PESTLE and Porter's 5 Forces - Electric Vehicle in Europe

This study explores the emerging and new business opportunities in the marketing and production of electric cars in Europe. It analyzes the impact of PESTLE factors and Porter's 5 Forces on the industry. The report also discusses the different stages of the product life cycle and the value chain analysis. Additionally, it examines other businesses linked to the international automotive industry.

PESTLE AND PORTER@S 5
FORCES-ELECTRIC VECHICLE IN
EUROPE

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Emerging and new business opportunities that marketing and production of electric cars may
used..............................................................................................................................................2
Other businesses linked to international automotive industry.....................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Automotive industry comprises a large range of firms and companies included in
development, selling, designing, producing and marketing of motor vehicles. This sector is
known as one of the world's biggest economic industries by revenue. With skilled and talented
applicants automotive sector design and sell the best vehicles to its consumers. The current study
is based on Electric vehicles in Europe, selling by Volvo Cars known as premium car maker.
This study explains new & emerging business opportunities that marketing as well as production
of electric cars may present to business executives and entrepreneurs. Furthermore, this report
justified other businesses currently connected to global automotive sector that it may be not be
profitable in long run to invest in.
MAIN BODY
Emerging and new business opportunities that marketing and production of electric cars may
used
In order to determine the emerging and new opportunities that may be marketing &
production of electric cars present to business executive and entrepreneurs, PESTLE, Porter’s
Five forces, Product life cycle and Porter’s Value chain.
PESTLE Analysis-
Political factor-
This factor consists of present and future support for electric vehicles and funding
initiatives. Government rolled out a new tax policy to encourage Electric mobility adoption, a
clear strategic way provide the best opportunity to electric vehicle manufacturer as they can sell
and design cars for consumers all around the world with low tax pay (Lopez-Behar and et.al.,
2019).
Economic factor-
It related to overall economic condition in automotive market, sales of electric vehicles
are rapidly increasing as it give chance to marketing and production department which they can

present to business executives for producing more cars and also affect selling of electric cars
present to entrepreneurs (Bakhshinejad, Tavakoli and Moghadam, 2020). It helps them to grow
and succeed within marketplace.
Social factor-
In recent time, consumers prefer to buy or purchase electric vehicles with comfortable
seating and advanced features that can be used while driving cars (Lordkipanidze, 2019). The
growing demand for electrified cars is considered as new or emergency business chances that
marketing and production of electric cars may present to business executives and businessman
which they can use to gain attention of potential clients.
Technology factor-
Technology advancement is one of the best emerging opportunities, electric cars
marketing and production department gain to present business executives that helps to produce
latest design cars for consumers (Goodman, Korsunova and Halme, 2017). By using the latest
technologies in electrified cars and advertising in market place production and marketing
department of vehicles offer best products to entrepreneurs that give them better driving
experience.
Legal factor-
Electric vehicles can take benefit or advantage of white paper roadmap towards a
individual EU transport area (Hatzopoulos, 2018). It states that conventional cars can be reduced
to their half by 2030 as compared to 90s standards. It is the best opportunity to production and
marketing to present with effective outcomes to business executives.
Environmental factor-
Government and consumers concern towards environmental sustainability is included in
this factor that impact on production and marketing of electrified vehicles positively as they can
present less noise & air pollution cars to business executives with smoother ride which person
can enjoy for longer while using it.
Porter’s 5 forces-

Bargaining power of suppliers-
The degree of this force is high because electric care manufactures and companies like
Volvo highly dependent on suppliers and collect or sell electronic parts through them. In
automotive industry there are few suppliers who are able to serve its best services or offer
products to companies that help to design the best electrified cars for wide number of customers.
It put pressure on firms to change pricing as well as selling structure.
Bargaining power of buyers-
Consumers have strong bargaining power as they are able to switch from one product to
another after considering its quality instead of looks. High bargaining power of clients put
negative impact on production and marketing of electric vehicles such as Volvo. As firm can
face new challenge to reduce carbon foot print in its cars and also gives chance to design EV that
increase profit.
Threat of new entrance-
Degree of this force is low because structure wafer fabs and buying devices is highly
expensive. It is quite difficult for new firms to enter into automotive sector and gain consumers
attention. For example, 30,000 devices a month funding needs can range from 500 million to 2.6
billion depending on part and size of units or parts. The production required to be in latest
modern technologies which in return produce new electric cars that are much expensive.
Threat of substitute products or services-
The threat of substitute items and services is high because there are many options
available in market consumers can choose to utilize. For example, instead of electric vehicles
customers can travel from train, air plane and bus that give more comfortable services rather than
electric cars and person can reach at desired location without travelling for longer period. After
analyzing this force it can be said that electric cars production posses a big threat as a substitute.
Competitive rivalry among exiting players-
Within auto motive sector exiting companies give tough competition to each other in
order to gain competitive advantages that help them to become a global or market leader in

Europe. Due intense competitive level, Volvo and other firms face issues as they feel more
pressure to beat their competitors by producing the best electronic vehicles for consumers
according to their needs.
Product life cycle-
PLC is the procedure an item goes through from when it is first launched into market
until it removed or declines from market. It consist with four phases, described below-
Introduction or development stage-
It is the period where a new item or good is fist develops and then introduced into target
market by Volvo electric vehicle manufacturer. It usually requires a lot of finances and
resources. As a outcomes many firms startups specially are developing a new approach to
product development known as lean approach. It is typically associated with slower progress
because consumers are not familiar with electronic cars, sellers may not be effectively trained to
sell, definite and clear distribution channels are yet to be build.
Growth phase-
After developing and introducing products in market place in front of those people who
seek to purchase electric cars since for so long because it saves power and good for environment.
Growth is the second phase of product life cycle it being when electric cars start to sell at a much
faster rate. People are becoming highly aware of it and word of mouth is beginning to spread all
over the world. Electrified cars features and benefits will be recognized and first phase has
matured. It is profitable in context of company when demand for products starts to sustain for
longer, regardless of whether marketing department promote or advertise it.
Maturity stage-
After passing above two stages of product life cycle, it time to take next step towards
third phase that is maturity. It is when goods sales being too high, demand is strong and electric
cars is booking out. It can be begin to compete with new alternatives being launched into same
market. It helps to increase profit margin of electric cars producer or manufacturer companies
and also contribute to increase their productivity level rather than before.

Decline stage-
This stage refers to period when goods reach their saturation point and in this case price
can begin increasing though number of sales will decline. At this time effective decision is
require, whereas to continue with goods with important modifications or to move onto another
item altogether. When the price start increases it outcomes in decrease in sales because
consumers prefer to purchase products with consider price.
Porter value chain analysis-
Primary activities-
Inbound logistics-
Electronic care manufacturer mainly focus on every aspects of transformation from parts
or materials to finished products. Production management collects all the important things and
then distributes to begin procedure in effective manner.
Operations-
It includes service and production operations that increase the profit margin of companies
such as Volvo and their productivity level. Operational activities are really very essential for
improving productivity and increase efficiency of production functions. Within firm
management test product before launch.
Outbound Logistics-
It is the procedure of the final products being moved out of producing units to retailers.
Many of auto makers have their own outlets and varied operate through franchises. After
producing electric cars management send finished product to warehouse.

Figure 1Porter's Five Force
(Source: Value Chain Analysis, 2018)
Marketing & sales-
Marketing is a very important part down value chain of vehicle manufacturing firms such
as Volvo. It includes distribution, consumer relationship management and sales force
administration. Marketing department and its team members conduct market analyze in order to
identify customer needs.
Service-
After selling vehicles company serve their support service to customers that help to retain
them with business for longer. Better client support of Volvo the better their brand image and
increase its number of retained people.
Secondary activities-
Firm infrastructure-

The firm infrastructure has a key role in growth and success of business; it includes
culture, finance, management and other resources. Organization effectively managed their
infrastructure and organizes each and every activity in effective manner.
Human resource management-
To enhance the productivity and motivational level of staff HRM work really very hard
and hire new applicants with appropriate skills & knowledge regarding producing electronic
cars. Human resource manager prepare plan for training and development of workers which in
return enhance current abilities.
Technology development-
While producing electronic cars manufacturer used latest technologies with focus on
consumer safety, emissions control and vehicle design that are influence by advanced technology
like ride convenience.
Procurement-
Along with above secondary activities procurement is also very important for companies
like Volvo. It includes procurement of raw materials from suppliers and then sells it to market
place. Managing this activity aids at saving costs and assuring good quality raw materials that
can be produce strong and efficient vehicles.
Other businesses linked to international automotive industry
There are varied businesses currently linked to global automotive sector that might be not
profitable in long run to invest in (Saidani and et.al., 2018). For example, automotive parts maker
firms are connected this sector, they are able to produce and then provide electronic cars
manufacturer like Volvo to produce for consumers. With skilled and talented workers they
produce part and supply to manufacturing companies who are capable to design new & latest
design cars from luxury to normal. Motor parts producers is constantly evolving to improve and
enhance efficiency as well as cater things that consumers want in intense competitive market,
which at period may be mean outdates plants are forced to close. Invest in this type of business is
not profitable for automotive industry in Europe as many firms manufacture their own parts and
produce electronic cars for people.

Automotive industry linked to second tier suppliers for manufacturing of just in time
element they supply cars tier to companies. It may be profitable for automotive industry to invest
in this business as demand for electronic cars increases more and more.
Along with above businesses, marketing is another venture linked to global automotive
sector (Neugebauer and et.al., 2017). Investment in this venture is not profitable because without
using marketing business activities, companies can advertise their products by hiring and
developing effective marketing team. International automotive sector do not invest in this
business as they require a lot of efforts and consistently changed according to consumer’s
preferences.
CONCLUSION
From above analysis it has been concluded that production and marketing of electric cars
or vehicles present effective products to business executives & entrepreneurs. They gain
emerging and new business opportunities which are quite beneficial for business growth and
success. By gaining chances automotive makers gain competitive advantages and become market
leader. It has been summarized that automotive part makers and marketing business is not
profitable for global automotive industry in which they decide to invest. By manufacturing
electronic cars for consumers Volvo and other firms satisfied people and retail them for longer
period.

REFERENCES
Book and Journals
Bakhshinejad, A., Tavakoli, A. and Moghadam, M.M., 2020. Modeling and simultaneous
management of electric vehicle penetration and demand response to improve distribution
network performance.
Goodman, J., Korsunova, A. and Halme, M., 2017. Our collaborative future: Activities and roles
of stakeholders in sustainability‐oriented innovation. Business Strategy and the
Environment. 26(6). pp.731-753.
Hatzopoulos, V., 2018. The collaborative economy and EU law. Bloomsbury Publishing.
Kessler, T. and Buck, C., 2017. How digitization affects mobility and the business models of
automotive OEMs. In Phantom Ex Machina (pp. 107-118). Springer, Cham.
Lopez-Behar, D and et.al., 2019. Charging infrastructure for electric vehicles in Multi-Unit
Residential Buildings: Mapping feedbacks and policy recommendations. Energy policy.
126. pp.444-451.
Lordkipanidze, R., 2019. Ways to Develop of Competitive Production of Electronic Machines
and Technologies (Example of Fantastic New Georgian University Geomedi). Tbilisi,
General Coordinator of International Charity Scientific-Research Partnership, As E-
Book, 10.
Neugebauer, S and et.al., 2017. Calculation of Fair wage potentials along products' life cycle–
Introduction of a new midpoint impact category for social life cycle assessment. Journal
of cleaner production. 143. pp.1221-1232.
Pavlínek, P., 2017. Dependent growth: Foreign investment and the development of the
automotive industry in east-central Europe. Springer.
Saidani, M and et.al., 2018. Heavy vehicles on the road towards the circular economy: Analysis
and comparison with the automotive industry. Resources, Conservation and
Recycling. 135. pp.108-122.
Online
21 million more electric vehicles expected worldwide by 2030. 2019. [Online]. Available
through: <https://www2.deloitte.com/uk/en/pages/press-releases/articles/21-million-
more-electric-vehicles-expected-worldwide-by-2030.html>
Value chain analysis. 2018. [Online]. Available through :< https://www.essay48.com/value-
chain-analysis/13931-Volvo-Value-Chain-Analysis>