Impact of Environment and PESTLE Analysis on Ford Motors

BUSINESS
STRATEGY

Table of Contents
TASK 1............................................................................................................................................4
P1 Explain the impact of environment and application of PESTLE analysis to a business
organisation............................................................................................................................4
TASK 2............................................................................................................................................6
P2 Application of Micro environment analysis to a business organisation............................6
TASK 3..........................................................................................................................................10
P3 Analysis of competitive environment of an organisation................................................10
TASK 4..........................................................................................................................................12
P4 various strategies that are helping on overcoming threats of business environment......12
CONCLUSION..............................................................................................................................18
REFERNCES.................................................................................................................................19

INTRODUCTION
Brexit is not only related to United Kingdom (UK) is leaving European union but it has
an impact on various organisation functioning in this country. The automotive industry is also
experiencing lot of changes and is getting impacted in a negative manner. There has been a
requirement that this industry has to form various new strategies for the purpose of sustainability
and growth. Present report is based Ford motors one of leading organisation of automotive
industry that is having its headquarters in Detroit. Henry ford laid the foundation of this brand on
June 16, 1903. there are lot of factors that are present in macro and micro environment. It posses
force on functioning of a administration (Johnson, 2016). This report discussed about such
factors based on use of frameworks such as PESTLE analysis. Further, SWOT analysis and all
such information is used in formation of strategies by Ford. These strategies are to be formed to
deal with various changes that are impacting performance of this organisation because of
prevailing referendum of Brexit.
TASK 1
P1 Explain the impact of environment and application of PESTLE analysis to a business
organisation
Micro environment: Micro environment is the environment that is having an immediate and
direct impact on functioning of a organisation (Lozano,, 2018).
Macro environment: These are the environmental factors that are connected with economy as a
whole. It is related with various trends that are flourishing in the external economy of a country.
Such as GDP, Spending, employment, inflation rate and fiscal & monetary policies.
PESTEL analysis:
There are various different external factors that are present in macro environment of a
business organisation and poses impact on how these organisations are functioning. Below
discussed is the PESTLE analysis of Ford motors, the sudden BREXIT change has resulted in
this company getting affected by lot of environmental factors in both positive and negative
manner as discussed below:
Political factor: These factors are related with how governmental actions are affecting a
particular organisation. In UK BREXIT is a referendum that is part of political decision taken by
UK government.

Negative: The overall political instability in European union is posing a threat for Ford as
it is resulting into negative impact on performance of this organisation in the market. It has
resulted in reduction of demand in the market as there has been increase in tariff rates on exports
and imports that leads to delay at UK border ( Ling, 2019).
Positive: Free trade agreements & government incentives in case of emerging markets is
providing ample number of growth opportunities for Ford. Government in Asia is supporting
automotive industry as there is projected increase in demand in coming period of time. For
example: in Brazil registration number increased by 11% it lead to various growth opportunities
for Ford.
Economical factors: There are various economical factors related to economy of a country and
posses a impact on overall functioning of an organisation (Landrum,. and Ohsowski, 2018).
Positive: Various emerging players of Asia are offering a demand for vehicles which
Ford is willing to fulfil. There have been many open trade agreements that is promising for
increased sales.
Negative: This may have a negative impact in the form that such open trade agreements
between economies of a country also result into increasing risk of competition and chances of
market saturation in future.
Social factor: Consumers today have lot of options available with them when it is related with
auto-mobile industry.
Positive: There has been opportunity for hybrid & electric vehicle category and demand
for hybrid cars is increasing. Ford has already been involved in introduction of variants in such
categories for increasing their revenue.
Negative: there are multiple players in a country and there is presence of near saturated
markets all this is posing difficulty in attracting buyers for Companies like Ford.
Technological factors: Technology is playing a significant role for consumers while choosing a
vehicle. The Population is experiencing demand for such cars that are up to with current and
updated technological strategy like automatic windows.
Positive: Ford has successfully incorporated most modern gadget in their vehicle.
Negative: there is a requirement of huge investment that have to be done by Companies
such as Ford for adoption of new and latest technologies (Gerged,, Cowton,. and Beddewela,

2018). Such as there has been a recent investment of one billion dollars in autonomous research
of vehicle done by Ford to emerge as a leader in market.
Legal factors: These factors are connected with a variety of authorized rules and regulations that
have to be followed compulsorily by business organisations.
Positive: following of all safety regulations and environmental regulation has lead to
increase in growth of organisation such as Ford. Ford has the opportunity to align themselves to
such regulations for better designs of product and safer working environment.
Negative: there are lot of regulations, which lead to rise in amount of overall regulations
for a industry or a organisation. It leads to lot of policies and procedures that have to be adopted
by various stakeholders that are part of the organisation (Goodman, Korsunova, . and Halme, ,
2017).
Environmental factors: there are many different types of factor that are present in external
business environment and have to be taken care to reduce their overall negative impact.
Positive: global demands is creating a opportunity for automotive industry to expand
their production towards hybrid and electric models of vehicles. Ford is also focusses on
emerging segment of markets which is helping them in holding potential for future growth
prospective.
Negative: for organisation Working in automotive industry there is always a increased
pressure to have high concern for environmental factors and to make sure that they are not
posing any negative impact on the external environment in form of emission of harmful
substances.
TASK 2
P2 Application of Micro environment analysis to a business organisation
There are various micro environmental factors that have an impact on the internal
functioning of a business organisation. These factors are affecting functioning and achievement
of business objectives. In case of Ford such SWOT analysis is done below:
Strength:
Global recognition: Ford is a recognized brand name in automotive business plus is
having a high range of success in many countries because of quality products which they offer to
their customers.