Business Organisations and Environments in a Global Context Solution Assignment

BUSINESS ORGANISATIONS
AND ENVIRONMENTS IN A
GLOBAL CONTEXT

Table of Contents
INTRODUCTION...........................................................................................................................1
Information about selected business organisation..................................................................1
Background information about the country............................................................................4
Analysis of business scenario...............................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business organisation refers to an entity that is formed with a purpose of effectively
carrying out the trading related activities. In this, organisational structure defines that how the
roles, power and responsibilities are assigned, controlled and coordinated. The activities of firm
will be carried out by person or group of individual in which people working together in order to
pursuit same commercial interest (Del Giudice, Carayannis and Maggioni, 2017). The business
activities are needed to be conducted and it performs its duty as to purchase and sale of products
and services to generate long term profitability.
The present report is based on Porsche AG, which is a German auto-mobile manufacturer
specialised in high performance sports. This firm is taking very initiatives to manufacture
product help of which innovation can be possible. The main aim of this entity to expand its
business activities in new market in Netherlands. The object is to put their focus over key
competitive advantages so that key targets of an entity can be achieved within short period of
time.
The main motive of firm is to expand its business activities so that profitability can be
generated by entering into new market. Furthermore, the success of an enterprise is dependent
over ability to deliver quality and efficient products to potential customers (Elson, Ferrere and
Goossen, 2015). In order to make effective expansion the current need of customer of new
market are needed to be analysed. The report will conduct PESTLE analysis to scan the micro
environmental activities and Porter's fiver forces to determine attractiveness of market and this
helps to transform the business approaches of enterprise. In addition to this, appropriate data and
examples are needed to be shown to achieve strategic edge and competitive advantage.
Information about selected business organisation
Porsche is a renowned auto mobile manufacturing industry specializing in high
performance sports cars. Thus, German auto-mobile creator has succeeded in producing sports
cars that are famous action, quality and dependability.
 This company was founded by Ferdinand Porsche in year 1931, who was the chief
engineer at Mercedes-benz and later incorporated a company under his name 'Porsche'. In
year 1938, first organisation known as 'Porsche 64' was released by firm (Huneke, 2017).
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Therefore, vehicle gained a lot of popularity and success time of Porsche stared in history
of this organisation. Their headquarters are in Stuttgart, Baden-wurttemberg in Germany.
 The company not only deal with production of high speed sports car but also created
many patents and developed ideas for making tanks, air-planes. Company in mid-1950s
introduced their own engines with powerful version of 356. The new modal 356 became
true legend in auto-mobile industry with its attractive and wonderful appearance. In
additions, organisation introduced unique type 911 Porsche in year 1964.
 Therefore, for production of car company used same techniques and design as for
Volkswagen Beetle. During mid 1970-1980 the Porsche company has faced many
challenges and was almost in disaster. Company's two models 924 and 928 were best
models that returned fame to organisation. Those models are the best example of new
style and concepts. Company enjoy advantage during 90's as models became more
classic(Elson, Ferrere and Goossen, 2015).
 The company car presented the best combination of quality and prices for sports, racing
models. Porsche Boxter is the most successful model of Porsche company. This
organisation has many legal form such as they include special equipments which is not
supplied as standard and that is only obtainable for additional charges.
 All car models of this organisation are not available in every country as there are some
rules and regulations specified for each product. Also, they reserve right to change
design, equipment and vary colours as well as delivery description. Company have
acknowledged liability only for company approved parts but does not accept obligation
for damage caused to other spare parts. The company main objective is to achieve value
generating growth and this firm does not tolerate any legal violations.
 Porsche has many competitors in auto mobile sectors like BMW is the biggest competitor
of this firm they are brought more innovation in new car launched that is zolder GT1
which is giving huge competition to new model of Porsche. The Audi R8 is modern
junior super car that many Porsche unbelievers feel 911 should be(Larson, Porsche,
2014).
 The model 911 has everything, looks, sound, performance and four-wheel drive. Its not
easy to compete against Porsche and rival has to bring more innovation to compete. In
addition to the improvement of trend- new power vehicle. Porsche Boxster E is a kind of
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Boxster with mid engine, electric motor, battery, and high-voltage technology. The
competitors like Tesla Roadster are unable to match standards.
 This firm has their cars are less powerful than Porsche Boxster E. In 2015, the firm
reported selling of total 218,983 cars and has been highly successful in recent times.
Therefore, organisation has claimed the highest profit per unit sold of any company in
year 2015. Thus, this organisation 2016 was the best year where they sale over 5500 sales
and set record for all other countries. Also, on 11 may 2017, firm build one millionth 911
models and organisation in very successful industry of auto-mobile sector (Shamsie,
2016). Organisation has 29% share in German engineering and designing and in 2018,
Porsche acquired a 10% minority shareholding stake to form a development partnership.
Illustration 1: Financial indicators of Porsche AG
(Sources: Porsche publishes a combined annual and sustainability report. 2017. )
Financial performance-
Porsche supplied 28,317 new vehicles in its home countries in 2017. In this, it has been
stated that 718 Boxter and cayman sports car sold in 3364 units. Thus, in this April of 2017
Porsche has taken step to open his new showroom in the up market of North sea holiday island of
Sylt. Thus, Cash flows from operating activities are amounted $ 4069 million in the end of 2017,
the reporting period following $ 3.864 million in the previous year. In addition to this, changes
can be seen in cash flows from financial activities in the rage between $ 786 million in prior year
to $ 744 million in the current fiscal years.
Overseas
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The organisation has expanded its markets overseas and is opening its large dealership in
the world. Thus, company is aiming an additional 15 countries by end of decade and is looking
to expand in north Africa. Therefore, China was top market for Porsches Cayenne SUV and
company wanted to focus on sports car sales.
Legal form
This organisation has many legal form such as they include special equipments which is
not supplied as standard and that is only obtainable for additional charges. All car models of this
organisation are not available in every country as there are some rules and regulations specified
for each product. Also, they reserve right to change design, equipment and vary colours as well
as delivery description. Company have acknowledged liability only for company approved parts
but does not accept obligation for damage caused to other spare parts. The company main
objective is to achieve value generating growth and this firm does not tolerate any legal
violations.
Operations- The Porsche Ag Group after tax increased by $ 499 million from $ 2640 million in
reporting period. It has legendary quality and in customer expectation should be given paramount
interest. This firm is operating its activities as to produce low fuel efficient cars. The main aim is
to makes the innovation so that firm can able to undertake its business operations effectively.
Background information about the country
It is inclusive of factors and elements in the organisation which has immediate areas of
operation and it also can impact on performance and decision making of an enterprise. It is
comprehensive of nearby component such as suppliers, marketing intermediaries, customer
market and public (Fineman, 2017). With help of tactics as bigger location, differed pricing
strategies and well-improved marketing techniques will be crucial to have long term
sustainability and to earn profitability. The future of this enterprise is bright but it is crucial to
diversify its product line and to penetrate in new markets. It is external analysis and in this
proper strategic analysis is need to be conducted so that expansion of firm can be possible. Thus,
marketing environment of country is need to be analysed before setting up entity’s operations in
new market. It will be conducted with help of PESTLE analysis technique. This is defined in
below context as:
Political factor- In Netherlands, economic conditions, commercial laws and investment policy
are not that much affected. Due to minimum interference of legal authorities and its trade
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investment policies the function of enterprise can be carried out smoothly (Green, 2018). In this
way, the government offers various policies which helps to encourage international investments.
Thus, taxation system of this country is effective due to this rapid investment can be possible. It
is political stable country, it oil prices use to increase and decrease and this is highly impacting
over country GDP. Moreover, Porsche AG Ltd can expand its business operation in the market
of Netherlands.
Economical factor- In this, Netherlands can be called as gate of Europe due to its predominant
geographical locations. The economy is dominated by service sector and in this maximum
contribution in 80.7% to total amount of GDP in 2016. However, Gross domestic product in
Netherlands was worth 826 billion US dollars in 2017. The value of GDP represents 1.33
percent of the world economy. Under this, GDP of Netherlands averaged 348.12 USD Billion
mover from the the year 1976 to 2017. On the other hand it can be said that Netherlands is
expected to be 851.00 billion by the end of this quarter. Till 2020, GDP is expected to trend
around 888.00 USD billion. Moreover, it can be said that developed transportation system, well-
advanced communication infrastructure, effective government support and attractive commercial
environment helps to make most favourable economic surroundings. This country has
sustainable development goals and it provides way for prioritising the capital expenditure.
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Illustration 2: GDP growth rate
(Source:Netherlands GDP Growth Rate, 2018)

Social factor- The residents who resides in Netherlands are living high quality of life. Due to
high skilled labour workforce it is possible to carry business activities of Porsche AG Ltd, they
can have qualified workforce team so that effective skill will leads to have innovative service in
enterprise (Huneke, 2017). In addition to this, the Netherlands has ranked top among
telecommunication markets. Thus, Porsche AG Ltd can expand its business operation in market
of Netherlands.
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Illustration 3: GDP Current growth
(Source: GDP (Current US$), 2018 )

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Illustration 4: Population size data
(Source: Population Total, 2018. )

Technological factor- This country has taken various initiatives in terms to leading
communication networks and IT techniques. In this, it can be said that customers of Netherlands
are enjoying differed methods of communication with wireless network operation
(Macroeconomic Opportunities and PESTLE Analysis of Netherlands, 2017). It is becoming
more efficient in terms to internet trading among the business enterprise. This will b assistive in
order to have rapid development in the country. There are many skilled labour workforce who
are taking initiatives in term to produce well equipped machinery so that customer can get
attracted towards it working (Kopnina and Blewitt, 2018). The Porsche AG Ltd is auto-mobile
company and it requires higher skilled labour workforce innovative advancement so that long
term sustainability of entity can able to promoted. This enterprise has made various investment
in technology and innovation in terms to achieve effectiveness sand efficiency.
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Illustration 5: Unemployment data
(Source: Unemployment Total (% of total labour force), 2018.)

Legal factors- In this, it can be said that legal institution of Netherlands are highly praised as
there are number of legal reforms which is need to be proceeds effectively. Under this, it is
essential to have improvement in consumer protection, anti spam regulations and application of
competition laws (Larson, 2014). This country has low tax reforms, due to this there can be high
possibilities of expanding business operation in new country. In this, it is essential to encourage
efficient investment in infrastructure and to promote innovation capabilities in market.
Environmental factor- In this country, environmental protection have been continue to be
major public concern. Thus, it can be said that changes can be seen in climate and atmosphere
system and it has became greatest political and environmental challenges. Thus, Porsche is auto-
mobile industry and it is essential to take several steps to cope with CO2 emission in order to
protect climate (Lasserre, 2017). Thus, Porsche is taking initiative to develop comprehensive
strategy so that long term success can be achieved. The environment friendly products attracts
customer and expansion can be proceeds effectively.
Porter five forces analysis To determine market positioning
It is an analysis which help to determine the attractiveness of Porsche AG Ltd. It can be done
with the help of Porter's five forces of competition. This will be in following below context as
are-
Suppliers- In this, Porsche AG Ltd, is one of an enterprise which is taking several step for
having innovation in an enterprise. In addition to this, due to globalisation there is increment in
possibility of choosing suitable suppliers from large pool of suppliers. Thus, supplier of Porsche
AG Ltd are required exclusive materials with high quality and it can be deliver by very few
number of suppliers. To expand business activities in Netherlands firm should have effective
supplier so that operational activities can be conducted proficiently.
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Illustration 6: Porter's five forces
(Source: Leruste, 2013)
Customer bargaining power- Under it, customer are having substantial power at the time of
adopting products from market. In this, there are differed brands who are offering effective
quality, appearances and additional feature into products. The expansion of Porsche AG Ltd will
be successful only when the firm can have idea about the needs of buyers and market of
Netherlands is need to be analysed.
Threat of substitutes- It is auto-mobile company and provides quality products to its customers.
This firm is taking initiative to supply good quality products to buyers. The Porsche is providing
high quality services although due to prices factors customer use to switch their decision to other
brand. In this, successful expansion of firm can be possible if entity use to produce low fuel
efficient cars and it must be in affordable price. The income level of this country is highly
progressive so that firm can operate its business functions.
Threats of new entrants- The reputation of brand plays equal role in eyes as well country. The
Porsche AG Ltd have a long and glorious history of boast, it is typical of any other firm to
challenge their prestige if successful innovation can be done on repetitive basis. In this way,
successful expansion of firm can be possible in the market of Netherlands.
Competition- In this, it can be said that there are number of rivalries of the luxury car industry.
Technological innovation will work as to put some fierce competition to being a market leader.
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To get the high position the firm need to adopt innovative approaches so that they can able to
compete with rivalries. In this, Porsche AG Ltd can be successfully takes entry into market of
Netherlands only if they can able to develop brands with offering customer's cars in low pricing
and with better fuel efficiency.
Analysis of business scenario
The present report is based on business scenario as Porsche AG, it is global automotive
industry and this firm has rapidly changed new strategic priorities and challenges of business
enterprise (Porsche SE, 2014). Thus, future strategy of this enterprise is to penetrate the newly
emerging economies like Brazil, china and Russia. This enterprise is taking several steps to
spending lot of money in research and development. This firm is the most successful
manufactures of exclusive sports car and its having outstanding reputation in market.
From the above analysis as PESTLE and PORTER'S I have analysed that Porsche AG ltd
can easily able to take enter into Netherlands market if they takes initiative to develop brands
with offering customer's cars in low pricing and with better fuel efficiency. This country is
political stable so that there are less intervention from legal authorities. The income level of this
is highly progressive so it will be better thing to maximise firms profitability. The tax reforms of
this count is not so high and this lead to enhance spending of customers. This enterprise is having
many rivalries in market, yet to compete with them it is taking steps to have investment in rapid
innovation. The main motive is to main strategic edge and competitive edge in market. Thus, this
country also have high skilled individual who can better operate functions of an enterprise. The
GDP of this country is continually to be increased as it is 851.00 billion by the end of this
quarter. Under it, developed transportation system, well-advanced infrastructure, effective
government support and attractive commercial environment will all will be essential factor to
successfully expansion the business operation in market of Netherlands.
This firm stands in market for its strong values as fairness, responsibility, quality and
efficient services. This is effective in terms to have transparent and rapid innovation. Under this,
each board managers, employees and management bodies are needed to take initiatives to follow
their motto (Ruggie, 2017).
In addition to this, it can be said that this firm need to have the use of sound strategies
which can be useful for achieving great success. This enterprise is taking various initiatives in
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order to have significant investment in terms to technology and innovation so that there can be
delivery of better and attractive products.
The product line is for premium customer who wants to have luxury vehicles so that need
of the customer is need to be satisfied. The most number of buyers wants to have good models
with fuel efficiencies , this are helpful in order to attract the customers in market. In order to
make the all the things effectively it is essential to adopt the comprehensive strategy so that
better quality products can be deliver to their luxury customer's (.Lasserre, 2017). The main
motive is to have clear and precise goals and it will be helpful to maintain strategic edge over its
customers.
In this, it can be said that the product of this enterprise can be known for being elegant,
robust and most powerful. With help of introducing the dynamic product the firm will be capable
to cater to diverse customer segments. The another key strength is that this firm have loyal
customer base in market.
Illustration 7: Inflation rate
(Source: DNBulletin: High inflation is a temporary phenomenon, 2018)
It is renowned the overall activities in the market, the main aim is to maintain it brand reputation
in the market. Under this, it can be said that globalisation has deregulated foreign market and
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enables customers to have the greater choice with respect to have proper selection in the auto
mobiles (Mendenhall and et.al., 2017). The strength points about this enterprise is that this is
having long term political stability and tax reforms of this country is affordable. This country is
taking initiatives to deal with digital communication strategy so that technical advancement can
be done effectively. The inflation rate of Netherlands is influencing in rapid manner and it is also
impacting over profitability of an enterprise.
CONCLUSION
Based on above notion it can be affirmed that organisation activities are need to be
carried out effectively. This assignment has reported about expansion of business activities in
Netherlands. The report has considered the activities of Porsche AG Ltd. This enterprise has
taken various initiatives in terms to maintain high level of quality. Thus, entity need to enhanced
its engineering capabilities to enables to introduce products and service to cater diverse customer
segments. The external analysis has been conducted to understand the operational working of
enterprise. To make expansion of business activities in new market it is essential to conduct the
PESTLE analysis so that firm can able to conduct its working appropriately. The main object of
this firm is to maintain strategic edge and competitive advantage. Thus, the need of customer of
current market has been analysed so that each activities can be done effectively. With help of this
approaches, long term profitability and productivity can be maintained. Moreover, it can be said
that development of comprehensive strategy is critical to have success. In addition to this, it can
be said that key competitive analysis is useful to transform business approaches. The proactive
employees will perform their best to provide quality and efficient product and services to
customer.
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REFERENCES
Book & Journal
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enterprises and international technology transfer: emerging perspectives from a quadruple helix
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Elson, C.M., Ferrere, C.K. and Goossen, N.J., 2015. The bug at Volkswagen: Lessons in co‐
determination, ownership, and board structure. Journal of Applied Corporate Finance.
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Fineman, S., 2017. The business of greening: an introduction. In The business of greening.
Routledge.
Green, D.D., 2018. Fueling the Gig Economy: A Case Study Evaluation of Upwork. Com.
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Stuttgarter Symposium. Springer Vieweg, Wiesbaden.
Kopnina, H. and BlewiGDP (Current US$). 2018tt, J., 2018. Sustainable business: Key issues.
Routledge.
Larson, G., Porsche SE, 2014. Motor vehicle, toy and/or replica. U.S. Patent Application
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Mendenhall and et.al., 2017. Global leadership: Research, practice, and development. Routledge.
Ruggie, J.G., 2017. The theory and practice of learning networks: corporate social responsibility
and the Global Compact. In Learning To Talk. Routledge.
Shamsie, J., 2016. Focus Strategy. In The Palgrave Encyclopedia of Strategic Management .
Palgrave Macmillan UK.
Online
DNBulletin: High inflation is a temporary phenomenon. 2018 [online]. Available through:
<https://www.dnb.nl/en/news/news-and-archive/dnbulletin-2013/dnb295316.jsp>.
GDP (Current US$). 2018. [online] Available through:
<https://data.worldbank.org/indicator/NY.GDP.MKTP.CD>
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Leruste, v., 2013. Porter's Five forces Analysis of the Luxury cars Industry. [online] Available
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of.html>
Macroeconomic Opportunities and PESTLE Analysis of Netherlands 2017. [online]. Available
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<https://tradingeconomics.com/netherlands/gdp-growth>
Population Total. 2018. [online] Available through:
<https://data.worldbank.org/indicator/SP.POP.TOTL?locations=NL>
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Unemployment Total (% of total labour force). 2018. [online] Available through:
<https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS>
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