Elio Motors: Evaluating China Market for Business Expansion Project

This project analyzes the potential for Elio Motors, a three-wheeled vehicle manufacturer, to expand its business into the Chinese market. The project employs a PESTLE analysis to assess the political, economic, social, technological, environmental, and legal factors influencing the business environment in China. The analysis examines government regulations, economic growth, social demographics, technological advancements, environmental concerns, and legal frameworks to evaluate the opportunities and risks associated with market entry. The project highlights the importance of understanding the Chinese market's unique characteristics, including its large population, educated workforce, and technological innovations. It also addresses challenges such as finding suitable factory space, language barriers, and environmental issues. The conclusion emphasizes the significance of environmental analysis in providing strategic direction for business expansion and recommends a comprehensive approach to mitigate risks and achieve profitability.

Individuals in Society
Project 1

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK ...........................................................................................................................................1
CONCLUSION ...............................................................................................................................4
REFERENCE ..................................................................................................................................5

INTRODUCTION
A business is refers as the activity through which an individual earns his living by
producing, buying or selling goods and services (Ma, 2013). Organisations are widely concern
on diversifying their business as to enhancing their business activities and minimizing risks of
economic fluctuation in the market. Elio Motors is the low cost three wheeled vehicle
manufacturer company which is founded by Paul Elio in the year of 2009. The company is
looking to diversify into the Chinese market in order to gaining more profitability through
introducing new and innovative auto mobile products. For this purpose, it is required for the
company to examine the Chinese market, through using external environmental analysis which is
cover under this project. Apart from this, all the necessary factors those are helpful for
diversification of the business is being done accordingly.
TASK
In today's scenario globalization brings various opportunities for businesses to expand
their operations easily onto the global level and avail the benefits which are offered by a country.
However, while expending to overseas, an organisation needs to conduct a careful evaluation of
the country in which the company is planned to expand. Elio Motors is a innovative three
wheeled vehicle manufacturer company. Elio Motors is planning to expand their business
operations into China and it is the most attractive business location in the world. The major aim
of the firm is to revolutionize the American transportation, the company is creating the ultimate
vehicle for virtually every budget. China is famous for its innovations, the Chinese economy is
dominated by the service sector and it contributed as huge amount in the growth and
development of the economy. Before diversifying into the Chinese market it is essential for Elio
Motors to analyse the market condition as to conducting their business operations in effective
manner. PESTLE analysis is the most appropriate strategy to analyse the Chinese business
environment. It has various elements, which are described as below:
Political Factor: China is the most powerful country on the ground of advanced
technologies and innovation, It also considered as the fourth largest country in the globe by the
land area. Political factor is the primary aspect of environmental analysis as it is the most
essential tool which has a direct influence on the business activities. Political factor is based on
two major elements like government regulation and legal issues (Mao and et. al. 2012). Both the
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formal as well as informal regulations, which firms needs to be abide by, impact the country. The
government of China is concern on promoting the rules and laws. After the revolution of the
culture, a proper legal system to restrict of official revolutionary or authority accesses has been
formed. For diversifying the business in China it is essential for Elio Motors to analyse all the
political factors as well as the legal laws and norms in order to reducing the chance of risk which
are associated throR; put website with date, example "bbc 2017" and end of paige put site and
date when you search this information,ugh political factors.
Economic Factor: China is the second largest economy in the globe by the analysis of
the nominal GDP grew by 6.7% in the last financial year (Reuters, 2018) Thus, it is the largest
economy on the basis of purchasing power of the people. The total unemployment rate in China
has been constant at around four percent over the last few years. This can be wholly analysed
through the fact that due to its socialist heritage, full employment policy historically has
performed a major role in economic considerations of the Chinese government. The total number
of employed persons in China has increased to 77640 Tens of Thousands in the year of 2017
from 77603 Tens of thousands in the year of 2016. The major motive of each country is to
develop their economic condition through enhancing their industrial operations. The
organisations are concern on manufacturing their products in China, because in China the labour
cost is less than the other country which provides with an opportunity to produce products which
are cost effective.
Social Factors: China is the most popular country in the globe with a population over 1.4
billion. The social and cultural elements of China plays an essential role, as the demographics is
constantly change. Majority of people in China are educated as the government invested a huge
amount in the education of the people. The income level is high as most of the population are
educated and employed which states that they will be able to avail products offered by the
company. The business expansion of Elio Motors in China is beneficial for the firm as well as
the country. The social factor has involve various elements like life style, education level,
religion, emigration etc. It is also important for Elio Motors to analyse the social and culture
aspects before diversifying the business in China. In China mostly people are literate and they
are very much concern about the environmental factors (Pan, Lu and Lei, 2017). Elio Motors has
plan to launch a new vehicle which is not much costly and affordable by people from each
segment. The major benefits of expansion in China is that, the production is possible in very less
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cost as in China the labour cost is low. Local people get opportunities for job and use their skills
in betterment of business operations. China is famous for its advancement and Chinese
companies are concern on attempting their targets within the desired time frame. The major
issues which are faced by the company due to the expansion in China is finding a large space to
factory setup, as it is difficult to find a space for their manufacturing purpose. Language and
communication is an another issue which is faced by Elio Motors in China, as people from
different regions, norms and culture are live their, so it is hard for the company or its
management to analyse the needs and wants of people at market place.
Technological Factor: This is also an another essential aspect of environmental analysis,
which plays vast role in determining the technological implementation within the environment.
Technology is the most important component which plays an effective role in developing the
business operations at global level. China is basically famous for its high tech technological
advancement and known to adapt to innovation very easily. The major purpose of Elio Motors
behind the expansion of business in China is that the people in China are more literate and
having vast knowledge in automation which can be helpful for a business in successful
expansion and enhanced sales.
Environmental factor: The continuous development of China has impacted on its natural
environment severely. Air, water pollution, industrial waste, deforestation, climate change etc.
are the most environmental changes which are faced by China. Now the government of China
has taken various initiatives like manufacturing pollution free vehicles, use organic products etc.
the company has plan to launch a new vehicle which is eco-friendly in nature as the vehicle is
pollution free which create benefits for the environment of the China. In china people are very
much based on advance technologies as these are effective in making humans life more easy and
comfortable. In China the organisations are concern on creating new and advance products which
are environmental friendly as to providing benefits to the environment. The company is planned
to expand the business in China and they are plan to introduce a new environmental friendly
vehicle which is effective in saving the environment from the pollution.
Legal Factors: This is the final element which is needs to be determined for conducting
an environmental analysis. There are numerous laws and regulations which regulates the
business and employment practices in China (Wang and et. al., 2011). Some major legal factors
which R; put website with date, example "bbc 2017" and end of paige put site and date when you
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search this information,has direct influence on the industrial practices like labour standards,
employee remuneration and advantages, labour disputes, and other relevant conflicts are
regulated by The PRC Labour Law 1995, the PRC Labour Contract Law 2007, and various
administrative regulations. For diversifying the business in China it is essential for Elio Motors
to have potential knowledge about the legal laws and regulations which are needs to be complied
by them, in order to conduct their business operations in effective manner.
CONCLUSION
From the above given report it has been concluded that environmental analysis is
considered as the most essential element, which plays a vast role in providing a significant
direction to an organisation to expand their business into a new segment. Political, economical,
social, technological, environmental and legal factors are required to be analysed as to reducing
the chance of risk in the start ups of a new business in a new geographical area. The major
purpose of each business enterprises is to attaining high position through gaining higher amount
of profit and growth.
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REFERENCE
Books and Journals :
Ma, J., 2013. The Lahu minority in Southwest China: a response to ethnic marginalization on the
frontier. Routledge.
Mao, Z., and et. al. 2012. Food web structure of a shallow eutrophic lake (Lake Taihu, China)
assessed by stable isotope analysis. Hydrobiologia. 683(1). pp.173-183.
Pan, H., Lu, X. and Lei, K., 2017. A comprehensive analysis of heavy metals in urban road dust
of Xi'an, China: contamination, source apportionment and spatial distribution. Science
of the Total Environment. 609. pp.1361-1369.
Wang, H., and et. al.2011. Soil organic carbon of degraded wetlands treated with freshwater in
the Yellow River Delta, China. Journal of environmental management. 92(10).
pp.2628-2633.
Wang, Z. M., and et. al., 2014. Multivariate statistical analysis and risk assessment of heavy
metals monitored in surface sediment of the Luan River and its tributaries, China.
Human and Ecological Risk Assessment: An International Journal. 20(6). pp.1521-
1537.bad or good factor for a automobile industry in the expansion in china
Online
China's 2017 GDP growth accelerates for first time in seven years, 2018. [Online]. Available
through: <https://www.reuters.com/article/us-china-economy-gdp/chinas-2017-gdp-
growth-accelerates-for-first-time-in-seven-years-idUSKBN1F70OJ>.
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