Environmental Analysis of an industry - Assignment

Environmental
Analysis of an
industry

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
a) Electric Vehicle in Europe: gearing up for a new phase and major forces that are shaping
business environment..................................................................................................................3
Industry has changed in last few years........................................................................................6
Reason of drive towards the production of electric cars.............................................................8
b) New and emerging business opportunities.............................................................................9
Critically assenment of other business......................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Global business environment referes an environment in different countries that affects the
busienss decisions. All companies are planning to expand their business in other country for the
purpose of making profits. Therefore, it is important for organization to focus on environemntal
factors and make efforts to keep it clean (Frumkin, ed., 2016). Environmental analysis is a
strategic tool which is used by companies to identify the inetrnal and external factors that can
impact on business's performance. This analysis gives an opportunity to business industry by
exapnding the business globally. Global environment consider trade laws, environmental laws
and other regulations to that influences buisness ability and profitability. This report is depend on
“Electric Vehicle in Europe” gearing up for new phase that helps to save the environement by
launching electrical cars. For understanding this Volvo cars has been taken that is consider as
example. This is big brand that manufacturesv different types of cars and maintains luxury
vehicles. Vovlo group was founded in 1927 as subsidary of ball bearing manufacturer SKF.
Further, this report consist PESTLE nalayis of car industry, Porter five forces that helps to face
the competition and give competitive advantages. Moreover, it defines difference between
previous years and presenting years regarding car industry (Ergai and et. al., 2016).
MAIN BODY
a) Electric Vehicle in Europe: gearing up for a new phase and major forces that are shaping
business environment
In current market, here many thing has been changed after adopting new technology that
helped to increase the business as well as performance of business organization. The main aim of
business industry is to expand their business by launching new products and services that attracts
customers by increasing productivity. Such as Volvo cars has adopted new technology by
analysing the environemnt and introduced new products. Electricity mobility is related with
eletrification of the automotive powertrain that covers electric vehicles for which belectric motor
is the primary source of actuation. The electric mobility in Europe is driven by three forces that
shaping the business environment of car industry (Schreiber and et. al., 2016). Forces are defined
as:
Consumer demand: This means demand and taste of consumers are cahning day by day
which is important for organization to build different designing products and increase

sustainabiliy. Such as consumer demand is adopted by Europe in 2013. in starting it restrics
specific people in Europe due to having high cost range anxiety and low awarenesss that was
challenged for car industry. McKinsey researched on EV adapters in Shanghai, New York and
Paris in which group are of high income with didffeerent set of attitude and behaviour. This
research has defined in market there are two group that are trendy greens and TCO sensititives.
Trendy greens means person who are environmentally conscious and willling to try new
technology where as TCO sensitives means care about total cost of ownership, willing to change
travel habbits.
Therefore, car industry has consider design, brand and performance by adopting EV
emerge. In Electric Vehicle it conisder various factor which are as carbon footprint reduction,
driving and usage benefits and cost saving cars. The main reason of launching Evs to reduce the
carbon foot print that helps to save the environment and customers willing to pay premium for
the zero or low emission alternatives to ICE. Another benefit is driving and usage that helps
organization for increasing sale of Evs. It gives a benefit of saving time during rush hours. It also
has been seen that without subsidies EV is more expensive than ICE cars that might be difficult
for customers to purchase cars. Therefore, goverenment supports EV cars than become cheaper
then ICE and helps to save environment. Thus Volvo has decided to lauch Electric Vehicles for
the purpose of reducing carbon foot print, saving cost and give advantages of driving as it helps
to save time. Volvo has launched cars with good battery back up and maintaining a speed level.
Industry deveopment: For developing the car industry and getting competitive advantages
many companies followed new marketing trends that helped to increase awareness and
importance of new products. Therefore, this force also helps to giving a new share to car
industry. Such as EV modles releases in 2010 and in 2014 it estimates that it launch 60 new
models y including HEVs in to a production (Mazzi and et. al., 2017).

This digram states the number of EV models launches doubled in 2013 as compare to
2012, that means project grow by 50% in 2014. This trend shows car industry is growing
continusously. In car industry it has also seen that current sale number as well as planned sale
defines that PHEVs and BEVs will be dominant EV powertrains in near future. There is need to
have more diversity and more availability of EV cars on the market that helps to meet with
cunsumer segment by making EV attractive to a large audience. Therefore it is a opportunity for
Volvo to add more value of its products by adding more attractive features like light weight
carbon fibre result lower weight of cars and helps to increase range. Charging infrastructure that
become standardized and cost coming down as result economy of scale is growing fast (Prüss-
Üstün and et. al., 2016).
Government Stimulus: This means to varifying degrees, government are promoting Evs
across Europe by offering subsidies and other benefits, which is on demand and supply side.
Reducing emissions is one of the key reason for improving environment and making profits. It
can be understand that tightening regulations are pressing OEMs to reduce their fleet emissions
which can be a challenge with ICE optimization alone. Government regulations helps in shaping
a new car industry that attracts people and improves sale of such industry golbally (Simon,
Amor and Földényi, 2016).

Moreover, CO2, regulation of Nox emmision is also strict with EU Air quality directive
of 2008. Resulting, cities are taking steps to promote electricity mobility.
Industry has changed in last few years
Since two years it has been seen that car induystry is changing continuously due to
changing in automotive industry. All companies are making efforts to launching new cars with
new feathures by using new technology. Such as in 2017 car industry has introduced electric cars
that helps to save environment and cost of such cars. It aws the landmark year for Volvo and
other car industry to launch electric cars participate in global environment. At present
goverenment is giving subsidies to car industries for improving I their products and increase
mobility. For instance, Estonia has installed cars with fasrt charger with the help of country.
Estonia committed to use the revenues to promote a widespread use of cars that means introduce
electric vehicles for using by public facilities, improving infrastructure of EV and provide
subsity to consumers who are purchasing electric cars. On the other side, it has been seen that
people are more concerned about protecting environment from pollution. So that they are
showing their interest in electric cars to save environement by launching EV. Therefore,
industryu is chaning rapidly by adopting new technology that helps to provide clean
environment. Such as Volvo has launched five electric cars between the year 2019 to 2021. In
Europe automobile industry is tring to adopt more changes such as special model of Renault

fluence cars that means battery swapping and indusction charing cars for saving environment.
This movement has changed the car indudtry that has manufactured different hybrid concept cars
since the 1992. Thus, it can be said that industry is changing last few years (Latunussa and et. al.,
2016).
Critical assessment of the organisation and other changes that may take place in the future and
the reason of such changes –
It has been assesed that organization need to make changes in their product because
people are highly conscious about their health that was going down due to pllution. The prices of
fuel are also increasing that reducing the sale of cars in EU. Due to this reason car industry has
planned to introduce new changes in their cars that is Electric cars. After launching electric cars
the sale of such industry has doubled than past years and increasing continiously. Such as Volvo
cars, Volks vagon, BMW group etc. has launched electric cars after chaning the infrastructure
that helps to maintain the profit. In present companies are follwing “mobility as a service” that
uws embraced by OEM and consumers. These changes may take place in future such as it will
helps to save fuel and health of people. Countries can improve their economy of scale by
launching electric and charging induction cars that will helps to profitability (Hossain and et. al.,
2016).

Reason of drive towards the production of electric cars
The main reason behind production of electric cars is to reduce the air pollution and make
clean environement that is most important for living a good life. By producing electric cars
volatile organic compounds, hydrocarbons, carbon monoxide, ozone, lead and various oxides can
be control and air pollution also can be control. This model is used in context to Volvo company
twho is a market leader in automobile sector. To know the reason effectively porter five forces
model is used by car industry that helps to also gain competitive advantages. First competitive
forces is competitive rivalry (Tian and et. al., 2017).
In case of Electric vehicle, competitive rivalry is high as the deamand and interest of
people are changing continuosuly towards vehicle that does not harm environment in any kind.
This force become a burden for car manufacturing industry as they need to change their fuel
based car to electric cars. Many branded companies like Tesla, Volvo, Bentley motor etc are
taking steps to bring electric cars, that become reason of high comeptitive rivalry. The bargaining
power of buyers is low in market because electrric car is a new concept and people have much
access to electrified cars. Due to this interested customers have to purchase car at high prices that
shows their status. Next force is bargaining power of supplier that shapes up to any industry
which is moderate in car industry. The reason of high bargaining power of supplier is
components which is needed yto manufacture electric cars are very available at few place due to
which suppliers can charge extra amount from car industry as they have monopoly (Villa and et.
al., 2016).
Other force is threat of subsitutes that is very low because electric car do not require fules
and helps to prevent environment from combustion, pollution, ozone depletion etc. In present
market there is not substitute of electric car due to having new concept that helps to gain
competitive advantages in business environment. Last one force is threat of new entrants which
is also low in business environment. The reason behind low new entrants in market that is to start
business in automobile sector there is require of heavy investment which is not easy for new
business. All forces shows that car industry such as Volvo does not have no threat from new
entrants that helps to gain competitive advantages. In context of Volvo car, competitive rivalry,
bargaining power of buyer is high and bargaining power of supplier, threat of substitutes of low
which does not impact negatively on working of such organization (Serres, Braymand and
Feugeas, 2016).

b) New and emerging business opportunities
Changes in automobile sector take places fast by adopting new technology that creates
good opportunities for business industry. This sector is linked with other organization like ICT
services, mobility and repairing that helps to increase the GDP globally. At present, there are
many external changes that take place in future. All changes impacts automobile sector and
electrification of cars. To know the impact of changes PESTLE analyis is used by country that
helps to make changes. Political factors can be consider as favour of Auto mobile sector such as
government is around globe mostly Europe favours because it focuses on low carbon emission.
As governement is increasing tax rate for fuel day by day due to this companies prefer
substitution of fuel that is electricity. In future, this aspect take a place if governement has ban
cars with combustion engines. In that situation electricity which is renewable source of energy
will be used by car industries in order to manufacture electric cars. Economic condition of UK,
Europe, France, Spain is good and people are prefering to spend money on desinging and luxury
cars. But due to recessions and economic crisis people can stop spend money on buying
expensive cars which operates by fuel. So this factor take place in future as sale of company can
be reduce. In that case, electric cars which is manufacturing by industry will be preferred.
For social factor, European's society is broad minded and educated which knows that
which product is good for them. They are prefering electric cars in future than fuel cars that will
help to cut extra cost o fuel and will also help to prevent ecology from having harm. Currently,
automobile sector is highly updated about high technology for producing combustion engine. In
upcoming day such advance technology will helps to prepare electric engines for the purpose of
manufacturing electric cars. It can be said that if Volvo do not avail this technology then other
firm can grab such opportunity. In present government does not bounding auto mobile industries
that helps to run a business effectively. If environment is impacted negatively in future due to
increasing carbon- dioxide that will become difficult for living to sustain. In that case,
governmnet has to stopped fuel cars then organization can orgin electric cars that helps to sustain
in competitive environment. Last factor is legal factor which is needed to follow by car industries
to retain employees for long term and should provide better quality of products. If organization
do not follow legal regulation then it will be highly penalized (Suh and Lee, 2017).
Therefore, new and emerging busieness opportunities such as electric cars crates an
opportunities for business organization as it helps to change mindset of people and increase

profitability. Marketing of electric cars will help to create interest of people and emphasis them
to purchase electric cars.
Critically assenment of other business
On the other side other businesses like Toyota, Jaguar, Bentley motors industry are
currently linked to the global automobile industry that is more profitable for business
organization as they are adopting new technology in their business by investing amounts. These
businesses can face downfall in upcoming years in case of automobile sector drift towards
electric cars instead of fuel cars. People will stop to buy petrol or disel basis opperating cars
while increasing uses of electric cars. As result petrol organizations's profit can be reduced in
future that is linked with other business.
CONCLUSION
From the mentioned eassy, it has been concluded that environmental analysis of an
industry impacts on busiensses whether positively or negatively. By using PESTLE anslysi and
porter five forces model automobile sector get competitive advantages and create more business
opportunities. In present people are health consious, educated and well updated about new
technology that helps to enjoy new products with new infrastructure. Automobile sector is facing
a transition where tradition cars are operated by fuels and electric cars are operated by solar
energy that do not harm global business environment.

REFERENCES
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