Global Business Environment Assignment | Volvo

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
A) Forces that shaping cars industries and changes that helps to get competitive advantages. .....1
Porter's five forces ......................................................................................................................1
Critical assessment of changes in the organisation. ....................................................................3
B) Opportunities for electronic car manufacturing businesses .......................................................4
Opportunities for production of electronic cars ..........................................................................4
Future investment is not profitable..............................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Global business environment deals with the environment in which company is operating
its business activities. Global environment deals with political, economic, technology,
geographic location, culture, etc(Aguinaldo and et.al., 2019). Volvo is car manufacturing
company which expand its business in the fields of electric vehicle manufacturing. The company
has many branches in different countries. The report is based on the car manufacturing industries
as the case study is based on the evaluation of electronic vehicles in Europe. The discussion will
be based on the forces that are driving car manufacturing industry to shape the business. Further
the study will be based on the competitive advantages that car manufacturing industries will get
in future. Further the discussion will be based on opportunities that are available with the
industry. Last but not least the discussion will be on identifying and critically assessment of
global automotive industries are profitable to invest on.
TASK 1
A) Forces that shaping cars industries and changes that helps to get
competitive advantages.
The majors forces that shaped the business environment for car manufacturing industry
are explained with the help of porter's five forces. It explains by using major driving forces in
car manufacturing industries that are competition in industry, entry of new company in the
market, suppliers, customers and threat from substitute products(Arroyo, 2019).
Volvo company tries to bring innovation in the fields of manufacturing electric cars
which help to company to gain long term profits. The changes that company faces to deal; with
the dynamic environment for manufacturing of electric car are
Porter's five forces
Barriers For New Company To Enter In Market
In car manufacturing industry electric vehicles can not enter the market easily because it
is difficult for company to invest in auto mobile industry as it requires huge amount of funds at
the initial stage of the establishment of the company (Bocken, Boons and Baldassarre, 2019).
Another factor is that the industry requires highly skilled labours to operate the activities related
to manufacturing. The company in industry needed to enter by creating strong network of
distribution to the end consumers. To enter in car manufacturing industry the company can
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establish its position with by bringing differentiated and innovative product in the market. The
company faces challenges related brand image and its reputation in the market. As in car
manufacturing industry brand image creates huge competitive advantages for the existing brands.
As when new company brings its product it need to focus more on engineering and quality of
product. As in car industry the Volvo company can easily get raw material but achieving large
economies of scale is difficult task for small companies. And some government impose heavy
duty for foreign brands.
Suppliers: Car manufacturing industry faces challenges towards the suppliers. As the number of
suppliers in auto-mobile industry are less, some of them are present significant size. From last
few years the suppliers are providing products which are helps the company to make innovative
product. Suppliers for manufacturing of electric vehicle parts are less. In car manufacturing
industry the supplier plays key role for the brands as they provide the quality to the product of
the company(Godfrey and Siraje, 2019). The bargaining power of the suppliers had also been
changed as before the suppliers bargaining power was less but now it has been increased from
last few years.
Buyer: From last few years the changes that has been observed in car manufacturing industry are
that the buyer for cars have been increased. Mostly the buyer in the industry are largely from
small individual buyers who buys single vehicles. Before few years the buyer were only
government and corporation that buy to fleet of vehicles. As such buyer influence to buy the
product at lower price for resale of cars. The buyer easily switch to other brands or alternative
option for mode of transportation. As buyer shows more prices sensitivity towards buying of the
car. As the brands able to create the customer loyalty towards quality, design, competitive price
offered by the company(Hale, 2019).
Substitute Products: In car manufacturing industry the substitution of product are weak as
there are lot more other options rather then cars it can taxi, trains, buses and planes. In case of
alternative modes for transportation the individual need not have to take care for the
maintenance. From last few years owing car was the matter of prestige and convenience.
Changes can be seen as that today the owing expensive and branded car are the matter of prestige
for individuals. Some people still thinks that train and buses are more cheaper and easier way for
convenience.
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Competition: From few years the competition in the car manufacturing industry has been
increased as the rival companies are providing the product with lot more innovation and creative
design in the market. In car manufacturing industry the number of brands and influential are low
but as the company can easily exit the market. The company which exists market bears huge
losses as compared to other industries in the market. The company which enters in car
manufacturing industry are matures and creates high scale of loyalty towards the customers. Car
manufacturing company earns intensified profit in the from rivals in industry. The industry
targets to different segment in the market with different brands yet earns huge profit. The
competition in the industry is based on the price differentiation from rivals, quality, design, use
of innovative technology, customer safety, etc. All these forces make the company competitive
from rivals in the car manufacturing industries(Godfrey and Siraje, 2019).
From last few years car industry has been changed with the dynamic environment as in
car industry the competition has become higher, the supplier are able to provide the innovative
products, buyers are influenced towards purchasing of car as it had become the matter of prestige
for individuals. New company faces lots of challenges to enter in car manufacturing industry.
Critical assessment of changes in the organisation.
Volvo company has to dealt with many change from last few years that are the company
is manufacturing electric vehicles rather then petrol consumption vehicles. As the reason is that
company due to scarcity of petrol in future and increasing prices of petrol influenced company to
manufacture electric vehicle. As the electronic vehicles will be cheaper for the consumes. As the
owner of the electronic vehicle will have the advantages to run the vehicle cheaply. The
maintenance cost of the vehicles are also very low(Lee and et.al.,, 2019). The company will able
to increases its brand image as the manufacturing of electronic vehicle will cause less harm to
environment. In future the company will able to manufacture car by using less resources the
revenue of the company will easily get raised due to the manufacturing of electronic vehicle. The
company will able to show its significant concern towards the conservation of energy. As petrol
consumption cars produces more pollution which are harmful for the environment as well as
human beings. With the use of electronic car the company will decreases harm to environment
and less effects to health benefits to humans.
With the help of production of electronic car in future the company will able to increases
its competitive advantages. As the electronic car gives benefits consumer as well as the owners
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of the company. Manufacturing of electronic car will increases the brand value of the company
and lead the society towards increasing the standard of living of the people. In future their will be
less dependency on the petrol as the production of electronic cars will replace petrol
consumption cars. In future petrol will be more costlier due to it scarcity as it is natural
resources(Murray and Boron, 2019).
B) Opportunities for electronic car manufacturing businesses
Opportunities for production of electronic cars
The production and selling of electronic cars had created diverse business for establishing
new business and created opportunities for marketing and productions of electronica cars by
entrepreneurs. As production of electronic vehicle it captures lager section in automotive market.
The electronic vehicle creates such business opportunities for many entrepreneurs in this
growing field.
Electric car serving garage: The electric vehicles are different from engine car as it requires
inverter repairs, motor repairs,etc. As all these would be part of serving garage. Production of
electronic cars will create the business opportunity for generation of services that can be
provided to the owner of the electronic car holders.
Electric charging points: In production of electronic vehicle different charging points are
required. As it creates business opportunities for developing and installation of charging stations
at different points. The business has even the opportunity for creating own private charging
portals(Nordstrom, 2019). The business opportunity will be created by the electronic vehicle
selling business as it will create the demand for installation of different charging stations for the
at different charging points. The station will also require the skilled employees to handle
different charging point.
Electric battery shops: Battery is an significant part of electronic vehicle it is required to
change within 5 to 10 years. By opening battery shop it creates the opportunity for the for
increasing the business sales for electronic vehicle batteries.
Spare parts manufacturing: when production of electronic vehicle will be done in
manufacturing of electronic vehicle company will needed the requirement of spare parts. The
business opportunity will be generated for manufacturing of the spare parts of the electronic
vehicles. The business opportunity will also be created when the manufacturer starts to sale the
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parts outside the country or can import it from other country(van Wijnen, Ragas and Kroeze,
2019) .
Online selling reselling: The production of electronic cars creates the business opportunity to
sale the car online through different online car selling stores. As online car selling requires huge
amount of digital marketing or social media platform which will help the company to attract
huge pool of customers towards the company. Selling through online will reduce the gape
between the customers and the business owner who resale the cars. As it will create the
opportunity for the business to enlarge its customers base for electronic vehicle reselling. Online
selling of the car plays significant role in selling of car. As it will create knowledge among the
customers about the cars(Withisuphakorn and et.al.,2019).
Franchising or reselling: The business opportunity will be created by production of
manufacturing of electronic vehicle when the company starts reselling or franchise electronic
vehicles. As the business will creates the opportunities in future for reselling vehicle world
wide. When the company will start reselling world wide it will create the build strong network
for distribution of electronic vehicle. When the franchiser will increases the customers will also
accept the new trend and innovative technology in their lives. This will build strong customers
base and the comfort will be increases in the lives of people which will increase the standard of
the people(Murray and Boron, 2019).
Future investment is not profitable
Vehicle charging infrastructure is mostly required at the every place because have
various charging vehicles. Charger provides a DC charging voltage from an AC source whether
from the conman sockets outlet or more recently from the various purpose to build DC charging
station. Charges for the electric bikes are usually at low cost and also to separate units. It has
effective features which are highly helpful for the business. Those charging station is help to
people who have electric bike. For example: person is go outside but in the middle it stop and
battery is discharge then it will be helpful. Other hand, it not runs towards long time because of
technology advancement(Aguinaldo and et.al., 2019). Present day's technology is best, great and
advance. Companies are used high power battery which is support to vehicle long time. That is
highly effective and best for the people but it not for battery station, because technology
advancement. Most of the researcher and auto mobile companies are research towards to lunched
high power battery with timing sever. This types of battery are support to vehicle for long time.
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With the help of this vehicle is not stop in between the ride and market. By this, battery stations
are failed or not survive in the future for long time. So that, as per discussion high power vehicle
battery is better than from battery station.
Electric Car Rental Services would not be profitable in the long run as to invest in as
electric cars are limited to the dimension of distance as they are running on battery that could be
a failure as it is possible that battery fail after a specific time duration like average range is
approximately 100 miles. Electric cars are not suitable for long run as they don't have that much
acceleration power to put in as compared to the petrol and diesel cars because of the additional
accessories like batteries, chargers, air conditions, radios and battery drainage. The weight of the
electric cars become heavy as compared to the other cars as it consist of one single battery as
against motors, chargers and other controllers. The electric car become less efficient as the car is
entirely running on electricity. Electric cars are more costly as compared to the normal cars so it
is not necessary that every person can afford these technologies. Electric cars does not have the
capability to tow a RV. The electric car may however not run in long run the reason behind this
is that batteries makes vehicle heavy (Bocken, Boons and Baldassarre, 2019). A normal battery
pack may weigh up to 1,000 pounds which may put pressure on car and may affect the car to
move fast.
The electric vehicle and batteries however demand more energy which might however
create problem to cover long distances. These type of electric batteries may however became one
of the important reason for failure in this business. Electric car too cause pollution indirectly.
The toxic elements within batteries which can be spew toxic fumes creates a negative impact on
environment. Also it demand huge electricity as they are not generated by renewable energy
resource. Which means it may result in pollution.
CONCLUSION
From the above report it can be concluded that company Volvo company expands its
business on global bases to manufacture electronic vehicles. With the help of porter's five forces
on cars industry it was analysed that competition in the car industry is low as compared yo other
industries. In car manufacturing industry new company faces many barrier as it requires huge
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capital investment and needs strong distribution network. Further the report studied the facts that
electronic vehicle manufactured by the company can increases the demand for using electronic
vehicle across world wide. Further the business opportunities related to manufacturing of
electronic vehicle had been discussed. Last but not least the study was based on the future
investment electronic vehicle which explains that portable chargers are of no use as electronic
vehicle can get charged itself by installation of solar panel technology in cars.
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REFERENCES
Books and Journals
Aguinaldo, M.E.C., and et.al., 2019. Climate change perspectives and adaptation strategies of
business enterprises: a case study from Italy. International Journal of Sustainable
Development & World Ecology.26(2). pp.129-140.
Arroyo, V., 2019. Investing in America's Surface Transportation Infrastructure: The Need for a
Multi-Year Reauthorization Bill: Hearing Before the S. Comm. on Env't & Pub.
Works, 116th Cong., July 10, 2019.
Bocken, N., Boons, F. and Baldassarre, B., 2019. Sustainable business model experimentation by
understanding ecologies of business models. Journal of cleaner production.208.
pp.1498-1512.
Godfrey, B. and Siraje, K., 2019. Greening Business through Biodiversity and Ecosystem
Services.
Hale, R., 2019, May. Microplastics: A Global, Multi-Media Concern. In 2019 Emerging
Contaminants in the Environment Conference (ECEC19).
Lee, C., and et.al.,, 2019. Energy Efficiency for Supplier and Sustainability for Demand: A Case
of Heating Systems in South Korea. Sustainability.11(15). p.4216.
Murray, K.R. and Boron, S., 2019. The Necessary Paradigm Shift in Sustainable Business
Practice: Part 1: The Framework. J. Mgmt. & Sustainability.9 p.93.
Nordstrom, A., 2019. Social Impact Through Business: A Comparative Analysis of
Undergraduate Course Offerings and Perceptions of University Support.
van Wijnen, J., Ragas, A.M. and Kroeze, C., 2019. Modelling global river export of
microplastics to the marine environment: Sources and future trends. Science of the
Total Environment.673. pp.392-401.
Withisuphakorn, P., and et.al.,2019. Sustainable Development in Practice: Case Study of
L’Oréal. Journal of Business and Retail Management Research.13(Special).
Online
porter's five forces on auto mobile industry. 2016. [online]. Available
through<https://notesmatic.com/automotive-industry-five-forces-analysis/>.
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