Environmental Analysis of Automobile Industry

This report provides an internal and external analysis of Land Rover, the largest automobile manufacturer company. Various methods such as SWOT Analysis, PESTEL Analysis, and Porters five force model are used to analyze the business environment. The report evaluates the challenges faced by Land Rover in the COVID-19 pandemic and the strategies used to overcome them. It also discusses the value chain analysis model and the critical evaluation of challenges in internal and external analysis. The subject of the report is the automobile industry, and the course code, course name, and college/university are not mentioned.

Environmental
Analysis of Automobile
Industry

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Internal and external analysis of Land Rover............................................................................3
Critical evaluation of challenges in internal analysis..................................................................8
Critical evaluation of challenges in external analysis.................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Global business environment is a factor which impacts the company's operations in wider
manner. It includes stake holder, consumers, suppliers, competitors, governmental activities and
so on. Effective business environment helped the company to run their operational activities
smoothly. The company which is chosen for analysing the internal and external factors is Land
Rover. It is the largest auto mobile manufacturer company and its head office is located in
United Kingdom. The organization was established in 1948 and their vehicles are classic and
unique from other competitors. The main motive of organization is to provide best quality
vehicle and time to time service to consumer. This report is prepared on the basis of secondary
research which includes magazines, newspapers, journals and so on. In this report, various
methods are used to analyse the business environment which includes SWOT Analysis, PESTEL
Analysis, Porters five force model etc.
TASK
Internal and external analysis of Land Rover
Internal analysis is a tool which is utilized by organization for evaluating their features,
assets, resources, capabilities and characteristics (Abbas, Idrees, and Rehman, 2020). Land
Rover is one of the company who maintained their reputation in the market with the help of
facilitating luxury innovations to customers. For reducing the challenges which was faced by
Land Rover in covid pandemic they used different strategies which are described below -
SWOT Analysis -
It is a strategic method which is utilized by company for handling different types of
situations internally. This method also helped company to understand their problems and then
prepare solutions internally for facilitate best quality products and services to consumers. In
context to Land Rover, authority used this technique for identifying their strengths, weaknesses,
opportunities and threats in present market scenario which are described below -
Strength includes -
 Effective brand image - Land Rover is highly popular for their comfort and innovations
in automobile industry. This company is mostly focused on middle and upper class
segments for maintaining the brand image in market.

 Well established workforce - It refers to the use of highly skilled and talented
workforce in organization (Alharahsheh and Pius, 2021). In context of Land Rover, it is
one of the company who mostly used talented employees in workplace which helped to
produce best quality vehicle.
Weakness includes -
 Limited products – Limited range of their vehicles creates negativity for organization in
the form decreasing profit. The reason for this weakness are their products are very
expensive and lower middle class segments are not able to afford this price.
 Focus on selected models – Land Rover mostly focus on upper class models in their
product because in this all specifications are already installed. This model is basically
based on high income people and it create negative impact to organization in aspect of
sales.
Opportunities includes -
 Market expansion - Land Rover expand their market in various Asian and BRIC
nations with various strategies . It includes advertising, digital marketing which leads to
increase the sale of their product in various countries. In various nations their vehicles are
liked by people very much and their sales also increased.
 Use of OEM – In OEM organization used original equipments for manufacture the best
quality vehicle (Bathmanathan, Rajadurai and Sohail, 2018). The use of original
equipments helped to maintain the durability of product for a long time and customer also
become loyal towards organization.
Threats includes -
 Market competition – Land Rover is the leading automobile company in market but
they faced various challenges by competitors such as BMW and Audi which creates
threats to them. For example competitors theft the personal informations of company
consumers with the help of technology.
 Geopolitical risk – For producing best quality product in workplace organization are
using carbon footprint which is harmful for humans and environment. It leads to decrease
the productivity of organization because due to use of carbon footprint shortage of raw
materials are increased.

Value chain analysis model -
It is a set of actions which is used by company for developing value in their products
towards the consumers. In this method various stages are followed by company to carry out the
operational activities smoothly. In context to Land Rover, management used these stages for
serving best quality services to customers which are described below -
Support activities -
 Firm infrastructure – It refers to the overall architecture of the organization which was
established by the top level management with the help of various equipments. In context
to Land Rover, management established various safety standards in workplace or in show
rooms for employees. These safety standards helped the employees to increase their
productivity and also for maintain good relations with consumers for long time.
 Human resource management – The role of human resource management is to manage
the overall activities of organization. In context to Land Rover, management is mostly
focused on skills and talent of the employees in workplace for maintaining the stability in
operational activities. In COVID-19, HR played major role for maintaining the optimum
utilization of human resources.
 Technology – It refers to the various equipments which are used in organization by the
employees for produce the best quality product. In context to Land Rover, they used the
technology in their product effectively to facilitate unique features to customers. It
includes availability of auto gear transmission, effective fuel efficiency system and so on.
 Procurement – It refers to the purchase of raw materials from various suppliers which
includes machinery, laboratory equipments, office equipments and information system. In
context to Land Rover, management used these equipments to made a research and
customize in their product before deliver to customers.
Primary activities -
 Inbound logistics – It refers to the internal activities which was done by organization
which includes storing, receiving and material handling. In context to Land Rover
management maintained their internal logistics systematically with the help of effective
distribution channels. These distribution channels are connected with various suppliers

(Hemphill and White III, 2018) which leads to increase the availability of raw materials
from suppliers to company time to time for preparing product.
 Production – It refers to produce the product in workplace with the help of using latest
equipments by the employees. In context to Land Rover faced lot of problems for
maintaining the production effectively in COVID 19. Because at that time lock down was
implemented by government and due lock down suppliers are not able to send raw
materials to company which leads to decrease productivity.
 Outbound Logistics – It refers to those activities which are done by organization
externally which includes transportation, storing the finished product in various
warehouses etc (Hernández-Abreo, Abreo-Pinzón and Bohorquez-Chacón, 2018). In
context to Land Rover, they managed the effective supply chain management for
delivering the right product to consumers at right place such as transportation through
roads, water and air ways.
 Marketing and sales – It refers to promote and popularise the product through various
ways which includes advertising, digital marketing and so on. In context to Land Rover
management used special method for popularise their product market which include
exhibition of their vehicle in various malls. It leads to attract the customer in large
number.
 Services – It refers to those facilities which are provided by company to customers for
making the product safe and secure. It includes vehicle equipments, insurance and
policies and so on. In context Land Rover, management facilitate beneficial policies to
customers which includes accidental policy and replace policy of vehicle parts in free of
cost.
External factors refer to those factors which are uncontrollable by company and it effects the
performance and growth of organization (Hung, 2019). In context to Land Rover, they use
different types of methods for evaluating the competitors which are described below -
PESTEL Analysis -
PESTEL Analysis is used by company for monitor and analyse the macro external factors
which was facing by them are described below -

 Political - It refers to those factors which effects the organization politically which
includes taxation, government laws and regulations and so on. In context to Land Rover
established stable and friendly business environment with the help of various
stakeholders which includes suppliers investors etc. And these stable environment helped
to maintain the organizational performance good.
 Economical – It refers to those which effects the organization economically and it
includes salaries, tax rates, governmental functions and so on. In context to Land Rover,
management must initiated the various employment policies effectively which is highly
favourable for workers. It leads to increase the productivity of employees and
organization in long term.
 Social – It is a set of those actions which influenced the customer behaviour and it
includes culture and subculture, social class groups etc. (Kahiya, 2020). In context to
Land Rover, management are highly focused on demographics it means the high income
consumers for sell their product. Because their product are very expensive and high class
segmented consumers liked their product which leads to decrease their profit.
 Technological – In this factor organization used various technologies for produce their
product in best quality. It includes production equipments, information and
communication sources etc. In context to Land Rover, management used their technology
in their product to increase the uniqueness and specifications of vehicle from other
competitors.
 Environmental – It refers to those factors which affects the organization naturally which
includes temperature, food, population density, light and so on (Malim, and Normalini,
2018). In context to Land Rover, management used special strategy to reduce the carbon
foot print from company and in this strategy they used remove, reuse and recycle plan.
This plan helped to main the optimum utilization of resources in workplace.

 Legal - It refers to legal norms, government rules and regulations factors which affects
the organization legally and it create direct impact to the company. In context to Land
Rover, management followed the employment laws of government. According to these
laws company established safety standards in their company for increasing the workforce
of workers.
Porters five force model -
It is a method which is utilized by company for evaluating the competitive advantage in
the market. The factors which are followed by organization for evaluation are described below -
 Threat of new entrants (High) – It refers to the entry of new product in the market by
competitor with new specifications. This create highly threat to organizations product. In
context to Land Rover, management highly focused on research and development which
leads to create unique and different products from other competitors.
 Threat of substitute products (Moderate) – It refers to facilitate the same vehicle
equipments to customers at low price from other competitors. In context to Land Rover,
management must facilitate wide range of vehicle equipments to consumers. Because
availability of these equipments are essential at the service for maintaining the trust of
customers.
 Bargaining power of suppliers (High) – It means that suppliers keep pressure on
company for increasing the price in their product (Mirza, Malek, and Abdul Hamid,
2018). In context to Land Rover, they maintained margin in their price effectively which
leads to increase the profit of suppliers at the time of selling product.
 Bargaining power of buyers (Low) – It refers to negotiate the prices from the
manufacturer for purchasing the product in profitable price. But in context of Land Rover
it is not necessary for them because they already have customers in high segment and
they are loyal towards them.
Critical evaluation of challenges in internal analysis
 Lack of honesty – It occurs when services are not properly provided to customers and
employees by the organization. In context to Land Rover, management used various
safety standards in the workplace for maintaining the trust of employees. And also

established effective supply chain management for maintaining proper communication
between employees and customers.
 Low employee productivity – It only occurs when employee did not do the work
energetically. In COVID 19 productivity of organization are highly decreased due to loss
of jobs. In context to Land Rover, management used various methods to maintain the
trust of the employees and also for increase their productivity. It includes financial
benefits such as increment, bonus and incentives.
Critical evaluation of challenges in external analysis
 Strong industry competition – Currently competition is very high in automobile
industry. Because other competitors are also facilitate same features at same price which
creates threats to organization. In context to Land Rover management made lot of
investment in their product for develop unique specifications in their product.
 Use of technology – Technology is a very important asset for organization for maintain
good communication with customers for a long time (Taouab and Issor, 2019). Land
Rover is one of the company who used advanced technologies in their product but
company faced challenges to use this technology in aspect of expense . In context to Land
Rover, management inserted various tech innovations in their product for increasing
customer satisfaction level.

CONCLUSION
After the evaluation of above information it is understood that good businesses
environment is essential for maintaining positive relation with stakeholders for long time. It also
leads to increase the work efficiency and productivity of whole organization. For evaluating the
business environment various strategies are used by company which includes SWOT Analysis,
PESTEL Analysis, Porters five force model and others. These models are helped to run the
operational activities smoothly. Technology is a very important asset for organization to run their
operational activities smoothly. Because without technology products are not produced and
deliver to consumers in time.

REFERENCES
Books and Journals
Abbas, M., Idrees, N. and Rehman, U., 2020. Workplace Spirituality and Job Satisfaction:
Evidence from Pharmaceutical Industry of Karachi, Pakistan. Global Business
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Alharahsheh, H. H. and Pius, A., 2021. Exploration of Employability Skills in Business
Management Studies Within Higher Education Levels: Systematic Literature
Review. Research Anthology on Business and Technical Education in the Information
Era, pp.1147-1164.
Bathmanathan, V., Rajadurai, J. and Sohail, M. S., 2018. Generational consumer patterns: A
document analysis method. Global Business and Management Research, 10(3), pp.958-
970.
Belderbos, R., Du, H. S. and Slangen, A., 2020. When do firms choose global cities as foreign
investment locations within countries? The roles of contextual distance, knowledge
intensity, and target-country experience. Journal of World Business, 55(1), p.101022.
Hemphill, T. A. and White III, G. O., 2018. Multinational enterprises, employee safety and the
socially responsible supply chain: The case of Bangladesh and the apparel
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Malim, N. A. K. and Normalini, M. K., 2018. Factors Influencing the Margins of Islamic
Banks. Global Business Review, 19(4), pp.1026-1036.
Mirza, A., Malek, M. and Abdul Hamid, M. A., 2018. Value relevance of earnings and book
value of equity: Evidence from Malaysia. Global Business Management Review, 10(2),
pp.19-40.
Ozturk, A. and Cavusgil, S. T., 2019. Global convergence of consumer spending:
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Taouab, O. and Issor, Z., 2019. Firm performance: Definition and measurement
models. European Scientific Journal, 15(1), pp.93-106.
Thangavel, P., Pathak, P. and Chandra, B., 2019. Consumer decision-making style of gen Z: A
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