Analysis of Global Business Environment Assignment

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GLOBAL BUSINESSENVIRONMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1a) PESTEL analysis of global auto mobile industry...................................................................1b) Porter's five forces of Global Auto-mobile industry...............................................................4CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
INTRODUCTIONGlobal business environment refers to economic activity which take pace through theworld by participating or expanding market in different countries. Automotive industry consistsof a process of manufacturing, designing, developing, selling, marketing of motor vehicles by awide range of companies an industry in world. Automotive industries began in 1860. This essayrefers to a case study of car production surges in eastern Europe. This case study is about shiftingof automotive industry from western to eastern European countries. Peugeot is a Frenchmanufacturing industry of auto-mobiles. It shifts a plant from Ryton to Slovakia. AnotherPorsche is a German manufacturing industry which makes body in Slovakia but do finishing inGermany to save cost. This essay will analyse the influences of shifting automotive industryfrom west to east on society and people of both eastern and western European countries. Moneyis spent like a flow of flood for building manufacturing plant in eastern European countries. Thisessay will include a pestle analysis to analyse environmental factor which affects global businessenvironment and also outlines porter's five forces for analysis competitive market which affectsautomotive industries in eastern European countries.TASKa) PESTEL analysis of global auto mobile industryAutomotive industry refers to a group of companies which are responsible formanufacturing, designing, developing, selling, marketing of motor vehicles. It is listed in top ofeconomy sectors in terms of revenue (Pavlínek, 2017). Automotive industry do not include therepairing and maintenance of vehicles from delivering from one user to another user. This essayfollows a case study of car production surges in eastern Europe. In this, auto mobile market ofEurope is shifting from west to east. It results in a flow like a flood where even local car makersare in list of building their own factories in different countries like Poland, Slovakia, Hungary,Romania and the Czech Republic. Let's see the pestle analysis to evaluate the environmentalfactors which influence car production surges. Pestle analysis stands for political, economic,social, technological, legal and environmental factors.Political factorsFor starting an automotive industry in country, it needs to take a support from politicalleaders and officers of government. It makes the accessing process easier and consumes lesstime. Like at the inauguration time of auto mobile factory in Slovakia, prime minister and1
officers of government attended the event. In 1989, political government started communism dueto which many local car makers rushed to eastern Europe countries like Poland, Romania,Hungary, Slovakia. Money was in flow mode for building manufacturing factory of car. Itresults in shifting of automotive industry from western Europe to eastern Europe. It is like anexpanding global market from one country to another country. Challenges are faced bycompanies like Ford, Toyota, Suzuki, Volkswagen, Audi for accessing more market and winningthe competition (Fagerberg, Laestadius and Martin, 2016).Economic factorsAutomotive industry is highly responsible for economic growth of country by emergingmore and more revenue. When a country is facing financial crisis then it can be overcomesthrough by good selling of motor vehicles by automotive industry. Czech Republic double itsproduction cost by selling more than a million cars by 2010 (Dale and Fabry, , 2018). It is alsoexpected that Russian production is raised from 1.2 million to 1.6 million cars. United states toincrease production by 9% and Japan to increase its production by 2%. Britain is on decreasingfactor from 1.8 million to 1.5 million in 2005. By investment in central and eastern Europe byAsian countries and united states, exceeds 2.4 million vehicles. In 2005, It results in listed in top20 auto-mobile production nations. Eastern Europe do not included only manufacturing of smallcars in, it also includes an assembling of Touareg S.U.V. and Q7 of Audia in Slovakia. Increasein prices of gas also influence customer preference and get shifted from big cars to compact carsin eastern Europe (Paik, Kwon and Chen, 2017).Social factorsAutomotive industry impacts on society by offering employment opportunities to people.It also sometimes results in unemployment. Like, when Volkswagen stop manufacturing cars inBelgium, it results in loss of 4,000 jobs. There is also a case when Peugeot opened a plant inTranava, it eliminates 11000 jobs in western Europe because of stopping a plant in Ryton. Due toshifting auto-mobile industry in Europe, only in Slovakia, engineers earn half of the westernEurope engineers earn. Eastern European countries aims to increase number of jobs by 284,507in 2004. It was 235,826 jobs five years earlier. At the same time, job falls down from 1,978,338to 1,991,848. This influences life of people in society of western Europe due to unemployment.Also, trained engineers are needed by automotive industry due to which education level is risingand society are in a condition to launder money. But it is analysed that unemployment is changed2
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