Forces Shaping the Car Manufacturing Industry

This report analyzes the major forces shaping the business environment of the car manufacturing industry and how it has changed in recent years. It also critically assesses other businesses currently linked to the global automotive industry that may not be profitable in the long run. The report focuses on Volvo Group as a case study and discusses the emergence of electric cars and their impact on the industry.

Global Business
Environment-2

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Explain the major forces shaping the business environment of the car manufacturing industry.
In your analysis, you should explain how the industry has changed in the last few years..........3
Identify and critically assess other businesses currently linked to the global automotive
industry which may not be profitable in the long run to invest in...............................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Global Business Environment defines the three different terms which describe the reality of
the nature of international trade that include the fundamental way of the result of various forces
that shape the nature and dynamics of global commerce. In this context Global Business is
broadly considered as the integrated increasing environment which includes technological
advancement competitive dynamics and intercultural effectiveness in order to conduct
international business. Moreover Global Business Environment is classified into external and
internal environment and includes various Frameworks with it in order to analyse the market
condition. Global Business also includes the Global Traders for the growth of business that
require business people and Organisation by involving them in the globalised world (Kasemsap,
2018). Therefore involving within the global environment is become beneficial for the company
but it is also risky as it includes various changes with it.
In order to carry forward this report Volvo group is considered which is a Swedish global
manufacturing company founded in 1927 and headquarter in Sweden. Company deals in various
activities including manufacturing distributing and selling of buses cars trucks and other
construction equipments. Moreover this report is going to cover the prominent forces which
shape the business environment and also leads to change the industry in the upcoming years at
also provide the critical assessment regarding the various changes that takes place in the future in
the automotive industry which drive towards the production of electric car in order to gain
competitive advantage.
MAIN BODY
Explain the major forces shaping the business environment of the car manufacturing industry. In
your analysis, you should explain how the industry has changed in the last few years
By considering the emerging trends of electric vehicles they are entirely different from the
entire internal combustion engine. Moreover it leads to develop opportunities for the charging
stations and increase their business as the electric car is charged at EV charging station and it is
also child at the home and other private charging station. In this context it also leads to develop
the training centres along with the charging station repair business. Therefore the new imaging
business opportunities regarding the production of electric cars is analysed with the help of two
prominent frameworks:

Product life cycle
It is considered as the new product progress process which describes the sequence of
stages from the introduction to the growth maturity and decline and it is associated with
prominent changes within the market which is impacted because of marketing strategy and
marketing mix. Therefore the prominent stages regarding the product of Volvo xc40 that is an
electric car is described as under:
Introduction: By considering this stage Volvo tries to develop its product that is Volvo
xc40 within the market in order to develop product awareness among their customers and market
for their product. In relation with this it is impacted by various marketing mix factors including
the product which describe that the techniques and material which is used in order to develop
their car is more innovative and creative which is useful in attracting prominent number of
customers and also developed under the intellectual property protection with the prominent
patents and trademarks (Lasserre, 2017). The pricing factor describe that Volvo use premium
pricing in order to sell their product as Volvo only deals in luxury products by targeting premium
customers. Its promotion factor describe that Volvo promote its xc40 electric car with the help of
various promotion tools including magazines pop up ads and social media.
Growth: This state is concerned with the growth of product in terms of increasing the
sales and profitability. It is considered as the benefit for the company and economy of scale in
terms of production profit margin and overall account which is increased because of the good
sale of product (Lee, 2017). By considering the product that is sold by Volvo which is xc40 it is
an electric car which is more sustainable and can easily attract the attention of customers because
it is more environments friendly. Due to its prominent features company leads to achieve growth
for its product.
Maturity: It is a stage in which the purpose of Volvo is to maintain the market share
within the business environment as in this company try to achieve competitive advantage and
does not focus on the quality of product at the time many organizations neglect quality for the
product by focusing on the profit margin (Hamilton and Webster, 2018). In relation with Volvo
this makes things possible for the business in order to invest more money within the promotional
activity in order to increase the potential of growth stage.
Decline: At this stage start using its worth for the product and each and every
organization face this stage for their product as every commodity has their life line. In this

context Volvo need to overcome from the decline stage by maintaining their product and
rejuvenating it by adding prominent values and features. Moreover company can reduce the cost
in order to offer it to the market segment.
Porter’s value chain
The value chain analysis is the combination of various system of an organisation that is
useful in making money and it is made up of several sub system that are useful in creating
products and services. Therefore this includes the process from start to finish. In this context it is
divided under two activities that are primary and supporting activities which has its various
components that are described in the context of Volvo xc40. Primary activities
Inbound Logistics: Inbound logistics consider warehousing inventory control and receiving
of the raw material of Volvo that are required in order to make their electric cars. It also
describes the relationship of company with their suppliers as the quality of product depends on
their relationship (Doh, Luthans and Slocum, 2016). In this context for Volvo xc40 inbound
logistics include the storing of products and receiving it from the manufacturer by considering
their plan to sell with the probable profit margin.
Operations: Operations include the process which is useful in transforming raw material into
final product and services that are ready to sell. It includes Changing of all inputs that are ready
by considering the output result. In this context Volvo xc40 consider adding labels and branding
of its product which is useful in adding value to the product.
Outbound Logistics: By considering this the activities that are useful in distributing the final
product to the consumer are considered as the outbound logistics. For this it includes the delivery
of product by considering the storage and distribution system from both the external and internal
environment that impacts the shipping of Volvo xc40. In this context it describes the storing of
products for the shipping to the actual shipping.
Marketing and sales: It describe the prominent strategies that are developed in order to
acquire the market area and also improve the visibility and target appropriate customers
including advertisement promotion pricing and so on (Keivanpour, Ait Kadi and Mascle, 2017).
Significantly these activities are conducted by Volvo in order to convince their customers in
order to purchase their Volvo xc40 electric car as it include various waste like advertisement on
social media and other channels and email list for email marketing.

Services: It includes those services that are useful in maintaining the product in order to
enhance the customer experience. As in terms of Volvo xc40 the maintenance include the proper
charging of car at the charging station find including this company also provide replacement
repairing warranty to their customers. Supporting activities
Procurement: It describes the acquisition of inputs or resources that are useful in developing
the prominent product and these are provided by suppliers. It includes the whole procedure by
which company obtains raw materials including the negotiation of prices with the suppliers and
providers. It is interlinked with the inbound logistics as because of this Volvo try to procure its
material and goods in order to resell it.
Human resource management: It is concerned with recruiting and retaining employees that
are useful in achieving the desired goals and objectives with the help of Designing marketing and
selling the product in the market (Pikhart, 2017). Therefore the managers of Volvo always try to
manage their employees which are useful in order to conduct primary activities by which
employees are influenced by considering the hiring requirements for marketing operations
logistics and so on.
Infrastructure: It describes the physical appearance of Volvo which is a support system and
allows prominent functions and department to maintain their operations. It also considers all the
accounting administrative and legal functions that are required for all the primary functions.
Technological development: In terms of Volvo technological development is useful in
conducting prominent research and development regarding their product Volvo xc40 which
include the design manufacturing technique and automating processes and also consider that the
doctor technology of Volvo is unique and innovative it is useful in attracting large number of
customer base and develop business opportunity for the company (Gooris and Peeters, 2016).
Therefore Volvo works more in order to eliminate the technology cost by shifting from the
hardware storage system including the technological development.
Identify and critically assess other businesses currently linked to the global automotive industry
which may not be profitable in the long run to invest in
By considering the arrival of electric cars within the market the industry which is impacted
is the engine oil industry as after the arrival of electric cars the engine which is used in normal
cars gets wasted. Within the electric cars, new technology and light engine is used in order to

make them more sustainable beneficial for the growth and development of environment. In this
context in order to develop sustainable and environment friendly product Volvo invest millions
of dollar in this emerging technology in order to stay relevant and develop Volvo xc40 with
prominent pretty looks and also identified within the standard of SUV. As the xc40 recharge is
powered by two significant electric motors which is the combination of 408 PS of power and 660
NM of torque. After the launch of electric car within the market that is planned by many brands
including Ford, Volkswagen, Tesla, Nissan and many more in order to survive within the
dynamic market. In this context with the arrival of electric cars the pollution get reduced and
environment start cleaning as there are a lot of pollution present in the environment and it is
getting out of control because of the carbon emission from the vehicles and factories as well
(Kasemsap, 2016). In this context with the arrival of electric cars the market of batteries and
copper gets also increase with the uses of electric cars.
Moreover within the electric cars automotive industry always try to use lightweight tyres
that are more sustainable and barrier free and because of this the tube and heavy tyre market get
impacted. Along with this within the manufacturing of fuel and engine oil cars heavy steel is
used in order to make them more reluctant and sustainable for the longer period of time with the
market. Therefore in this context there are two prominent strategies that are impacted because of
the arrival of electric cars that is the engine oil industry and steel industry (Gandhi, 2017).
Moreover by considering the upcoming vehicle market and trends electric and hybrid cars will
become the trendiest as in modern world most of the people are environment friendly and also
want to use the product which does not harm the conditions of environment.
CONCLUSION
Therefore from the preceding information it is analysed that Global Business Environment is
a term which include various factors visit in order to identify and analyse the condition of
company. In this context the environmental analysis is conducted which is useful in analysing to
various business forces and risk factor that can become that for the company. Along with this the
critical assessment of company is also done by analysing the prominent changes that arises in the
future after the arrival of electric cars.

REFERENCES
Books and Journals
Doh, J.P., Luthans, F. and Slocum, J., 2016. The world of global business 1965–2015:
Perspectives on the 50th anniversary issue of the Journal of World Business: Introduction
to the special issue.
Gandhi, L., 2017. Human resource challenges in VUCA and SMAC business
environment. ASBM Journal of Management. 10(1). p.1.
Gooris, J. and Peeters, C., 2016. Fragmenting global business processes: A protection for
proprietary information. Journal of International Business Studies. 47(5). pp.535-562.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kasemsap, K., 2016. Fostering supply chain management in global business. In Handbook of
research on global supply chain management (pp. 45-71). IGI Global.
Kasemsap, K., 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Keivanpour, S., Ait Kadi, D. and Mascle, C., 2017. End-of-life aircraft treatment in the context
of sustainable development, lean management, and global business. International Journal
of Sustainable Transportation. 11(5). pp.357-380.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Lee, I. ed., 2017. The Internet of Things in the Modern Business Environment. IGI Global.
Pikhart, M., 2017. Managerial communication and its changes in the global intercultural business
world. In SHS Web of Conferences (Vol. 37, p. 01013). EDP Sciences.