PESTLE, SWOT and 5 Forces Analysis of Automobile Industry

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Assessment one

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Contents
Introduction.................................................................................................................................................3
Pestle analysis of Automobile industry........................................................................................................3
 Political factors................................................................................................................................3
 Economical......................................................................................................................................3
 Socio Cultural factor........................................................................................................................3
 Technological Factors......................................................................................................................4
 Environmental or Ecological factors................................................................................................4
 Legal Factors:...................................................................................................................................4
SWOT Analysis of Automobile industry...................................................................................................4
Strengths:................................................................................................................................................4
Weaknesses:............................................................................................................................................5
Opportunities:.........................................................................................................................................5
Threats:...................................................................................................................................................5
Five Forces (5F) Analysis of Automobile industry........................................................................................5
Threat of New Entrants...........................................................................................................................6
Bargaining Power of suppliers.................................................................................................................6
Bargaining Power of Buyers.....................................................................................................................6
Threat of Substitutes...............................................................................................................................6
Threat of Competition.............................................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8

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Introduction
The performance of business organizations are largely influenced by the rapidly changing
environment factors that are beyond their control. The present essay is undertaken for providing
an understanding of the PESTEL, SWOT and 5 forces analysis strategy development tools. This
is done by analyzing the internal and external environment factors impacting the automobile
industry by the application of the use of these strategy development tools.
Pestle analysis of Automobile industry
PESTLE refers to an analytical tool used in the strategic business planning and it provides
the strategic framework for understanding the impact of the external factors on a business. The
PESTLE stands for political, economic, social, technological, legal and environmental. All these
represent the external factors that impact the business in various manners. Pestle analysis can be
used in business in form of marketing planning, strategic planning, product development, project
expansion, organizational change and in other related business context (Kachru, 2009). In this
context, the in-depth explanation of the pestle analysis as a strategy development tool is provided
with its application in the automobile industry. The automobile industry is regarded as one of the
biggest industry incorporating wide number of brands competing with each other for the market
share. The pestle analysis of the automobile industry is carried out as follows:
 Political factors: Political factors have a direct impact on the growth and long-term
development of the automobile industry. The governments at a global level have strict
regulations regarding the low emissions vehicles and have higher taxation on luxury
vehicles. Government of UK and EU are providing subsidies to the automobile
manufacturers to produce low emission vehicles.
 Economical: Economic factors play an important role in the context of the automobile
industry. There are major changes in the automobile industry due to economic crises in
year 2008 and 2009. The increases in the cost of goods have led the increase in prices and
it has adversely impacted the sales volume of luxury cars all over the world.
 Socio Cultural factor: The changes in the preferences, needs, desire, and cultural
trends of the people around the world has led to shift in technology and has forced the