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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
The Global Business Environment - Volvo Assignment_1
Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
a) Major Forces shaping the Business Environment of car Manufacturing Industry.............3
b) Emerging Businesses opportunities to be presented to entrepreneurs and business
executives apart from production and selling.........................................................................6
CONCLUSION................................................................................................................................9
REFERENCES.....................................................................................................................10
The Global Business Environment - Volvo Assignment_2
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
such as Volvo Trucks, Mack Trucks, Renault Trucks, UD Trucks, Volvo Construction
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
the 20% afeguard in car manufacturing. Similarly The Government decision to ban car
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
The Global Business Environment - Volvo Assignment_3
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 India had 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 industry from 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
The Global Business Environment - Volvo Assignment_4

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