Impact of Globalization and Sustainability on the Automotive Industry

This research explores the impact of globalization and sustainability on the automotive industry, including the positive and negative effects on organizations. It also discusses the PESTLE analysis of these issues and their influence on political, economic, social, technological, legal, and environmental factors. The study highlights the importance of considering these factors for the growth and success of automotive businesses.

REPORT

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
PART B...........................................................................................................................................1
INTRODUCTION...........................................................................................................................1
PESTLE Analysis of the above issues.........................................................................................3
Positive and Negative impact over organisations........................................................................4
Reflection.........................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

PART B
INTRODUCTION
Business environment refer to environment, entities are operating and is collection of
individual, groups entities and multiple other factors. All the factor are not within the control of
organisations but have influence over the business in terms of performance, growth and
profitability. Every industry operates in a diverse environment and they are affecting the
organisational activities influencing the entire business. Dynamics, complexity, uncertainty and
far reaching impact are the characteristics of business environment. This research is conducted
for knowing the business environment of automotive industry. This will give information and
understanding about the business environment and how it impacts the business. It will also
enrich with understanding of interrelationships among complex and general business
environment in which companies are operating. Understanding of business environment is
essential for carrying out business activities effectively without any interruptions. For constant
growth of the company is possible if business is able to play best in the environment. Study will
provide knowledge about market and it's impact over business.
Issues affecting Auto mobile Industry.
Over the current scenario demand for automobile products have increased to tremendous levels.
Almost all people are having one or two cars for their personal use where it was very low before
two decades. Despite of he enormous growth seen in auto-mobile industry there are factors that
are affecting the industry. It is essential for the companies of the industry to consider these
factors that can drive the industry down. Market forces and demands for the auto-mobiles are
highly influenced by these factors therefore industry have to respond to these factors for
maintaining their growth and to protect their market share. With the changing environment
companies are required to mould and change its strategies and policies in pace with the changes.
Seeing the current scenarios there are various factors that are affecting the industry but serious
issues are raised by globalisation and sustainability.
Globalisation
Globalisation refers to integrating the economy of one country to rest to economies of all the
countries. It helps in sharing of resources increasing trade and revenues for their business.
Globalisation has facilitated the expansion of industries over nations. Companies have grown
with enormous rate due to globalisation. This has helped companies as well as economies to
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grow in market. With the benefits of globalisation there are issues that are infuencing the factor
of the organisations. Due to globalisation market of local industries are highly affected they do
not as companies from abroad are able ton provide products at much cheaper rates than local
manufacturers. Globalisation has increased the competition and made products cheaper. Big
companies purchase raw materials in bulk that enable them to manufacture products at cheaper
rates. This has raised the competition to an intense level breaking the local markets and reducing
the profit margins and making the products cheaper. Companies are struggling over their profit
margins as raising the profit margins will affect their market share. Companies have to adopt
new technologies that is used globally by the market for remaining competitive in the market.
Companies that are not able to adopt to these changes will be thrown out of the market.
Globalisation has increased tariff rates that is causing the companies to raise the prices of
products over large scale.
Sustainability
Sustainability refers to growing industries without affecting the resources. Sustainability deals
with maintaining rate at which renewable resources are being harvested by companies and
continuous depletion of non renewable resources. Sustainability issues are raised to high levels
and also it is becoming serious concerns for the industry. Growth is highly influenced by this
issue as society has became aware of the environmental issues. To create at which environment
is being polluted by industries. Resources are being used by companies without recognising the
need of future generations. In current scenario consumers are striving towards companies that are
actively participating in the environmental concerns. Manufacturing engines that cause least
harm and pollution in the environment. Seeing the verge at which issue is raising the gloable
institutions and authorities are coming together for taking corrective measures for meeting the
issue. Excessive emission of carbon pollutants and factory wastes that harm the nature are to be
controlled. Resources like fuel are depleting at fast rate that is making serious concerns for the
industry. Rates are raising that is making the shift towards cars that are eco friendly and more
efficient. Sustainability issues are affecting the profit trends of companies seeing the pollution.
Procedures and manufacturers are required to take their responsibility towards nature and society
and ensure that they make optimum utilisation of the resources and establishing processes that
resources can be reused by companies (Pieterse, 2019).
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PESTLE Analysis of the above issues
Auto-mobile industry plays significant role in the growth of the economy of countries. Industry
is required to assess the factors that are affecting the growth and existence of businesses.
Automotive industry is growing continuously along with new entrant and continuous evolution
in product than also it is important to consider the issues affecting organisations. PESTLE
analysis will help in analysing the factors influencing the automotive factor(Hawkesworth,
2018).
Political Factors
Seeing the impact companies are having on environment and depletion of resources it has
become serious issues for government of countries to take corrective actions for preventing the
companies exploiting environment. Government are facing pressure from society to stop
products harming environment like avoiding manufacturing of diesel cars. It has become global
issues and companies are facing difficulty in expanding their businesses over countries. New
restriction is forcing the companies to take change their processes accordingly. Implementing
new tariff rates are affecting the revenues of companies.
Economic Factor
It is an essential factor that is required to be considered by the organisation as heath and wealth
of the country is dependent on the businesses carried on in an industry. Companies with the
change are using technologies that have reduced the manual work in companies. This is causing
problem of unemployment in country. Profitability of the companies is reduced due to increased
competition in the market and cross countries. Companies for protecting their market share are
reducing their profits by selling products at costs that are reasonable for companies.
Social Factor
Social factors include the factor that are affecting the society as whole. Cars that emits hihgh
carbon pollutants create pollution in the environment. People have become active towards social
and environmental issues. They are moving towards companies that are taking for environment
issues. It is an global issues affecting the industry at large. In many countries people are moving
towards conveyances that do not harm environment. Use of bicycles & electric vehicles by the
society is increasing affecting the industry.
Technological Factor
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Technology is the base of automotive industry and is highly dependent on it for its growth and
success. Globalisation is forcing every company to adopt for technology that are environment
friendly. To remain competitive in the market it is essential for the companies to adopt to these
technologies but cost of implementing them is very high. It is essential for them to ensure that
essential to ensure that products are meeting the needs and demands of customer.
Legal Factor
This analyses the laws and legislations that are being implemented by government of countries.
Companies have to abide by the laws of countries in which they are operating or planning to
expand. Sustainability issues are imposing heavy taxes on natural resources used by companies.
Companies have to comply with rules and regulations of outside countries (Baylis, Owens and
Smith, 2017).
Environmental Factor
The most important factor that is causing the companies to change their processes. This is factor
is affecting the organisational growth and success. Increase in pollution through emission by
vehicles is increasing at very high rate and is affecting the organisations and emphasising them
to shift their focus on environment friendly products.
Positive and Negative impact over organisations.
Positive Impact on Bentley -
Company while expanding over the globe will have the positive impact of globalisation.
Expansion will help the company to increase its market share and its business. Taking the
responsibility towards environment Bentley has put the goal of using renewable materials like
aluminium, plastics and recyclable rubber products (Beck, 2018). This will help the company to
produce sustainable products and service to the market. This approach has helped company in
attracting new customer base increasing its revenues. Company is also following corporate social
responsibility by paying two percent of it profit for charitable purposes. Company is also
involved in activities that encourage people in using environment friendly products and also
taking the seminar for educating people about the environment thus reflecting positive image in
society. Global move of company towards sustainability enforced company to make make green
engines that produce less carbon(Franko, 2019). Has helped the company to gain reputation and
positive image in market. Bentley is using electric and hybrid solutions for making the most
efficient and effective utilisation of the resources. Companies due to globalisation is able to
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expand it business in various countries creating employment opportunities for the people of
economy. The move towards sustainability is helping the company to gain success and
increasing goodwill.
Negative Impact on Bentley
Company while expanding over the globe has to face various laws and regulations. Bentley
while expanding also needs to follow various rules related sustainability. Like for example while
manufacturing cars they need to take care that no amount of pollution is been generated in the
area in which they are expanding. So that they can put a positive image in front of their
consumers. This will help them in increasing their market share. If this has not been followed
then the consumers might get dis-satisfied and it might reduce the sales of their products in the
area which they are expanding(Bourguignon, 2017). Also, there are various rules and regulations
that has been made up by the government. The company also needs to put about 2% of their
profit in corporate social responsibility which is related to sustainability. This can increase the
operational cost of company. It can also reduce their profitability aspect too. Also, they need to
make sure that while manufacturing cars, the carbon emission produced by them must be low. In
this the company has to made high investment related to technology. This can increase their cost
of expenditure and reduce their profitability aspects.
Reflection
When I was starting the report I was really nervous as I have no idea about the issues which are
being faced in automobile sector. Then I made a lot of research and finally came up with the two
major issues which has been faced by automotive sector. These two were globalization and
sustainability. I have no idea what these terms meant. But with the support of my mentor and my
researching skills has helped me in knowing about these. I was really nervous when I started the
project. But these terms have helped me in having an idea about how companies are been
expanded by keeping in mind the things related to sustainability. This has helped me in setting
my career objectives and goals. Now I really wish to make my career in the field of automotive
sector. So that I can bring out the innovative and creative idea. This will also help my country in
increasing the GDP and their national income. It will also help me in growing.
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CONCLUSION
From the above study it has been summarised that company has been engaged in following
corporate social responsibility which has helped them in making positive impact in front of
consumers. They have also been thinking of expanding their company globally. It has also
helped firm in increasing their profitability aspects. It has supported the in growing. They have
also been able to gain competitive advantage.
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REFERENCES
Books and Journals
Baylis, J., Owens, P. and Smith, S. eds., 2017. The globalization of world politics: An
introduction to international relations. Oxford University Press.
Beck, U., 2018. What is globalization?. John Wiley & Sons.
Bourguignon, F., 2017. The globalization of inequality. Princeton University Press.
Franko, K., 2019. Globalization and crime. SAGE Publications Limited.
Hawkesworth, M.E., 2018. Globalization and feminist activism. Rowman & Littlefield.
Hirst, P., Thompson, G. and Bromley, S., 2015. Globalization in question. John Wiley & Sons.
Pieterse, J.N., 2019. Globalization and culture: Global mélange. Rowman & Littlefield
Publishers.
Ritzer, G. and Dean, P., 2015. Globalization: A basic text. John Wiley & Sons.
Steger, M.B., 2017. Globalization: A very short introduction (Vol. 86). Oxford University Press.
[Online]. Available through : <>.
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