International Business Report: Auto-mobile Industry Audit and Analysis

This report offers a comprehensive analysis of the auto-mobile industry within the context of international business. It begins with an introduction highlighting the industry's significance in global economic development, followed by an audit of the UK auto-mobile industry, examining its evolution, competitive landscape, and the potential for companies like Apple to enter the sector. The report then conducts a detailed SWOT analysis, evaluating the strengths, weaknesses, opportunities, and threats facing the industry, including factors such as technological advancements, customer demands, cost control, and the impact of government regulations. Opportunities such as introducing fuel-efficient vehicles, strategic alliances, and market expansion are explored, alongside threats such as recalls and customer bargaining power. The analysis provides insights into market dynamics and strategic recommendations for businesses operating in the auto-mobile sector, emphasizing the importance of innovation, customer satisfaction, and strategic planning in achieving competitive advantages and sustainable growth.

INTERNATIONAL
BUSINESS

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK ..............................................................................................................................................1
(A) Audit of Auto-mobile industry ............................................................................................1
(B) Major macro environmental factors .....................................................................................6
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Automotive industry is the leading sector at global level. It plays an important role in
global economic development due to increased costumer demands and high revenues. This
industry assists to foster development of economy of the nation, therefore, it is largely
recognised as leading economic sector (Reisman and et. al., 2015). The industry consists of many
companies that are specialized in manufacturing of car as well as marketing & distribution of
products related to auto mobiles. The global automotive sector incorporates various large
business enterprise blocs that work jointly world wide. Main aim of this report is is to administer
a elaborated investigation of auto mobile industry that provides a clear description of the sector
for today and future prospects.
TASK
(A) Audit of Auto-mobile industry
As there is increase in competition in the economy and firms are mainly focused on
expanding their overall business operations in the economy and this is valuable factor for them in
order to achieve competitive gains at market places (Achtenhagen, Melin and Naldi, 2013).
There is diversity seen in UK auto-mobile industries where some of the companies have failed in
their operations and others have achieved success in their ventures. The auto-mobile industries of
UK have evolved world wide and they are having diverse nature where large number of other
brand firms are located here and they are also providing services to customers. Apple want to
expand their operations in auto-mobile sector thus it is important factor for them in order to
know about the expectations of customers so they can easily achieve success in their operations.
UK have always achieved growth by making inward investment in their projects and this is the
major reason behind their success. They are making plans in order to develop new models of cars
with added features by which people can safely travel. Apple should mainly focus on their cars
that they should not emit large amount of smoke as it affects health aspects of customers and this
ultimately results in enhancing their overall sales and profitability ratios. In this modern era each
business organisation is focused on expanding their business activities at large scale in order to
attaining more profit and revenue. Apple is a popular multinational company who deals in
variety of goods and services and widely concern on satisfying the needs and wants of people
through offering them goods and services as per their own choice and preferences. Apple is
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famous for its high quality products and services as the company is mainly concern on quality of
products rather than its price. Expansion of business or its activities helps in generating job
opportunities for people who are having significant skills to enhance organisational performance
through contributing their vast efforts. Apple has decide to expand their business in auto-mobile
sector as in this competitive era in the sector of auto-mobile there are various opportunities are
available for people as this sector has various department in which organisation need highly
skilled and educated people for achieving goals and objectives at work place. The major reason
behind SWOT Analysis is related with add values to products and services which are offered by
firms. This is an important factors as it helps in attracting customers who will be buying the
products, retaining customers for long time so they will increase profitability of firms and the
services will also be offered to their potential customers over long time durations. There can be
higher return on investment generated by which firms can earn higher profitability in order to
achieve growth and success in their overall business operations. SWOT analysis is more
effective in conducting an effective industrial analysis as it mainly consist on four major aspects
such as strength, weaknesses, opportunities and treats, these all are evaluated as under:
Strength:
The strong factors of auto-mobile industry are evaluated below as: Evolving industry: The auto-mobile industries in the economy are the representation of
economic growth and freedom. These sectors are valuable for persons by which people
can easily travel from one location to another (Ball and et. al., 2012). Each trips which
are executed by auto-mobile sector are having some economic advantages and they are
also providing quality aspects to different factors of life. This industry is having the
major strength as it is growing at every stage in order to provide services to their
customers. Advanced technology: As there is advancement in technologies so firms can easily
expand their products lines by making innovation in their products and services which are
offered to customers. There are new features added like CNG gas kits and alternative
fuels in order to reduce cost. The major focus of auto mobile industry is linked with
research and development expenditure so they can achieve growth in next and upcoming
phases of industries by using various renewable sources of energy and these can be in the
form of wind or solar energy.
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 High demand for Value for Money vehicles: As there is higher competition in the
economy and the auto-mobile sectors are mainly targeting the developing countries as the
customers’ demands are higher in these regions. People are mainly focused on purchasing
those vehicles which are having value for money and this can be in the form of efficient
fuel and also they should provide high mileage so people can easily travel to different
locations. On the other aspect the nations which are at developing stages needs vehicles
in order to make travelling easier and safe and the vehicles who are having good engines
and battery backups are suitable for long routes. Cost Control: As the auto-mobile industries are mostly focusing on controlling cost
factors in order to enhance their overall sales and profitability ratios. The firms are
mostly focusing on building their plans in developing nations like china and India
(Beamish, 2013). The developing nations are having labour available at low cost, the
resources are abundantly available which are valuable for manufacturing of different type
of vehicles, these nations are having higher economic values which helps them to achieve
success in their overall business operations.
Weaknesses:
Weakness of auto-mobile industries are evaluated as: Recalled cars: As there is advancement in technologies so people are demanding those
cars which are having modern tools and equipment’s so they can easily fulfil expectations
of all their customers. This results in loss for firms as they are not able to clear their
existing stocks because demands of people are changing constantly. These industries
have to follow rules and regulations which are implemented by government in order to
manufacture products which can easily satisfy needs and wants of all their potential
customers. Customers bargaining powers: As there is growth and development in the economy it is
identified that market of auto-mobile sector had shifted from demand factors to supply
factors. As there are large number of rivalry firms available who are dealing in similar
business operations thus customers are having different choices and they can easily
compare the prices of vehicles and accordingly they can buy products which are best
suitable to them according to prices and other features (Cavusgil and Knight, 2015). As
there is higher competition in the economy so firms should mainly focus on analysing the
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plans and policies which are adopted by the rivalry business so they can easily achieve
competitive gains at market places. Growth rates of auto mobile industry: The growth and success of auto mobile industries
are in the hand of the government authorities as they are executing different types of
exercise duties and tax rates while vehicles are taking entry into different locations. The
validly period of vehicles are also decided by government authorities thus it greatly
affects the fuel prices of vehicles. All these are the major factors by which economy are
not able to achieve growth and success in their overall business operations.
Opportunities:
Opportunities can be considered as the exploitable set of circumstances with some
uncertain outcomes that are essential for commitment of resources and including exposure to
risk. Opportunities are occurring due to analysing the strength of firm as opportunities can be
considered as the major strength of firm. As an American multinational company Apple is
concern on expanding its business activities in auto-mobile sector in order to gaining more
profitability and competitive edge at market place. With the expansion of business various
opportunities are generated which are essential for people who are facing the issue of
unemployment. Organisations has various opportunities; in which some are evaluated as below: Introducing fuel-efficient vehicles: It can be considered as the good opportunity for the
auto-mobile company as the optimization of fuel combustion engines and cost efficiency
programs are effective for auto-mobile sector. In this modern era the industry of auto-
mobile has the ability to provide various job opportunities to people as it is effective n
generating high profitability through offering variety of gods and services to their
potential customers. Auto-mobile in contributes a huge amount of rupee in developing
economic condition of country. Emerging markets are the major growth drivers for a long
time to come, and the fuel efficient cars are the need of the hour. Strategic Alliances: This can be evaluated as the smartest strategy for auto-mobile
company, it can be considered into proper action through using partnering and
capabilities with other organisations who are dealing in the same field (Cavusgil and et.
al., 2014). With this companies can differentiate their offered goods and services in
respect to gaining more profit and revenue at market place.
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 Changing life style and customers group: There are various forces that are essential for
rolling the auto mobile industry. It is required for each business organisation to fulfil the
demand and needs of customers in order to sustain them for long time. As a large
business enterprises company spend a huge amount in analysing the current needs and
wants of customers in order to producing more effective and innovative products which
are able to satisfying the preferences of people. With the help of better opportunities
people can enhance their life style and living standard.
 Market expansion: This is the key factor which helps in providing various job
opportunities for organisational as well as outside people. With the help of market
expansion organisations are able to earn huge amount of profit through fulfilling the
needs and demand of customers as profitability of firm can be enhanced (Folsom and et.
al., 2012). As a popular brand Apple has wide range of customers who are regularly
taking advantage of offered products and services of firm so company is having wide
range of market share which helps in generating high growth and profit for company.
Opportunities are beneficial for firm as these are arise through expansion of business or
its activities at wide range. One of the major opportunities lies with the company is that they can
lower the pieces of goods and services to penetrate people into the market. This will ensure that
the budget conscious people will be able to avail products and services of this mega innovator.
The another essential opportunity is that company have to strengthen their distribution channels
in respect to providing variety of goods and services to their potential buyers who are not able to
reach at the stores and outlets. Company is widely concern on expanding their outlets and stores
in the areas where the demand of Apple product is high so that people can easily consume the
available offers and services in effective and efficient manner. The another opportunity of Apple
is that the company can venture into new market segmentation and carries huge scope of growth
despite presence of some aggressive rivals, this opportunity can be further supported by the
brand image of company.
Threats:
This can be considered as the major issues of firm which are faced by them in their
regular activities. Threats are effective in restrict the business for expand its activities at wide
geographical area. Some major threats of auto-mobile firms are described as below:
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 Intense Competition: In this modern era competition is so high, so each business
organisations are focused on reaching at higher position in order to providing high
competition to their competitors. Volatility in the fuel price: It is also an another essential threat of auto-mobile sector
(Dunning, 2012). The price of petrol fluctuates according to the resources that are
available in the economy. In this government plays a vest role in charging tax on the
prices of fuel, so in mainly companies are concern on manufacturing vehicles that
incurred less range of petrol and fuel.
 High fixed cost and investment in research and development: In respect to providing
high featured and innovative products to their potential customers it is required for firm
to analyse the market and identify the needs and wants of customers for producing more
effective goods for satisfying the wants of customers. Company is spending a huge
amount of rupee in research and development just for identifying the current trend and
needs of buyers who are very much willing to taking advantage of offered products and
services of firm. This is a best way to attracting large number of customers towards firm
or its offered products and services.
(B) Major macro environmental factors
Macro environmental factors are the major uncontrollable factors that influence the
working of an organisation and its strategies, decision making and performance. Every business
activity is influenced by these factors. They can decrease or increase need of product or develop
completely new needs (Sciascia and et. al., 2012). Cost of raw materials might be driven high or
low and old markets may be changed and new ones are created. So, it is necessary for the firm to
identify those forces that directly influence the business of the organisation and determine and
evaluate their nature.
As per the opinion of Pratap., A,. 2016. in today's world auto mobiles are more
convenient, safe, less costly and durable in comparison of past. By manufacturing driver less and
smart auto mobiles, the industry is entering into era of technological innovation. Like any other
sector, automotive industry is also influenced by macro environment forces such as economic,
social, political, technological, environmental and legal factors. Analysis of these forces assists
businesses in formulating appropriate strategies so that influence of these factors on industry can
be minimize. So, it is necessary to pay attention to use theories and strategic tools.
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Political: According to the views of.... political factors play vital role and impact directly
on the profitability of the firm. The legal authority of all over the world favouring low emission
conveyance. Apart from that, fuel guzzlers and taxes have grown higher. Government provides
subsidy to the markets of United Kingdom for these kinds of vehicles. The demand of
environmental friendly vehicles is grown at global level. The auto mobile industry receives high
support from government for their low influence on environment. Rules and regulations by legal
authority highly affect the revenues of the firms. Low emission and fuel efficient technologies
can easily pass the rules of government. Taxes and import laws are different for each country.
There are many political factors that influence auto industry. According to...., changing laws and
policies of government as well as market political regulation cause unfavourable or favourable
fluctuations time to time (Wales, Gupta and Mousa, 2013). These factors are uncontrollable, still,
firms have shifted their production bases to those countries where regulations related to wage are
lenient. Firms have to maintain their costs and these factors plays important role in it.
Management team of Apple should have to follow all the laws and regulations that are made by
the government so that they can take advantages of subsidies and other benefits are provided by
the government.
Economical: According to …., increased prices of auto mobiles are associated with
economic crisis and inflation rate. The automotive sector is highly hit by the by the recent crisis.
Vehicles sales fall down when condition of economy is not good. The demand of high priced or
luxury cars are is influenced poorly. Apart from that, taxes are also high in some markets. The
sales of vehicles are high in developed countries but, in under developed and developing
markets, sales are low comparatively. In developed markets, purchasing power of buyers is high.
Thus, economic condition and its size have major influence on profitability of automotive sector
in various markets.
As per the view point of Zaheer, Schomaker and Nachum, 2012some factors such as
buying capacity, prices for resources and materials, taxes by local government, population
growth, commercial use of vehicles, economic activities and other factors plays crucial role in
shifting of price elasticity and supply demands of the industry. The profitability of automotive
sector is connected to the customer's financial opportunity. So, it is necessary for the
management of Apple to consider economic condition of the country. If the company emphasizes
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on bringing low price cars in the market place then, they are able to capture large market
segment and attract more customers.
Socio cultural: These factors include education level, growth rate of population, cultural
differences, life style, influence of customer buying habits, attitudes of buyer towards green auto
mobile products, safety issues etc. as per the view point of Poulis and Plakoyiannaki, 2013 socio
cultural factors affect the growth and development of auto mobile industry. It relies on
customer's preferences including those who need to buy car for family. The consider safety,
space availability and price of the car. Changing trends and customer preferences encourage
industry to manufacture products cars according to that. Every year, firms introduce new models
in the market by keeping in mind, the needs and preferences. Age distribution is also an essential
factor that should be kept on mind when targeting customers. So, it is necessary for the
management to consider all the socio cultural factors and keep in mind, customer preferences
and market trends while manufacturing any car as the trends are constantly changing and
influence the popularity of models and brand.
Technological: Technology play an important role in order to gain market share of keen
competitive world. This enable business to organise their operations in more effective and
efficient manner so that more and more goals and targets get accomplish effectively. Thus, in
automotive industry technology and utilisation or new modification into business is essential.
According to the Wild, Wild and Han, 2014technology is vital factor of business through which
management become able to generate more and more revenue for the business. Innovation and
invention both are dual coin aspects of technology which enable an association to grow and
expand their market area so that better and appropriate future could be encourage. Hence, more
and appropriate innovation of a company always enforce them towards positive direction as well
as market share get enhance. Although, entities start investing huge amount of money in their
research and development department so that new and attractive innovation could be gain by an
organisation. Brands like Toyota, Hyundai and Ford are investing in low emission and
environment friendly vehicles. Automotive companies try to determine many new and high
security features vehicles at optimum rate so that better and effective sales could manage and all
targets of sales get accomplish within a year.
As per the view point of Griffin and Pustay, 2012 stated that technology is dynamic in
nature and management have to spent appropriate amount on it as well as frame suitable
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strategies to deal with such concern of macro environment factor. Management of Apple or other
associations have to take all new technologies and invention in consideration when they lead to
manufacture high quality products like cars. Moreover, with a change of time frame, many
companies start determining such concept which are low emission in range so that better and
healthy environment get promote which directly impacted on positive working.
Environmental: Environment is a major and important aspect of PESTEL analysis in
which business have to take in consideration about all eco-friendly aspects. There are various
regulations frame by government along with various environment protecting agencies are
working in such stiff. Hence, automotive industries manufacture cars which have to be emission
free in nature and do not lead to impacted environment. If a company do not follow the right
things properly then it impacted on ecology of a country or globe as well. A major case was
determining in such aspect where Volkswagen was engage in global scandal of emission. As a
result, they need to recall more than 5 million vehicles.
According to the Jenkins, 2013 it gets stated that business have a major responsibility
towards environment in which they do not have to follow such steps which impacted on
environment and affect Ozone layer. With increase in pollution, ozone layer is getting impacted
which further enhance global warming chances. Moreover, government also support such
automotive properly as local bodies provide tax subsidies to all such companies whom are
producing low emission vehicles. United Kingdom and European Union making their emission
test more and more strict in nature in which they are taking each and every aspect in account
properly so that they become able to get manufacture and promote such vehicles which are
emission free in nature. Environment friendliness has become an important test for the vehicle
makers in the 21st century as governments have started focusing heavily on pollution control.
This is an appropriate aspect for many manufacturer of automotive in order to bring healthy and
friendly environment which reflect less diseases in nature. Along with this, another environment
is related with business in which all operations are getting done. This system includes, nature of
market so that better and effective approaches could be managing.
Legal: According to the Killing, 2012 regulations always enforce association or an
individual to not to commit anything wrong and follow ethical direction so that better and
appropriate working could be encouraging. Hence, there are various laws passed by regulatory
bodies of a country which have to follow by business owners as well as individual properly
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through which appropriate and effective working could be motivated. In automotive industry,
legislations and general laws always impacted performance and profitability of business. As per
the view point of..., business profit margin and revenue generation capacity is in the hands of
regulatory bodies otherwise government have a right to sue against them and take a strict action
as well like cancelling of license. For this consent, government passed an act which is The Air
Act of 1981 under which all industries whom are operating in air pollution field have to take
consent from state board of a country. Hence, government make many laws in order to restrict
many associations to not to disobey the rules and regulations and manufacture such vehicles
which are emission free in nature.
RECOMMENDATIONS
By applying new policies and strategies, the company can easily expand its business in
other countries. Company can enter new market in order to capture large market share. Recently
Toyota, recall their vehicles due to airbags issue which further create positive brand image of a
company. Along with this, VWAG global emission scandal impacted negative image of
Volkswagen in United State market thus, their 40% market share get wiped out because US
protection agency claimed that vehicles emission passes by cheating. Apart from these, there are
several other regulations like related with Taxation etc. all have to take in account by company
properly. According to the Penrose, 2013 laws are helpful in order to bring safeguard and fair
competition in business environment. Thus, this enable an association to work in a positive
manner as well as they should have to take care about each and every customer properly as well.
CONCLUSION
As per the above mentioned report, it has been concluded that auto mobile industry is the
fastest growing sector of the world. It plays vital role in the growth and development of the
economy. SWOT Analysis assists in determining the strengths and opportunities so that firm can
gain higher profitability. Macro environmental factors, that is, political, legal, socio economic,
technological, environmental and economic forces highly influence performance, decision
making and strategies of an organisation. These are uncontrollable factors that should be
considered by every firm in order to ensure high profitability and attain higher growth.
Assessment of these factors assists business enterprise in developing effective strategies in order
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