The Global Business Environment (DOC)

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THE GLOBAL BUSINESSENVIRONMENT
Table of ContentsINTRODUCTION...........................................................................................................................3TASK...............................................................................................................................................3a) Assessing environment of the Global Auto mobile industry using PESTEL analysis...........3b) Assessing the environment of Global Auto mobile industry using Porter’s Five Forcesanalysis........................................................................................................................................6CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
INTRODUCTIONEuropean auto mobile industry is one of the largest industries in the world. The turnovergenerated by this automotive sector represents 6.8% of EU GDP. The present report is givingbrief discussion about Auto mobile industry of eastern Europe. It is clearly depicting the automobile industry which has ripple effects throughout the economy, supporting a vast supply chainand generating an array of business services. In the same series it is depicting environment ofglobal Auto mobile industry.The European auto industry is a global player which is delivering quality service andproducts around the world. Present report will focus on “Car Production Surges in EasternEurope” and its impact on the auto mobile industry. It will discuss about external factors, whichaffects them by studying PESTLE analysis and also evaluates competitive analysis byimplementing Porter’s Five Forces model.TASKa)Assessing environment of the Global Auto mobile industry using PESTEL analysisPESTLE analysis is a process, which is used to analyse the external environmentalfactors, which can affect the entire organization to a large extent. Factors that are included in thisanalysis include political, economic, social culture, technological, environmental and legalfactors respectively(PESTEL Analysis for Automobile Industry in Europe,2018).Political FactorsThis includes the political factors related to governmental policiesfor auto mobile industry. Some political factors, which can affect theEastern European auto mobile industry are as follows:There are many rules and regulations, which can influencethis industry. For example, during economic and financialcrisis, there were different government norms that helped thisindustry.There are different incentive schemes, which were alsolaunched by the government(Belton, 2017).Implications of different government foreign policies andtaxes also play a crucial role in auto mobile industry.Government subsidies are other political factors which haveto manage by this industry to work effectively in the market.
The markets like EU and UK are providing governmentsubsidy for the low emission vehicles which can help them inimproving their services.The import and export laws that vary across nations can alsobe a headache for auto makers in case of the nations whereimport laws are stiff(Belton, 2017).Economic FactorsThere are various factors, which are included in this economic factorthat can affect this industry such as,The main factor, which affects the auto mobile industry, isfluctuation in the economy, for example financial crisis.High gas prices in the West have also encouraged consumersto start shifting from big cars and S.U.V.'s to compact carsthat have become a specialty in Eastern Europe.Inflation rate is also a factor, which affects the entire automobile industry (Brinkman, Navarro and Harper, 2014).Excess car production increases marketing revenue as well asdesigning new products.The size of the economy and the economic conditionsglobally, have a major impact on the profitability of the autoindustry in various markets.Social Culture FactorsThese factors include customers taste and preferences in selectingvehicles for them such as,There is a huge change in buying behaviorof the consumers,for example, customers prefer more luxurious cars ascompared to basic one.Sudden change in the buying pattern of their customers hasalso affected their production rate (Checchinato and Hu,2018).Different laws and regulations related to the government arealso impacting them.Customers concern related to high fuel efficiency and
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