Strategic management Essay Example | Topics and Well Written Essays - 3000 words

Strategic management - Essay ExampleThe products of the family be sold in the market with various betray names manage Audi, Skoda, SEAT, Bentley, Bugatti, Volkswagen Commercial Vehicles, Lamborghini, Bugatti, and so on. The companys business activities are generally operated in the geographical locations of North America, Europe, Asia-Pacific, and South America. The brass is headquartered at Wolfsburg, Germany and was founded in the year 1937 (Yahoo Finance, 2012a). The shares of Volkswagen are publicly traded in the Frankfurt Stock Exchange with the lookout man symbol VOW. The company is found to have strategic alliances with other leading companies like Porsche AG, Chrystal Group, Daimler AG, etcetera At present it is considered to be the market leader in the car manufacturing industry of Europe (Yahoo Finance, 2012b). This take in entails about identifying and evaluating the business strategies followed by Volkswagen to maintain its leadership position in the market. Vari ous strategic tools like PESTEL and SWOT analysis have been performed in this study to gain understanding and knowledge about the small and macro environment factors having an impact on the company and how it has managed to become profitable and sustainable in the give market environment. Market Identification Volkswagen Group operates its business in the global automotive industry and has successfully managed to maintain its leadership position in the market through effective management of available resources in the industry. Porters five forces model service of processs an organization to assess the competitive forces which exists within the industry (Hill & Jones, 2012, p. 49). The forces which help in the process are named as a) threat of new entrants, b) threat from the substitute products or services, c) talk terms power of the suppliers, d) bargaining power of the consumers, and e) competition within the industry (Society for Human Resource Management (U.S.), 2006, p. 38- 39). As regards the Volkswagen Group, comprehensive analyses of these market forces existing in the global automotive industry have been discussed as accustomed below A. Buyer Power The buyer power in the automotive industry is weak because it is mainly dominated by a small number of car composers like Volkswagen, Ford, and General Motors. The primary buyers are the dealers and they are forced to sell the product defects that are preferred by the consumers in a finicky market. Moreover, it is difficult for the dealers to integrate backwards because of different nature of the industry that requires high capital investment to manufacture products that are sold by them to the end customers. B. Supplier Power The key inputs that are required by the automobile manufacturers like Volkswagen include certain commodities like metals and other fabricated components. These primitive materials are sourced by the car manufacturers from outside suppliers who are mostly large multinational co mpanies having a strong presence in the market. This increases the supplier power in the market. However, the supplier power is weakened due to low differentiation of raw materials required by the car manufacturers. Hence, overall the supplier power is moderate in nature. C. Threat of brisk Entrants If we speak of the threat of new entrants in the market it can be adjudged as low because brand value plays a vital role in the industry and it is difficult for the new players to establish their brand reputation immediately after entering into the market. Companies