LCBB6004 Strategic Management & Sustainability Assignment Sample

Introduction Of Strategic Management and Sustainability

Individuals have the potential to augment their cognitive and practical proficiencies within advantageous settings facilitated by institutions (Lee, et.al, 2021). As a component of this approach, it is imperative to carry out supplementary investigation concerning the aforementioned organization. The present case study will center on Volkswagen (VW), a German automobile manufacturer that has faced censure for incorporating emissions-manipulating technology in specific models of its cars. The "dieselgate" scandal resulted in Volkswagen facing legal action on a global scale, leading to the payment of substantial amounts of money in the form of fines, restitution, civil settlements, and repurchase schemes. Apart from the matter of emissions, Volkswagen was accused of deceiving its clientele regarding the sustainability evaluations of their automobiles. Despite reaching a settlement with over 90,000 drivers in England and Wales, the company continues to face legal challenges in other jurisdictions as cited by BBC (2022). The present case study aims to examine Volkswagen's sustainability strategy and initiatives with the objective of facilitating their ascension as a pioneer in sustainable mobility.

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Figure 1 Volkswagen's #Transform2025+ strategy for the next decade

(Source: Specialist Cars Volkswagen, 2016)

The key business strategies of VW over the past five years

Volkswagen’s main business strategies over the previous five years could be acknowledged as follows:

• Electric vehicle (EV) extension- VW has formed teamwork to develop its portfolio of EVs. In 2019, the organization released its agenda to initiate 70 fresh electric designs by 2028, and also ID.3 and ID.4 have now been released.
• Digital transformation- VW has created major investments in digital conversion, involving a corporation with Microsoft to expand a motor-driven cloud platform. This has permitted the organization to provide linked car services and increase consumer experience.
• Cost-cutting actions- following the Diesel Gate scandal in 2015, VW has executed price-cutting measures to get better productivity. It has involved decreasing its labor force and reformation operations.

Although these tactics have been trailed to stay competitive in the motorized business and to deal with various problems facing VW, involving enhancing pressure to decrease emissions, the increase of digital disturbance, requires getting better fiscal performance.

Figure 2 Volkswagen Group Outlines NEW AUTO Strategy Through 2030

(Source: Mark K., 2021)

To analyze these tactics the Ansoff Matrix framework could be utilized by the company. VW’s growth into EVs displays a product expansion tactic, as the organization's digital transformation hard work could be clear as a diversity tactic (Hassan, 2019). The price-cutting actions could be checked as a mixture of market entrance and deflation strategies targeted at bettering productivity.

The relationship between the external context of an organization and its internal context

External environment

PESTEL analysis

• Political- VW works in a greatly standardized industry and is depending on political aspects, for example, trade ethics, tax rules and ecological regulations.
• Economical- The automotive business is aware of adjustments in the economic atmosphere, involving rising prices, interest rates, and trade rates (Máté, 2022).
• Social- adjustment in communal perspective toward green politics, sustainability, and flexibility preferences could affect VW’s product expansion and marketing tactics.
• Technological- VW should stay advanced with technological development in the industry, like electric vehicles, robotic cars, and independent driving.
• Environmental- VW should cooperate with rules appropriate to transmission and sustainability, mainly all things considered the "Diesel gate" disgrace.
• Legal- VW must cooperate with various legal policies, involving labor regulations, product liability policies, and also intellectual property (IP) regulations (Dalirazar, 2020).
• Internal environment

SWOT analysis

Strength	Weakness
· Strong brand identity and quality standard. · The broad variety of products, from motorcars to deluxe vehicles. · Efficient manufacturing and supply chain network. · Technological invention and concentrate on sustainability (Merwitz, 2020).	· Pessimistic promotion by cause of the "diesel gate" disgrace. · Dependence on the European market. · Inadequate presence in up-and-coming markets. · High manufacturing costs as opposed to competitors.
Opportunities	Threat
· Rising demand for mixed and electric vehicles. · Development into rising markets like India or China. · Expansion of self-contained vehicle technology. · Considered collaboration with other organizations in the auto sector.	· Extreme competition from further car industry. · Economic deflations and changes in demand. · Rigorous ecological regulations. · Possible supply chain disturbance due to universal measures or natural calamity.

Evaluating PESTLE and SWOT analysis has a major impact on Volkswagen's strategies. Based on these factors, VW could develop effective tactics which deal with both internal and external aspects affecting the organization’s operations (Toma, 2019). For instance, VW can respond to economic deflations by decreasing prices, expanding its product stripe, or bettering its supply chain network. Likewise, the organization can spend on EV technology, enlarge into up-and-coming markets, or create collaborations with tech industries to deal with opportunities in the firm.

The resources and capabilities aligned to its current business strategies

Volkswagen prioritizes sustainability, innovation, and efficiency in aligning its resources and capabilities with its business strategy. By investing in electric car technologies, eco-friendly production, strategic collaborations, and restructuring, the company has kept its automotive industry advantage. VRIO model of VW is a resource-oriented scrutiny utilizing the details offered by the Volkswagen team. Based on Resource analysis is on the assumption that tactical resources could offer VW a prospect to develop sustainable competition above its competitors in the business (?irjevskis, 2021).

VRIO Analyses

Resources/Ca Capabilities	Value	Rare	Imitation	Organization	Competitive Advantage
Consumer network and reliability.	Yes, 23% of consumers commit to further than 84% of sales profits.	Yes, the company has spent to make strong consumer reliability.	Has been an effort by rivals but no none of them are victorious.	The company is using consumer reliability for a good result (Allam, 2020).	Offer medium-term competition.
Entry to vital resources for triumphant execution.	Yes	Yes, because other rivals must accept the firm's leading marketplace.	May be duplicated by competitors.	Yes	Offering sustainable competition.
Successful execution of a digital plan.	Yes, with no complete digital plan, it is very complex to compete.	No, since most firms are spending on digitalizing practices.	Maybe imitated with rivals.	One of the main players in the business.	The digital approach has turned vital in the company but it cannot offer sustainable competition.
Position between vendors and wholesalers.	Yes, the company has a strong connection with retailers	Yes, it has committed channel associates.	complex to imitate still not impossible	Yes, throughout the company has utilized it effectively.	Sustainable competition.
Opportunities in e-commerce platform utilizing current IT capabilities.	Yes, the e-commerce platform is fast growing and the company can use opportunities.	No, most rivals are spending in IT to go into the platform.	AI and domestic analytics may be complex to imitate.	It is now beginning for the company.	Ultimately, it can offer sustainable competition.
Ability to handle the legal duty.	Yes	No	Maybe imitated through rivals.	Yes	Not vital aspect
Consumer community.	Yes, because consumers are cogenerating products.	Yes, the company has capable of making a special connection with its consumers.	Very hard to imitate the customs and community loyalty.	Going with the data, there is yet much upside.	Offering strong competition.
Opportunities in nearby industries and fresh resources are needed to enter those businesses.	May be precious as they will make new income flows	No	Maybe imitated through rivals (Kabeyi, 2020).	Each capability of the company is not still completely used.	Has possible
Visualization of the guidance for the next place of concern.	Yes	No	Cannot be assumed by rivals.	Not as per the information offered in the case.	Can induce strong competition.

By analyzing Volkswagen VRIO analyses it is easy to align resources and capabilities through upcoming business strategies.

The factors that must be considered by an organization in the implementation of a strategy

Volkswagen is an MNC automobile producer established in Germany which makes various vehicles, from motorcars to deluxe vehicles. To execute a plan effectively, VW wants to analyze many vital factors:

• Market analysis- VW wants to consider the market and recognize customer requirements and tastes. This study will assist the organization to build a strategy that adjusts to market stipulate and assures the organization’s constant development and productivity.
• Resource allocation- VW should allot resources for instance capital, workers, and time efficiently to apply the plan successfully. The organization must assure that the essential resources to implement the tactic and attain the preferred results.
• Technology and advance- The automotive sector is developing quickly, with the latest technologies and modernization emerging frequently (Raguseo, 2019). VW requires spending on research and expansion to remain competitive and integrate fresh technologies and modernization into products.
• Brand identity- VW's brand identity is important to the victory of its tactic. The organization should make sure that its goods and services regulate its brand image and standards. This will support VW sustain customer reliability and attract fresh consumers.
• Regulatory agreement- Automobile manufacturing is based on several regulations and principles which the company should recognize. VW has to assure that its goods and duties adhere to all appropriate regulations and values.
• Employee engagement- The triumph of VW's tactic relies greatly on its workers’ engagement and inspiration. VW has to make sure that its workers are completely committed to a plan and include the essential abilities and resources to apply it effectively.

VW has tried to become more competitive while taking into consideration sustainability and the environment

Volkswagen has to build efforts to grow into additional competitive taking into concern sustainability and the ecological. There are some cases discussed below:

• Electric vehicle production- VW has purchased greatly in EV manufacture, intending to become a head in the EV market. The organization targets to manufacture 1.5 m EVs in 2025 and has tactics to spend €35 billion on electric vehicle machinery (Stieglitz, et.al, 2019). In 2020, the organization sold above 230,000 electric vehicles, a 214 percent enhancement from the past year. This shift towards EV manufacturers ranges from VW's dedication to decreasing its greenhouse effect.
• Green manufacture amenities- VW has constructed major efforts to minimize its ecological effect in its manufacturing conveniences. For instance, in the US its Chattanooga factory is motorized completely by sustainable energy origins, and its plant in Zwickau, Germany, utilizes just ecological energy. Moreover, the organization desires to minimize its pollution by 30 percent per motor vehicle by 2025.
• Sustainable resources- VW are exploring the utilization of renewable resources in its automobile manufacturing. The organization has utilized reused plastic bottles to make seat covers and also has tactics to utilize sustainable resources like a cork in upcoming vehicle models.
• Net zero goals- VW has put determined standards to become Net zero by 2050. This includes decreasing its pollution through various measures, involving bettering its manufacturing procedures, raising the employ of sustainable energy, and spending on carbon credits.

Critically evaluation of the competitive and development strategies of an organization

The major challenges of climate change were increasing in the industries because of new competitors and innovation in technology. This is because Volkswagen's speed is increasing more than before. In 2030 China and U.S. want to increase their share of e-cars (Deberdt, 2022). Volkswagen is producing large volumes and covering all segments that are accelerating pace. Because of climate-neutral e-mobility, the Volkswagen brand position is global in the market lead. The four major driving forces of vehicles for future development is a real game changers like digitalization, software–defined items, new business models, and autonomous driving. The driving change in the Volkswagen brand from now to 2030 was spreading because of autonomous driving this change was occurring cause the development of software and the customer experience based on digital.

For the future, the Volkswagen brand is also taking a bold approach to move forward for e-mobility. The products and services of the Volkswagen brand are luxuries and anyone can afford them the portfolio of big products is also impressive. The Volkswagen brand makes a large amount of investment every year in research and development (Zhang, 2021). The main focus on research and development is because of the highly competitive race in every brand so that we can go ahead from others. The Volkswagen brand also can survive the challenges made in the external environment. For example, Audi was the cheerful brand in its whole portfolio of Volkswagen and in 2016 new models were also released in the sale of the vehicle apart from the Audi portfolio.

Recommendations to help the organization to develop competitive advantages

Here are various suggestions for Volkswagen to expand sustainability performances that could assist the organization to get competition in the future.

• Highlight circular economy values- VW can acquire round economy ethics to get better in its sustainability performances. It means to design products that could be recycled. Consequently, VW may minimize waste and reduce its ecological effect (Fitzgerald, 2020). VW may also explore the opportunity of employing reused resources in its products that may support decreased prices and commit to a further sustainable upcoming.
• Develop green energy use- as VW has manufacture considerable efforts to minimize its ecological effect in its manufacturing services, it can enlarge its utilization of green energy. The organization may explore the likelihood of fixing solar cells on its manufacturing services or buying sustainable energy from providers. For that reason, VW can decrease its greenhouse gases even more, and save capital on energy prices.
• Partnership with suppliers- VW can operate with its provider to acquire renewable practices in their services. In doing so, the organization can assure that its logistics are renewable and reduce its environmental effect. VW may also analyze collaborating with providers to expand innovative results which can assist decrease waste, saving prices, and commit to a further sustainable future.
• Expand modern sustainable products- VW may carry on to spend on research and expansion to increase modern renewable products. For instance, the organization could explore the opportunity of emergent EVs that employ sustainable energy sources (Dathe, et.al, 2022). By that means, VW may distinguish itself from rivals and achieve competence in the market.
• Concentrate on employee engagement- worker engagement is important for the victorious execution of sustainability performances. VW may build up training activities for workers that highlight the significance of sustainability and offer them essential abilities and resources to apply for sustainable programs in their regular operations. Through that VW may make an ethnicity of sustainability which could contribute to an organization's global success.

Conclusion

This report has concluded that in current years, Volkswagen has built major steps towards assembling sustainability into its strategic management approach. Although, VW has made contributions to minimize its greenhouse effect and enhance its production of EVs, with bettering the sustainability of its logistics. The report analyzes one main aspect of VW's sustainability tactic is the invention of its "goTOzero” initiative, the objective is to attain net zero over the organization's whole value chain in 2050. This initiative involves developing the manufacturing of EVs and spending on sustainable energy sources. According to the report, VW also has taken strides to get better its corporate governance and clearness which are necessary for sustainable and liable business programs. The organization has executed more accurate compliance and informing processes and builds an autonomous sustainability council to watch over its sustainability hard work. For that reason, Volkswagen may get better at its continuing competitiveness and commit to a further sustainable future.

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