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

Strategic management - Essay ExampleThe products of the company are sold in the market with various brand names deal Audi, Skoda, SEAT, Bentley, Bugatti, Volkswagen Commercial Vehicles, Lamborghini, Bugatti, and so on. The companys line of credit activities are mainly operated in the geographical locations of North America, Europe, Asia-Pacific, and South America. The organisation 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 ticker symbol VOW. The company is found to have strategic alliances with other(a) leading companies like Porsche AG, Chrystal Group, Daimler AG, etc. At present it is considered to be the market leader in the car manufacturing industry of Europe (Yahoo Finance, 2012b). This study entails about identifying and evaluating the business strategies followed by Volkswagen to maintain its leadership position in the market. Various strategic tools like PESTEL and SWOT analysis have been performed in this study to gain reason and knowledge about the micro and macro environment factors having an impact on the company and how it has managed to become profitable and sustainable in the given market environment. market place Identification Volkswagen Group operates its business in the global automotive industry and has successfully managed to maintain its leadership position in the market through hard-hitting management of available resources in the industry. Porters five forces model helps an organization to assess the competitive forces which exists within the industry (Hill & Jones, 2012, p. 49). The forces which help in the figure out are named as a) bane of new entrants, b) threat from the substitute products or services, c) bargaining power of the suppliers, d) bargaining power of the consumers, and e) competition within the industry (Society for valet de chambre Resource Management (U.S.), 2006, p. 38-3 9). As regards the Volkswagen Group, comprehensive analyses of these market forces existing in the global automotive industry have been discussed as given below A. emptor Power The buyer power in the automotive industry is weak because it is mainly dominated by a small number of car manufacturers like Volkswagen, Ford, and General Motors. The primary buyers are the dealers and they are forced to sell the product brands that are preferred by the consumers in a particular market. Moreover, it is gruelling for the dealers to unify 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 unwrap inputs that are required by the automobile manufacturers like Volkswagen include certain commodities like metals and other fabricated components. These raw materials are sourced by the car manufacturers from out-of-door suppliers who are mostly large multinational comp anies having a strong presence in the market. This increases the supplier power in the market. However, the supplier power is weakened callable to low differentiation of raw materials required by the car manufacturers. Hence, overall the supplier power is moderate in nature. C. Threat of New 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