strategic assignment (2).doc

8/19/2019 Strategic Assignment (2).doc

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STRATEGIC AUDIT

OF

VOLKSWAGON AG.SID# 1546886/1

WORD COUNT: 4000


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ABSTRACT

This paper represents the individual undertaking of a critical strategic analysis of Volkswagen

Ag. The paper comprising of two parts Part A and Part B. Part A contains data collected and

presented as a group presentation and Part B represents the individual undertakings of the

Author. In this study, the author examines the current strategic position of Volkswagen Ag, ased

on an in!depth evaluation of its internal and external environment. The resource competencies

and capailities are critically appraised together with the macro usiness environment of the

airline industry to determine where value added lies, and the extent of alignment with its

environment, which can result in the enviale and sustainaly competitive position of strategic

fit.

Informed y the findings of the study, a recommendation is offered for the future strategic

direction of Volkswagen Ag. In making this recommendation the author takes into account the

financial implications for Volkswagen. Its feasiility, acceptaility and suitaility are considered

and are olstered y a comprehensive implementation plan.


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ACKNOWLEDGEMENT

The author acknowledges the effort and contriutions of colleagues as well as the course

facilitator in the production of this material

DELIMITATIONS

The scope of the report has een delimitations of the parameters of the parameters of the

"uestion in application to Volkswagen.

ETICS

The opinions expressed in this report are a result on an o#ective interpretation of the data

collected. There was no ias, su#ectivity or any interference in the #udicial process and o#ective

criteria


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METODOLOGY

$esearch Philosophy

- %ntological perspective, mixed method approach using data triangulation

&ata 'ollection (

- Primary ( )ey informant interview, *ynch +--/ and 0ohnson 1 2choles +--3/4

existing theories

- 2econdary data ( Annual $eports, %nline 2ources, %ther pulished ut validated

information

RESEARC OB!ECTIVES

5. To analy6e the current situation at Volkswagen Ag through the critical evaluation of its

internal and external usiness environment

. To critically assess the strategic resource capailities of Volkswagen Ag.

7. To examine the extent to which Volkswagen Ag is a strategically fit to deliver its goals

and o#ectives

8. To provide a critical appraisal of the range of strategic options availale to Volkswagen

Ag through the application of availale theories, concepts, literature and est practices as

it relates to strategies management

9. To determine a new future strategic direction for Volkswagen Ag.


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Table of Contents5.- '%:PA;< %V=$VI=> A;& 2T$AT=?I' @I2T%$I'A* P=$2P='TIV=.......................1

2.0.............................................................................................................................. 2

3.0 INTERNAL ENVIRONMENTAL ANALYSIS..............................................................3

3.1 Financial Analysis........................................................................................3

3.1.1 Financial SWOT Overvie........................................................................3

3.2 Val!e "#ain Analysis...................................................................................3

3.2.1 Val!e "#ain SWOT Overvie...................................................................3

3.3 Mc $insey %S M&'el....................................................................................3

3.3.1 Mc $insey %S SWOT Overvie.................................................................3

3.( "!l)!ral Analysis.........................................................................................3

3.(.1 T!rners "!l)!ral.......................................................................................3

(.0 IM*LI"ATIONS OF STREN+,TS AN WEA$NESSES............................................3

.0 E/TERNAL ENVIRONMENTAL ANALYSIS.............................................................3

.1 Mare) eni)i&n an' Sc&e.......................................................................3

.2 In'!s)ry Overvie.......................................................................................3

.3 *ESTTLE......................................................................................................3

.( "!s)&er Analysis......................................................................................3

. *&r)er4s Five F&rces.....................................................................................3.5 "&e)i)&r Analysis....................................................................................3

5.0 ASSESSMENT OF STRATE+I" RESO6R"E "A*A7ILIITIES....................................3

5.1 S)ra)e8ic "aa9ili)ies..................................................................................(

%.0 IM*LI"ATIONS OF O**ORT6NITIES AN T,REATS.............................................(

:.0 EVAL66ATION OF STRATE+I" FIT.......................................................................(

$==$=;'=2...............................................................................................................(

A**ENI"ES............................................................................................................... 5

Appendix II V> Balance 2heet! ive 'ash low 2tatements! ive $atio Tale! ive


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1.0COM"ANY OVERVIEW AND STRATEGIC ISTORICAL

"ERS"ECTIVE

The Volkswagen A? +V>/ is a ?erman multinational automotive manufacturing company,

estalished in 58C with its head"uarters in >olfsurg, ?ermany. V> is one of the worldDs

leading automoile manufacturers and the largest carmaker in =urope. It designs, manufactures

and distriutes passenger and commercial vehicles, motorcycles, engines, and turo machinery

and offers related services including financing, leasing and fleet management through it

inancial 2ervices division. V> has approximately 78- susidiaries, operates 55 production

plants in 75 countries and sells its vehicles in 597 markets. V> has a worldwide staff of

approximately 9,93C and produces the second largest numer of vehicles in the world. V> is a

pulic company and has it primary listing on the rankfurt 2tock =xchange, where it is a

constituent of the =uro 2toxx 9- stock market index, and secondary listings on the *ondon 2tock

=xchange, *uxemourg 2tock =xchange, ;ew trades under the symol+V*)A


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2.0 SITUATIONAL ANALYSIS

3.0 INTERNAL ENVIRONMENTAL ANALYSIS

3.1 Financial Analysis

T#e nancial analysis reveals )#a) VW a'rivers are )#e

reven!es >r& ?

T#e c&re c&s) 'rivers &> )#e 9!siness is @@@@.

Eaila)i&n &> VW #is)&rical er>&rance lii)e' )& )#e ve year eri&' 2010 )&

201( #as #a' &si)ive reven!e 8r&)# #&ever )#e iac) &n r&) ar8ins #as

9een ar8inal.

3.1.1 Financial SWOT Ovevie!

INT"#NAL ANALYSIS$ FINANCIAL

"L"%"NT I%&ACT ON T''" CO%&ANY ST#"N(

'T

W"A)N"

SS*r&'!c)

*&r)>&li&

*rice

State*ic

Financial

Analysis

+SFA,

&o-tability

+r&ss *r&)

Mar8in

,ave 9een c&ns)an) &ver year eri&' as a

res!l) &&> increase' reven!eas ne) sales

increase'. ,&ever #ave n& a 9!siness

eansi&n an' ac=!isi)i&n rela)e' c&s)

2


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Re)!rn &n

Asse)s

RO"E 8re in 2010 9eca!se &> )#e increase' ne)

earnin8s '!e )& )#e rec&very &> )#e ec&n&y.

,&everC 9eca!se &> )#e si8nican) cai)al &!)lay

an' increase' lia9ili)ies in 2011-2012 >&r )#e

ac=!isi)i&n &> *&rsc#esC !ca)i an' e=!i)y &nMAN SE an' )#e ye) )& 9e realiDe' earnin8 >r&

)#ese ac=!isi)i&ns in )#e s#&r) )erC )#e RO"E

)ren'e' '&nar's.Re)!rn &n

S)&#&l'er

E=!i)y

ROE #a' a s)ea'y incline >r& 2010 )& 2012 i)#

)#e 8r&)# in ne) inc&e a))ri9!)a9le )& increase

reven!e >r& ac=!isi)i&n ac)ivi)ies an' rec&very

&> )#e ec&n&y. ,&everC in 2012 ROE 'r&e'

s#arly as VW >!n'e' i)s ac=!isi)i&nsC s)ra)e8ic

8r&)# an' inves)en) r&8ra 9y iss!in8

s#ares. 201( sa a &'es) increase &> 3

in'ica)in8 )#e re'!c)i&n &> inves)en)

een'i)!re.

Li/iity

"!rren) Ra)i&

G!ic

7&)# c!rren) ra)i& an' aci' )es) ere #i8# in 2010

res!l)in8 >r& )#e &si)ive eHec) &> )#e cai)al

increase #ic# increase li=!i'i)y in )#e eri&'. 7y

2011C )#ere as a 'ecrease in li=!i'i)y 9eca!se

&> ac=!isi)i&n ac)ivi)ies an' rela)e' cas# &!)&s.

Activity

#atio

Acc&!n)s

Receiva9le

Receiva9le #as 9een c&nsis)en) i)# n&

!c)!a)i&n 'esi)e )#e increase in sales &ver )#e

eri&'. VW #as s)r&n8 cre'i) &licies an'

ana8een).

Acc&!n)

*aya9le

Inven)&ry

T!rn&ver

Al)#&!8# sales increase' >r& )#e eri&' 2010 )&

201(C 9eca!se &> )#e increase' s)&c >r& )#e

>!ll c&ns&li'a)i&n *&rsc#eC MAN S"C )#e Scania

s!9si'iariesC inven)&ry increase a) a >as)er ra)e &>

sales )#!s )#e inven)&ry )!rn&ver )ren'e'

'&nar' )& 201(

Levea*e

3


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e9) )& Asse)s e9) )& asse)s is rela)ively c&ns)an) i)#s)an'in8

)#e acc!!la)i&n &> asse)s. T#is s!88es)s )#a)

)#e 'e9) &r)i&n &> VW nancin8 &r)>&li& is

'ecreasin8 in'ica)in8 )#a) VW is !sin8 &re

e=!i)y )#an 'e9).

e9) )& E=!i)y e9) )& e=!i)y r&se 9y 101 in 2010 >r& 'e9)

inc!rre' in )#e ac=!isi)i&n &> ScaniaC ini)ial

in)eres) in MAN an' *&rsc#e as ell as )#e

"ai)al Increase. T#e 'e9) )& e=!i)y &ve'

'&nar' >r& 2011 as less 'e9) as !se' )&

nance 9!siness 8r&)# an' inves)en)

ac)ivi)ies as )#ese ere >!n'e' 9y e=!i)y.Saeole

al/e

Analysis

+SA,

*rice-Earnin8 *rice er s#are r&se s)ea'ily in 2011 )& 2013 i)#

an 11 increase in 2012 an' ;3 increase in

2013 lar8ely 'riven 9y )#e &si)ive eas!reen)

eHec) >r& )#e in)e8ra)i&n &> *&rsc#e SE an'

eHec) &> )#e an'a)&ry c&nver)i9le n&)e iss!e'

in N&ve9er 2012 an' s!leen)e' in 2013.

S#are rice s!r8e' '&nar's >r& 2013 >r&

!c)!a)i&ns &> )#e v&la)ile are) an' &verall

!n'erer>&rin8 a!)& in'!s)ry in )#a) eri&'.

%aet$

al/e

ivi'en' Ra)i& S* #as increase' s)ea'ily >r& 2010 )& 201(

9eca!se &> )#e increase in VW ne) r&) year

&ver year 8enera)e' >r& )#e 9!siness 8r&)#

an' ne ac=!isi)i&ns.

3.2 al/e Cain Analysis

(


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3.2.1 al/e Cain SWOT Ovevie!

3.3 %c )insey 4S %oel

*!rs!an) )& )#e Mc $insey %S &'elC )#e s&>) areas can 9e liene' )& )#e in)ernal

>&rces 'escri9e' in )#e T!rner % &'elC T!rner J1;;;K.

3.3.1 %c )insey 4S SWOT Ovevie!

3.5 C/lt/al Analysis

3.5.1 T/nes C/lt/al

(.0 IM*LI"ATIONS OF STREN+,TS AN WEA$NESSES

Overalll VW ain s)ren8)#s lie in i)s 8l&9al resence an' )#e s)ren8)# &> i)s 9ran'

an' s)r&n8 9ran' &r)>&li& i)# )#e incl!si&n &> Bugatti, Audi, Lamborghini, Porsche, and

Volkswagen. The ability to benefit from synergy created between the separate brands, VW has

benefitted fron shared !" and ser#iciig costand distribution channel optimi$ation. %ts strong

research and de#elopment section which thoroughly works on new public demand, designs, and

technological in#entions of the cars. The company is in a stable financial position and hold more the

&'( of the )hinese market. *&everC i)s &si)i&n in are)s s!c# as In'ia an' )#e

6ni)e' S)a)es is erely 3 an' (.: are) s#are resec)ively. T#e c&any cars

are als& n&) envir&nen)ally >rien'ly i)# )#ree &> i)s &s) ac)ive 9ran's ei))in8

ecessive car9&n-'i&i'e.@@@@@@.. T#ese >ac)&rs #ave res!l)e' in val!e l&ss

an' '&es n&) ali8n )& )#e 9!siness 8&als an' &9


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6.2 In/sty Ovevie!

6.3 &"STTL"

6.5 C/sto9e Analysis

6.6 &ote:s Five Foces

6.; Co98etito Analysis

5.0 ASSESSMENT OF STRATE+I" RESO6R"E "A*A7ILIITIES

;.1 State*ic Ca8abilities

S&!rce

%.0 IM*LI"ATIONS OF O**ORT6NITIES AN T,REATS

:.0 EVAL66ATION OF STRATE+I" FIT

2ource httpFFfa.aiu.eduFilesFGploadsF:?T55--88.pdf

5

http://fba.aiub.edu/Files/Uploads/MGT110044.pdfhttp://fba.aiub.edu/Files/Uploads/MGT110044.pdf


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%


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REFERENCES

Berman, ). )night, 0. 'ass, 0., And inancial Intelligence A :anagerHs ?uide to )nowing >hat

the ;umers $eally :ean. G2A Business *iteracy Institute?urufocus., n.d. >here are >= with :arket Valuations. onlineJ. Availale at

httpFFwww.gurufocus.comFstock!market!valuations.php Accessed 5 0anuary -5C

2tandards and Poor $esearch., -5. 2ummary Volkswagen A?. onlineJ. Availale at

httpFFwww.volkswagenag.comFcontentFvwcorpFcontentFdeFinvestorKrelations. Accessed 58

0anuary -5CJ

Volkswagen A? , -5-. Annual inancial 2tatements of Volkswagen A?. onlineJ Availale at

httpFFwww.volkswagenag.comFcontentFvwcorpFinfoKcenterFenFpulicationsF-59F-7FAnnualKin

ancialK2tatement.Accessed 5- &ecemer -5-

Volkswagen A? , -58. Annual inancial 2tatements of Volkswagen A?. onlineJ Availale at


ancialK2tatement.Accessed 5- &ecemer -58J










Volkswagen, n.d., ;ews. onlineJ. Availale at

httpFFwww.volkswagenag.comFcontentFvwcorpFcontentFenFhomepage.html. Accessed 5

0anuary -5CJ

:

http://www.gurufocus.com/stock-market-valuations.phphttp://www.volkswagenag.com/content/vwcorp/content/de/investor_relationshttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/content/en/homepage.htmlhttp://www.gurufocus.com/stock-market-valuations.phphttp://www.volkswagenag.com/content/vwcorp/content/de/investor_relationshttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/03/Annual_Financial_Statementhttp://www.volkswagenag.com/content/vwcorp/content/en/homepage.html


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A&&"N7IC"S

A$%&'( I : VW I%)*+$ S,-,$+$%, F'$ Y$- T$%&

;


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A$%&'( II : VW B--%)$ S2$$, F'$ Y$- T$%&

10


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A$%&'( III : VW C-32 F* S,-,$+$%,3 F'$ Y$- T$%&

11


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A$%&'( IV: VW R-,'* T-$ F'$ Y$- T$%&

VW A+ atios 2010 2011 2012 2013 2014

Profitability

+ross margin -. /.- 0.& 0. 0.'1et Profit 2argin 3./ . .4 4.- 3.3

5perating Profit 2argin '.' /. -.' 3. -.6

eturn on )apital 7mployed 85)79 '.& &./ /.0 3./ 3.0

eturn on 7:uity 8579 -. 0.0 &'.& .& .-

Li:uidity

)urrent atio . .' . .' .'

;uick Test atio '. '.0 '.0 '.0 '.0

7fficiency

ecei#able Turno#er . .' . .' .'

Total Assets Turno#er '.' './ './ '.- '.-

%n#entory Turno#er -.4 3.0 3.- 3.0 3.&

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