Global Business Environment INTRODUCTION

1 b) assessment of the environment of global auto mobile industry using the porter's five forces model analysis, 5 CONCLUSION 7 REFERENCES 8 INTRODUCTION Global business environment including different countries with factors exogenous to hom environment of the organisation which influence the decision making on use of resources and the capabilities. Some factors which affect the complete industry of auto mobile are: Political factors- The political factors play a crucial role in and have a direct impact on the business and industry as government made policies

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
a) Assessment of the environment of global Auto mobile industry using PESTLE analysis.....1
b) assessment of the environment of global auto mobile industry using the porter's five forces
model analysis,............................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Global business environment including different countries with factors exogenous to hom
environment of the organisation which influence the decision making on use of resources and the
capabilities.
The report is about the East European companies which have the capability of surging the
car production by using and adapting the different strategies and business models.
The global environment in which companies exist is affected by the different factors which will
be explained in the report. PESTLE analysis the model which is used to analyse the different
factors present in the environment which directly affects the business organization. Political,
social, legal, technological and environmental factors are some factors which have direct impact
on the business. Furthermore, the report will also include the porters 5 forces model which will
explain the impact of supplier, buyers and competitors in the organisation.
a) Assessment of the environment of global Auto mobile industry using PESTLE analysis.
Global automotive industry is comprises many factors which exists in the environment.
All the factors are need to be understand and evaluate effectively so that their impact on the
industry, market, companies, and customers can be judged and decision regarding the
sustainability and future development can be taken. The car production suddenly surges in the
eastern Europe. some factors which affect the complete industry of auto mobile are:
Political factors-
The political factors play a crucial role in and have a direct impact on the business and
industry as government made policies and changes are compulsory to follow by the companies as
the authorities hold a great position. Government are favouring low missions vehicles, charging
higher taxes on luxurious vehicles(Adekola and Sergi, 2016). some markets including Europe
and UK are providing government subsidy for low emission vehicles. Government rules are
passed on the technologies which are fuel efficient and low emissions.
Positive impact
As eastern Europe also using the technologies which are highly fuel efficient which are
passed by the government rules resulting I low disruptions and smooth flow of operations of the
cars which also contribution towards the surge of car production in that particular area.
Government regulations, taxes, import and export rules, changing government regimes all these
factors can cause favourable or unfavourable fluctuation in the complete market of the auto
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mobiles. Companies are required to maintain their costs and political factors as they have the
significant role in the area(Eskandari and et.al., 2015). The laws related to imports and exports
also affect the auto makers to be productive in their operations. Increasing gas prices in the west
have encouraged the customers to start shifting from the big cars to the kind of the compact cars
and are the speciality of the Eastern Europe.. Which also contributed in surging the car
production in eastern Europe and helps companies to capture larger customer segment and
market share and have opportunity to create a strong brand value.
Negative impact
Political factors have e negative impact too. The government highly strict and stiff
policies, regulations, higher taxes. High duty, rule etc. creates the most and bigger disruptions in
the production and operational function of the organisation due to which the companies and their
products and service equality suffers which leads to reduction in capturing the good markets
share and decreasing sales will lead to non achievement of their organisation goal.
Economic factors
In the automotive industry economic factors also plays important role as the directly
affect the operation s of the organisation and on revenue earnings of the organisation as in the
time of good economic condition sales of the company leads to increases and in bad economic
time the sales tends to decrease. Even in bad economic condition or even the demand of higher
and luxurious vehicle also get heavily affected(Gary and Heiko, 2015). In good economic
conditions sale of the vehicles remain high in the developed countries as the purchasing power of
the customers are high. Whereas low in underdeveloped and developing countries. Thus, the
economic size and economic conditions directly affects the profitability of the automotive
industry and its companies as industry is completely depended on the purchasing power of the
customers. The growth rate, inflation rate, foreign exchange rate and many other factors are
considered to e part of the economic factors.
Positive factors
Government has been granting the concessions like reduced interest rates for export
financing which helps the companies to arrange finance at low rates for continuing their
operations..the high growth rates for developing market also leads to development of the
country's economic conditions their sales increase which leads to higher profit margin of the
organisation as well as contribution towards the gross domestic product of the country also
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increase which is the great opportunity for auto makers and automotive industry. East European
governments offers various incentives for importing the finances which leads to corporate profits
by paying low taxes and the new investment leads to regions production expected to be making
the 3.59 million cars in the same year(Hamilton and Webster, 2018). Another positive impact of
economic factors is also the economic stability of major markets which doses not leads to
disruptions in the companies and hence smooth flow of business and operations continue to
operate and leading in effective end efficient delivery of the products and services.
Negative factors
Rising competition in the developing market is the negative impact on the companies of
the automotive industry. Industries are depending heavily in the customers purchasing power and
they are directly affected by the income level. Eastern Europe is not aiming all cheap cars they
are focusing on assembling the S.U.V. And the big Q7 which are generally not affordable by the
customers which leads in reduction of the sale and lower market share.
Social factors
This factors is considerer wit the lifestyle, culture of the pope. It is the duty of every
business to fulfil all the requirements and needs of the customers as the are also the part of the
society itself. This mostly includes the culture and demographics at global level. Changes in the
buying pattern in the automotive industry also happen just because of the customers' problem
due to the recessions in different markets of demographics also affect the customers' preference
to b buy the cars as if there are large families than they will prefer to buy more spacious and safe
cares which suits the family(Kasemsap, 2016). There are also the customers which are more into
the sporty luxurious and stylish cars as they feel highly comfortable and royal feel in those cars.
Positive impact
The favourable tastes of the customers to the product will benefit the companies as
customers wants to buy the particular product as they see in the capability of satisfying the needs
and wants in that product which is positive effect on the organisation as there sales leads to
increase and hence can capture the larger share of the market and can create a strong brand value.
Generation of employment opportunities also a contribution of the company towards the society.
Negative impact
Unfavourable changes may distract the customers from the companies' product and
customer may not like the goods and services according to their requirements which leads to fall
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in the demand and sales and the company is not able to retain the customers for long run. The
company needs to add the features which are required and demanded by the customers in that
particular product.
Technological factors
These are the factors which related to the technology efficient that is the company using
high and advanced technology are retaining more customers compared to the companies who are
using less deficiency and old technology(Khilji, Tarique, and Schuler, 2015). Fuel efficient
technologies are encouraged more by the government in Eastern Europe
Positive impact
Europe is a price market as they using fuel efficient technologies at affordable prices that
is consumers buy the cars based on the low process as they re also affordable and holding the
capability of satisfying the needs and wants of the customers. With effective and efficient
research and development eastern Europe is expects to go double its sales within next three years
and for expanding the dealers network in region by 80 to 480 and it is according tote auto votive
news of Europe.
Negative factors
With the entry of developed companies with expansion of the global market the
companies enter into the development and evolution of alternate fuel efficient technologies,
hybrid cars also have made into the market which narrows down the scope of the developing
countries as larger share is captured only by the developed countries itself.
Environmental factors
These factors include the physical infrastructure like bridges, roads which affect the use of the
auto mobiles(Lewis and et.al., 2017). It also includes the factors which affect the external
environment in which organization and society exists.
Positive factors
If they environment is pleasant that it Wil leads to more use of the auto mobiles.
Technological solutions also helps in integrating the supply chain which reduces the losses and
hence leads to increasing profitability. Any technology which is not affecting the environment
will encourage by the government as wells s the organization which leads ton better and effective
results of the productivity which is offered to the customers and also it would be safe foe them to
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us the products. Also, it encourages the development of environment friendly car whose demand
will increase in near future
Negative factors
The automotive sectors have a major contribution in damaging the environment as it
crates pollution Which affects the environment in a negative way.
Government and organisation must take necessary steps to avoid this problem and take actions
which are requited to make for the protection of the environment.
Legal factors
Are those factors which are concerned with the law. The rules and regulations which are
need to follow by the Automobile industry in order to achieve the legal objectives and avoid
disruptions,.
Positive impact
Legal issues also imposes on the quality standard which are required to achieve by the
organisation in order to achieve the objective and fulfil the legal requirements
Negative factors
Strict regulation and rules leads to disrupt the organisation which make them difficult to
operate smoothly and effectively which is considered to be the great barrier in operational
management and business(Salvatore, 2015). Auto mobile industry greatly affected by the rules
and regulations as they restrict them in performing some of their crucial activities.
b) assessment of the environment of global auto mobile industry using the porter's five forces
model analysis,
There are some forces which can be analysed fort the assessment of the global
environment of automotive industry .the model represents the threats and opportunities faced by
the companies of the Eastern Europe . The companies of global automotive industry always
focus on forces which are explained below:-
The threat of new entrants
It is difficult for the companies to enter into the automotive industry as these companies
require a huge investment for the production of auto mobiles. In addition, this being equally
competitive with existing firms is also required by the company to successfully established in
long run .the new companies are required high skilled knowledge, good distribution network and
a unique feature through which they can be able to win over their competitors.
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The new brand has to make ensure that their product must hold something innovative and
creative feature which make them different from the competitors brand and leads the company to
be successful in the industry.
Brand image is basically the great competitive advantage for the existing brands.
Penetrating the new market is also a difficult task(Shankar, 2017). The government of the Europe
has applied high import taxes to discourage the foreign brands and also the other factors which
minimize the threat from the new players in the Eastern Europe through which existing company
is able to make their market share and resulting in creating a strong brand value.
Bargaining power of suppliers:
The bargaining power ion the automotive industry is generally weak foe most of the
companies which are small players .some companies are significant in et size. The suppliers have
to play and bargain according to the rules set by the brands. any brand which hold string value as
raw materials is also available to them, ans switching one supplier from another is not much
difficult task foe them. Supplier of the parts, tires, components, electronic items are also different
size. Some suppliers rely on the auto makers and having contracts with less auto makers than it
will be difficult to bargain with them.
Bargaining power of buyers
This forces represent the bargaining power of buyers that is how customers are capable of
negotiating with the companies. The powerful and the high quality offered by the company than
buyers will not be able to bargain with them(Sinha, 2018). Buyers are in the position of
bargaining for the low prices. Any small or large buyer they have complete right to shift to new
brand if e they are not favourable with the existing brand, the buyers are generally priced
sensitive and that is the reason they shift to other brand if they found it more costly than others.
Bargaining power of the buyers in east Europe is generally high which make required for the
organisation to involve something innovation band creative in their products and service which
helps the in attracting the customers and retaining the customers' foe long. The companies in east
Europe adding unique feature in their product which leads to bargain less with the buyers and
hence resulting in generating the higher profits.
Threat of substitutes
the company operating in the East Europe are performing their activities of producing the
quality goods and services effectively which helot them in capturing great share of the market.
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Any new company or existing company by using the advanced technology bring the product
with additional feature might bring threat of substituting the product of existing firm which is the
threat for the companies(Kasemsap, 2016). Customers generally substitute the product if they
found it less useful or very expensive than they prefer to substitute the product from another. For
reattaining the customers for long . East Europe companies are required to maintain the quality
standards and they need to charge the affordable prices and they are following the same by using
advanced technology and providing to customers are affordable prices which is also the reason
for this surge of car production in the East Europe.
competitive rivalry in the industry
All the major nations producing the cars experienced the intensive rivalry . The level of
the customer loyalty is high whereas the industry is large. Different market targeted the different
segment. All the companies working in the same industry follows different strategies and models
which means they all doest perform equally(Gary and Heiko, 2015). Automotive firms of the
East Europe are aggressive against each other in terms of the factors like in innovation and
marketing firms compete with each other in different terms related to the costs, electronics, fuel
efficient technology innovation, style, brand image, pricking, and many other variables.
Companies must have the comprehensive strategies which address the strong forces of the
competitive rivalry,
CONCLUSION
From the above report it can be concluded that the East European companies of
automotive industry have surges the production of the car due to favourable impact of the
environment of the global automotive industry. The companies favourable and unfavourable
impacts can be measured and evaluated by suing the PESTLE analysis and porters 5 forces
model. Furthermore, it also concludes that porters 5 forces model also help in evaluating the
impact on organisation because of the competitors, supplier and buyers.
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