Environmental Analysis of Automobile Industry

This report covers Swot analysis, Pestle analysis to analyse environmental internal and external factors. along with that Porter’s five forces, value chain and competitive advantages concerning organisational core value on sustainability are mentioned in this project report.

Environmental
Analysis of Automobile
Industry

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Swot analysis...............................................................................................................................3
Pestle analysis..............................................................................................................................4
Porter’s five forces.......................................................................................................................5
Value chain model.......................................................................................................................6
Competitive advantages...............................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Environmental analysis is defined as the strategical tool which is used by organisation for
accessing internal as well as external elements of environment that can impact business
performance and functionality. Analysation to environmental factors facilitates business to assess
the level of threats and opportunities that present in global environment. It helps business to take
efficient decision-making and lead business towards gaining competitive advantages.
Analysation of global business environment enable business to align strategies with environment.
In this report chosen organisation is Jaguar which is British multinational car manufacturer
founded in 1935 by Jaguar Land Rover. Headquarter of respective organisation situated in
Whitley, England, United Kingdom. Jaguar organisation provides its cars worldwide. This report
covers Swot analysis, Pestle analysis to analyse environmental internal and external factors.
along with that Porter’s five forces, value chain and competitive advantages concerning
organisational core value on sustainability are mentioned in this project report.
TASK
Swot analysis
Swot analysis is considered as the strategic framework which is undertake by
organisation for analyse organisational strengths, weaknesses, opportunities and threats that
enable business to formulate effective strategies accordingly and gain competitive advantages in
global business environment. Factors of swot analysis in the context of Jaguar are mentioned
below:
Strengths
 Jaguar is the leading luxurious car
manufacturer in the world and has well-
trained as well as motivated workforce
who try to better experience to
customers with organisational products
(Bux, Zhang and Ahmad, 2020).
 Jaguar belongs to exclusive car
segment which is good brand image.
respective organisation giving tough
Weaknesses
 Jaguar offers range of car to its
customers but as compared to its
competitors it has less range of car. In
order to attract potential buyer’s
organisation, have to expand its product
range.
 Prices of Jaguar brand car are too high
as compared to SUV and other luxury
cars.

competition to new brand in same
luxury segment.
 Jaguar marketing strategies are
effective that helps business to attain
high profits as well as maintain good
brand image.
Opportunities
 In the era of hybrid technology number
of car manufacturer began to
concentrate on this area. Then Jaguar
can start manufacturing hybrid cars
which is the opportunity for
organisation.
 As per the raising disposable income of
people, their spend on luxurious car has
increased. It is the opportunity to boost
their revenue and market share.
Threats
 Intense competition is faced by Jaguar
from its near competitors such as
Bently, Mercedes, Audi and various
other that impacts organisational
profitability and functionality
(Chandak, Chandak and Dalpati, 2019).
 Some financial instability conditions
such as recession or depression has
reduced the consumption by
individuals. It creates threats to
business through reducing sale of
luxury cars.
Pestle analysis
Pestle analysis is defined as the framework that is undertaken by organisation for
evaluating external environmental factors that impacts business performance and functionality.
Following description of pestle analysis describes the factors that affect the Jaguar business and
how respective organisation address them to work efficiently. These factors are mentioned
below:
Political factors: Political stability is the most essential factor that affect the organisation
like Jaguar if they are going to expand their manufacturing in other country (Jermsittiparsert,
Siriattakul and Wattanapongphasuk, 2019). Fluctuation in taxation rates that are decide by the
government also impacts decision-making process of organisation. introduction of fuel
consumption tax as well as environmental tax are followed by Jaguar to make vehicles more fuel

efficient. Respective organisation analyse these factors and implement them in organisation to
gain competitive advantages.
Economic factors: Regular changes in the pattern of government spending impacts on the
methods of payment of production and development of Jaguar. Along with that reduction of
government investment in car industry impacts on development of Jaguar. Increase infrastructure
development helps in making more transport links that enhance organisation production and
distribution.
Social factors: Continuous changes in society trends impacts on business performance.
Jaguar understands religious value, people beliefs and living standards of certain religion that
help business to align with current trends and gain high profitability. respective organisation
meets all ethical procedure of different country in which it conducting its operations that ensures
smooth trade between customers and suppliers (Shafique and Luo, 2019). Increasing population
is also the factor that improve organisational production.
Technological factors: Jaguar is the brand which is known for using cutting edge in car
designs and manufacturing. Organisation has expertise in aluminium technology that helps
business to produce light weighted and efficient cars. Jaguar implements various technologies for
the purpose of eliminating driving error as well as safe road journey.
Legal factors: Government has introduced various rules and legislations that have to
fulfilled by organisations for carry business operation in successful manner. Jaguar is the
organisation which is registered for its patents and copyrights that protect organisation to selling
fake products with similar names. Respective organisation follows all employment laws, trade
law and various other that help business to run operations in efficient manner.
Environmental factors: Jaguar concentrates on addressing environmental issues and take
various actions to protect environment from harmful impacts. Respective organisation
implements legislations that ensures minimum emission as well as wastages. Jaguar work
towards creating fuel efficient car designs through using recyclable material such as aluminium.
There is various initiatives regarding environment are taken by organisation through focusing on
promoting renewable energy resources.
Porter’s five forces
Porter’s five forces analysation is defined as the strategic management tool that help
business to analyse industry as well as understand the level of profitability in specific industry.

Jaguar managers uses the model to understand how five competitive forces influence
organisational profitability and develop strategies. These forces in the context of Jaguar
organisation are mentioned below:
Threats of new entrants: If industry generates high profit, then number of new brands
enter in industry that impacts on profitability and market share of existing organisation in
industry. Jaguar faces high threat of new entrants’ science there is no requirement of high
investment in technology. Without any economies of scale being seen in industry and there is
low barriers of entry are exist in industry.
Bargaining power of suppliers: Suppliers are the persons who provides raw material and
other information to business that helps business to produce final products according to market
requirements. Bargaining power of buyers is low for Jaguar as there is high number of suppliers
are available for organisation who provides quality products at affordable rates (Sun and Wang,
2018). Jaguar can switch to other supplier that reduce their power.
Bargaining power of buyers: Buyers are defined as person who are ready to pay to
acquire products. Buyers want to get quality products at their desirable prices that impacts
business profitability ratio. Bargaining power of buyers is high for automobile industry because
there is higher suppliers of luxury car are available in market so, buyers have option to switch
one brand to another according to their convivences.
Threats of substitute products: Substitute products are the items that provides same value
to customers. Threat of substitute products is low for car industry because there is no replacement
is available in market. Jaguar regularly bring new features and innovation in its cars that
differentiate brand from other substitute products (Popek, 2017). Respective organisation analyse
needs, demands and preferences of customers than develop products accordingly that helps
business to gain success and competitive advantages in industry.
Rivalry among existing competitors: Competitors are the organisation which has power
to impacts business performance and functionality in efficient manner. Jaguar faces high level of
competition from its competitive brands such as Mercedes, Audi and others. These brands also
provide luxurious cars that limits Jaguar market share and profitability. Respective organisation
brings innovation in cars to make strong positioning in market than other competitors.

Value chain model
Value chain model is defined as the collection of processes that are performed by
organisation for the purpose of creating value for their customers that provides competitive
advantages to organisation than other competitors. In this model primary and well as
supportive activities are included that are mentioned below:
Primary activities:
Inbound logistics: Inbound logistics are the primary activities that includes various
operations that are conducted by the Jaguar such as warehousing, controlling inventory and raw
material. Inbound logistics also related to maintaining relationships with suppliers.
Operations: Operations are related to the process which included turning raw material
into finished products which are ready for slae that includes branding, labelling and packaging.
Jaguar uses high quality material for producing luxury cars according to requirement of
customers.
Outbound logistics: Outbound logistics are related to the process through which final
products and services to delivered to customers (Xiong, Ji and Ma, 2020). In this activity storage
and distribution of products as well as process that fulfilled customers orders are included that
help Jaguar to deliver high experience to customers.
Marketing and sales: Marketing and sales is the primary activity of an organisation that
enhance visibility of organisational products among customers and persuade them to purchase
organisational products and services. Jaguar conducts social media advertisements to promote its
cars among targeted audiences.
Services: Services are defined as the activity which take place after sale that includes
repairing, warranty acknowledgement and others. Jaguar provides high class services to its
customers that help business to retain customers with organisation for longer period of time.
Secondary activities: Secondary or supportive activities supports foundational primary activities
of business that enable business to run operations is efficient manner. Some supportive activitirs
are mentioned below:
Company infrastructure: Organisational infrastructure is the process that support daily
operations of Jaguar such as administration, financial, management and other functions. It helps
business to gain sustainable competitive advantages over other competitors.

Human resource management: HRM is the process which is related to provide training,
acquisition as well as termination of employees. Jaguar HR department ensures that talented,
motivated and skilled staff members are hired in business who cam perform business operations
in efficient manner and lead business towards success.
Research and development: Jaguar conduct proper research in market to analyse current
trends and customers needs and requirement that help business to gain competitive advantages.
In this activity payroll automation software, distribution network, customer service process are
included that enable Jaguar to run operations on smooth manner.
Procurement: It is related to acquisition of necessary goods and services. Jaguar gain raw
material and negotiation of pricing of products that facilitates organisation to produce quality
products and satisfy customers needs and demands.
Competitive advantages
Competitive advantages is defined as the factor that enable an organisation to produce goods and
services in most efficient manner and more cheaper than other rivals. Jaguar put various efforts
to make own products differentiate from other competitors that facilitate business to generate
high sales and margin them other organisations (Zhai and An, 2020). Respective organisation
gains sustainable competitive advantages through concerning its core values and sustainability.
These factors are mentioned below:
 Core value of Jaguar is respect, compassion and humanity. Respective organisation care
its customers and colleagues all over the world. Major objective of organisation is to
produce high standard car for customers that fulfil their needs and provide better
experience with organisation. Organisational core value provides competitive advantages
to organisation because it retains potential customers with organisation and enhance sales
as well as profitability as compared to other competitors.
 Jaguar adopts various sustainable approaches such as adopting latest technologies that
reduce carbon emission to protect environment from harmful impacts. Now these days,
customers are more conscious regarding environment so, adoption of sustainable
approach helps business to gain sustainable competitive advantages. Jaguar take actions
to create fuel efficient car designs by using recyclable material such as aluminium. There
is various initiatives regarding environment are taken by organisation through focusing

on promoting renewable energy resources. All these actions facilitates business to
maintain strong positioning in market and enhance organisational sales.
CONCLUSION
As per above report, it can be concluded that proper environmental analysis facilitates
business to survive in competitive business environment. In environment analysis various
internal and external factors are included that helps business to make efficient decisions.
Business uses various models such as Swot analysis, pestle analysis to analyse different factors
that impacts business performance and functionality in efficient manner. In order to conduct
business operations in other country, organisation analyse these factors that help business to gain
competitive advantages.

REFERENCES
Books and Journals
Bux, H., Zhang, Z. and Ahmad, N., 2020. Promoting sustainability through corporate social
responsibility implementation in the manufacturing industry: An empirical analysis of
barriers using the ISM‐MICMAC approach. Corporate Social Responsibility and
Environmental Management, 27(4), pp.1729-1748.
Chandak, A., Chandak, S. and Dalpati, A., 2019. The analysis of impact of critical dimensions on
performance in context of supply chain: evidence from Indian automobile
industry. Proceedings of Recent Advances in Interdisciplinary Trends in Engineering &
Applications (RAITEA).
Jermsittiparsert, K., Siriattakul, P. and Wattanapongphasuk, S., 2019. Determining the
environmental performance of Indonesian SMEs influence by green supply chain
practices with moderating role of green HR practices. International Journal of Supply
Chain Management, 8(3), pp.59-70.
Shafique, M. and Luo, X., 2019. Nanotechnology in transportation vehicles: An overview of its
applications, environmental, health and safety concerns. Materials, 12(15), p.2493.
Sun, S. and Wang, W., 2018. Analysis on the market evolution of new energy vehicle based on
population competition model. Transportation Research Part D: Transport and
Environment, 65, pp.36-50.
Xiong, S., Ji, J. and Ma, X., 2020. Environmental and economic evaluation of remanufacturing
lithium-ion batteries from electric vehicles. Waste Management, 102, pp.579-586.
Zhai, X. and An, Y., 2020. Analyzing influencing factors of green transformation in China’s
manufacturing industry under environmental regulation: A structural equation
model. Journal of Cleaner Production, 251, p.119760.
Raza, Z., 2020. Effects of regulation-driven green innovations on short sea shipping's
environmental and economic performance. Transportation Research Part D: Transport
and Environment, 84, p.102340.
Popek, E.P., 2017. Sampling and analysis of environmental chemical pollutants: a complete guide.
Elsevier.