The Global Business Environment - Volvo Assignment
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Added on 2021-02-22
The Global Business Environment - Volvo Assignment
Added on 2021-02-22
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The Global Business Environment
Table of Contents INTRODUCTION...........................................................................................................................3 TASK...............................................................................................................................................3 a) Major Forces shaping the Business Environment of car Manufacturing Industry.............3 b)EmergingBusinessesopportunitiestobepresentedtoentrepreneursandbusiness executives apart from production and selling.........................................................................6 CONCLUSION................................................................................................................................9 REFERENCES.....................................................................................................................10
INTRODUCTION The term global business environment can be defined as societal and task environment of a corporation affected by global factors. These global factors include economics, labour market, competition, technological force, legal and political force in global context. The concept of this practice is to relate the external environment with the business and understanding the factors affecting it such as legal, political, social, technological and economic. Volvo is Swedish International company established in 1927 headquartered in Sweden deals in wide range of construction equipments, trucks, buses, financial services, product related services and marine and industrial engines worldwide. Volvo also comprises subsidiary company suchasVolvoTrucks,MackTrucks,RenaultTrucks,UDTrucks,VolvoConstruction equipments, Volvo Buses, Volvo Penta, Arquus and Volvo financial services. The following report will include major forces shaping business environment in car manufacturing industry, how industry changed in recent years and other changes that may occur in future gaining competitive advantage; new business opportunities to present to entrepreneurs and business executives apart from producing and selling of electric cars against linked business in automobile industry that may not sustain long run in the market. TASK a) Major Forces shaping the Business Environment of car Manufacturing Industry Raw Material Price:- As Volvo car manufacturing industries enjoyed falling raw material prices from most part of the year which help the industries pass of the benefit to the customer . The fall in steel price is favourable to the industry. But from past second half of year the government decided to increase the20%afeguardincarmanufacturing.SimilarlyTheGovernmentdecisiontobancar production, storage and sale of steel without BIS (Bureau of Indian Standard) certificate is expected which bring hard time for car manufacturing industries. And also the price of Aluminium were an cause of concern for car manufacturing industries as Industries using the aluminium instead of steel to increase the weight of car, and import duty of aluminium was hiked from 5% to 7.5% which didn't go down with the industries as a result the price of aluminium have greater impact on industry. For car manufacturing rubber is also an important raw material prices in tyre industries as tyre prices raised, it also has impact on the sale of car manufacturing
industries. The fall in oil prices also has an impect on car sales as an lower oil price (Dumitrescu, Paraschiv and Nițu, 2019). Interest Rate:- With increase in price rate under control, Reserve Bank Of Indiahad enough headroom to play around with the rates and it has reduce the rate at all possible occasional. 7.5% repo rate is come down to 6% It brought down the interest rate of car loans. At the same time private bank rate has fallen 0.37% on car loan. The biggest rate cut off happened just before the festive season. This gave much helpful to fulfil in the festive season and car manufacturing industries sales nearby 65 percentage of the car bought during festive season are to be financed. Which forcrs the car manufacturing industries in the business environment (Ferraro and Briody, 2017). Policy Bump:- Car manufacturing industries suffered major setback when it see with policy prospective. The biggest problem came when supreme court bane registration diesel vehicle above 2000 cc. It directly impact on sale of vehicles specially Volvo company. As a result of Ban RTO alone suffered a lose of 10 Crore per day as an revenue, because the high rated car pay high rate of payment as on registration fees. And thus the car manufacturing industries sales of vehicles goes down 0.89 percent at 3,34,371 units. It impact the selling rate of car manufacturing industries in business environment (Thanetsunthorn and Wuthisatian, 2016). Changes made in car industries from Last few years Safety needs:- Today car manufacturing industries made several safety changes as compare to ten year ago cars, now car coming with more safety equipment such as car manufacturing providing more air bags in front as well as rear seats and also providing accident avoidance features such as alert sensor, collision warning system, blind spot recognition etc (Prajogo, 2016). Digitalization across the value chain:- More data and connectivity across the value chain and it have impact on entire value chain of the industryfrom exploring the monitoring the opportunities to consumer and transforming employees by using the robotic, the power of digitalization is more substantial. It can be major way for competitive edge. While auto industries supplier and infrastructure leveraging their access to vehicle progressively drive towards innovation and however mobility
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