able to identify their position in the market (Parnell, J.A. And et.al., 2012). Through this, the strategic planner will be able to analyse the external factors that may affect the strategies of Volkswagen. For this, the PESTLE model can be used and this is stands for political, economic, social, technological, legal and environmental. These are:

Political: These factors are related to trade barriers, tax policies, environmental laws and so on. For example, Volkswagen offers its services in approximately 150 countries so they are facing some political issues in its development. They make their strategies according to the political situation of the countries because different places have different political situations.

Economical: These factors are related to the income, unemployment, and interest rate of a particular country. For example, the car manufacturing industry contributes to the national income of the country. Economic debt crisis degrades the performance of the enterprise because when people don't have money then they will not purchase a car (Montgomery, 2011).

Social: The automotive industry changes the living standards of the people who are living in a country. Volkswagen gives employment to a number of people so due to this, the employment rate is also increased in the country. Along with this, consumers are purchasing the car in order to maintain their social status.

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Technological: Technological advancements play an important role in the success of  Volkswagen. They are providing many high-tech cars such as Audi and Bentley. The sales of the car manufacturing industry is also increasing due to their innovative products.

Legal: This is a challenge for Volkswagen to follow all the legal laws that are made by the state government as they are offering their services within 150 countries. Some of these regulations are related to the Consumer Protection Act, health and safety laws and so on.

Environment: Car manufacturing industries affect the environment of the country as they are using diesel and petrol as fuel. Volkswagen has many manufacturing plants in different countries so due to these air pollution is increasing (Reich and Benbasat, 2013). They have to take care of the environment of the nation so that the health of the people can be ensured.   

2.3 Assess the significance of stakeholder analysis

Stakeholder analysis can be used by the strategic planner of New Phoenix. Through this, he will be able to identify the role of stakeholders in the decision-making process (Verbeke, 2013). It is a systematic process that involves some steps such as:

In the first step, the strategic planner will be able to identify the people who are involved in the business activities of Volkswagen and who are affected due to the operations of the enterprise.

In the second step,  he has to identify the needs and interests of the different stakeholders. For this, he can use stakeholder mapping. People with high power and high interest are closely associated with the company and they also promote the services of the automotive industry. On the other hand, people with low power and low interest are not influenced by the business operations of the firm.

In the last step of stakeholder analysis, the company develop a good understanding of the stakeholders of the firm. The industry can also take feedback from them so that overall performance can be improved.  

Through the stakeholder analysis, the firm will be able to identify the contribution of the people in the decision-making process. Along with this, the core competencies of the workers can be identified.

2.4 Present a new strategy for VW AG

VW AG can offer its products in the new market in order to attract a number of customers towards their services (Cinquini and Tenucci, 2010). Volkswagen can follow market development and product development strategies. In the first strategy, the automotive industry can offer their current products in a new market such as London. Through this, they will be able to improve their growth in the country than any other market leader. In another strategy, the firm can offer new products in the existing market in order to convert the regular customer into a loyal consumer.

Volkswagen can use Porter's generic strategy in order to develop new products in the market. The Porter generic strategy focuses on cost, differentiation and focus. In the first strategy, they are focused on the cost of their products through this they will be able to achieve cost leadership in the market (Hoejmose, Brammer and Millington, 2013). In the differentiation approach, the firm focuses on unique features so that they will be able to attract loyal customers towards its services. On the basis of focus strategy, they are focused on the people who are price sensitive but looking for unique products. So, the VW AG should follow a differentiation strategy because through this they will be able to generate more revenues.

TASK 3

3.1 Analyse the appropriateness of alternative strategies related to market entry, substantive growth, limited growth and retrenchment

 Volkswagen can use alternative strategies in order to improve its brand image and growth in the market. These strategies are:

Market entry: This is an effective strategy that is used by the organization in order to develop its services in another market (Pagani, 2013). Through this strategy, the firm will be able to increase its market share. Some of the market entry strategies are merger, acquisition, joint ventures, strategic alliances, licensing and franchising.

Substantive growth: This is a strategy that is used by the organization so that they can attract a number of customers towards their services. Through this, they will be able to improve their growth in an effective manner. For this, the car manufacturing industry can use diversification and vertical and horizontal integration. VM AG can offer their new products to the new market.

Limited growth: These strategies can be used by the business organization and through this they can resolve all the issues and handle adverse situations (Boyer, J. and et.al., 2010.). These can be performed when companies are facing financial loss and when they will not be able to increase their profits. Some of the strategies that are performance by Volkswagen are market penetration, market development and product development.  

Retrenchment: This strategy can be used by the organization when they are not able to increase their market share. Here, they can use some of the strategies such as divestment, liquidation and turnaround. Along with this, they will be able to manage their resources and offer services to the people in order to increase the satisfaction among all the customers.  

3.2 Justify the selection of a strategy

The main aim of Volkswagen is to expand the business in some countries of the UK such as London so that they can increase their share and brand image. In order to expand their business they can use a market development strategy (Connor and Lande, 2012). With this strategy, the car manufacturing industry can offer its current products to the existing market. They will be able to attract new customers towards their services and along with this they can build a strong base of service users. VG AG can use strategic alliances and joint ventures in order to enter into the new market. Through this, they will be able to generate more revenues so that overall performance can be improved. After that, they can use product development in order to differentiate their services from other car manufacturing industries. Further, they will be able to attract loyal people towards their goods (What is Business Strategy?. 2017).

TASK 4    

4.1 Assess the roles and responsibilities of personnel who are charged with strategy implementation

When an organization implement a strategy then they need personnel who can help the firm in improving their growth. It is the responsibility of the person who can divide the work among all the people as per their role and level in the enterprise (Burlton, 2010). The major roles of the personnel are:

• It is the responsibility of the person to communicate all the strategies in the department so that they can achieve their specified goals.
• The person should know about the aim behind all the strategies so that he can easily convince the workers of what they have to do.
• It is the responsibility of the personnel to improve the relations among all the people so that trust can be built among them and overall performance can be improved.
• He has to involve a number of people in the process of strategic implementation so that all employees will be able to enhance their core competencies and through this communication gap among all the staff members can be reduced.
• The distribution and allocation of the resources should be proper so that Volkswagen will be able to generate revenues in an efficient manner.
• He has to monitor the process of strategic implementation on a continuous basis so that the firm will be able to achieve its objectives in order to achieve success. Along with this, he should know that what is going to next and how these strategies can be implemented so that future goals can be achieved.  
• He has to identify how strategies are implemented by the employees in an efficient manner or not so that overall performance can be improved.

4.2 Analyse the estimated resource requirements for implementing a new strategy for VW AG

When strategies are implemented by the organization then in order to implement those strategies they need some resources such as human, financial, raw material and technological. The enterprise will not be able to implement the strategies in an efficient manner without these resources. Some of these are:

Human resources: Employees are an important asset of the business organization. The firm has to retain its employees so that they can improve their performance and enhance their growth so that profits can be increased (Reinhardt and Stavins, 2010). All the human resources should be innovative or creative. It is the responsibility of the manager to provide training and development to the staff members so that they will be able to offer quality services to the customers.

Financial resources: These resources are necessary in order to make the strategy effective so that they can improve their growth. Through these, the company will be able to buy the raw materials and pay the wages to their employees so that overall performance can be improved.

Raw material: In order to manufacture the car, the company have to use some raw materials so that an effective product can be made (Hsieh and Chen, 2011). Along with this, they have to purchase the high-quality material so that the luxury product can be made. Through innovative and luxury services the enterprise will be able to attract a number of people towards their services.  

4.3 Evaluate the contribution of SMART targets to the achievement of strategy implementation

 Volkswagen can use the SMART targets in order to set the objectives so that all objectives can be achieved in an efficient manner (Verreynne and Meyer, 2010). SMART objectives stand for specific, measurable, achievable, realistic and time bound. These are:

• Specific targets are related to the objectives such as to increase the market share and profits of  Volkswagen. For example, the car manufacturing company can set the goal to increase the market share by 5%.
• Measurable targets are related to numeric terms and these should have some meaning so that in an efficient manner the objectives can be achieved.
• All the goals should be attainable so organisations should set the targets as per their capability so that expected results can be achieved.
• Realistic means all the objectives should be reasonable and result-oriented so that their overall performance can be improved.
• The last time bound is related to the time that all the objectives and goals should be accomplished on time and given a deadline. The organisation can revise their objectives after some time so that they can sustain their competitive advantage in the market.

CONCLUSION

From the above-mentioned report, it has been concluded that business strategy can be made by the organization so that they can accomplish their objectives. All the strategies should be made on the basis of the vision and mission of the company. The firm can use the swot and Porter's five force models in order to evaluate the effectiveness of the strategic plan. Along with this, organizational and environmental audits can be conducted by the strategic planner so that an effective plan can be made. Along with this, the enterprise can use different approaches such as retrenchment, limited growth and so on. Further, some of the resources such as human, raw materials, and financial are used by Volkswagen so that overall performance can be improved.

REFERENCES

• Bharadwaj, A. and et.al., 2013. Digital business strategy: toward the next generation of insights.
• Boyer, J., Frank, B., Green, B., Harris, T. and Van De Vanter, K., 2010. Business Intelligence Strategy: A Practical Guide for Achieving BI Excellence. Mc Press.
• Burlton, R., 2010. Delivering business strategy through process management. In Handbook on Business Process Management 2 (pp. 5-37). Springer Berlin Heidelberg.
• Cinquini, L. and Tenucci, A., 2010. Strategic management accounting and business strategy: a loose coupling?. Journal of Accounting & Organizational Change. 6(2). pp 228-259.
• Connor, J.M. and Lande, R.H., 2012. Cartels as rational business strategy: crime pays.
• Godwin, B.J., Kalapana, D. and Valli, S., 2013. FOREIGN DIRECT INVESTMENT IN INDIAN RETAIL SECTOR-PESTLE & SWOT ANALYSES. International Journal of Management, IT and Engineering. 3(3). p.265.
• Hoejmose, S., Brammer, S. and Millington, A., 2013. An empirical examination of the relationship between business strategy and socially responsible supply chain management. International Journal of Operations & Production Management. 33(5). pp 589-621.
• Hsieh, Y.H. and Chen, H.M., 2011. Strategic fit among business competitive strategy, human resource strategy, and reward system. Academy of

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