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PESTEL analysis of the automotive industry in United Kingdom - Essay Example

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The essay elaborates PESTEL analysis of the automotive industry in United Kingdom. Ford Motor Company is a Multinational automotive company which is headquartered in U.S. It decides to expand its market by setting up a manufacturing base in UK…
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PESTEL analysis of the automotive industry in United Kingdom
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PESTEL analysis of the automotive industry in United Kingdom

Download file to see previous pages... It elaborates the macroeconomic factors that are used to scan the environment before taking any strategic decision in an organisation (Mercer, 2008). PESTEL stands for: P- Political; E- Economic; S- Social; T- Technological; E-Environmental; L- Legal. The few constituents of PESTEL of the automotive industry are as follows: The firms should be aware of the political factors like the trading policies, governmental changes in rules and regulations of the production of cars which includes safety standards and fuel emissions. Economic factors influencing business includes taxation policies, economies and trends, trade cycles and exchange rate and interest rate changes (Thompson, 2001). Cars are the polluting agents which pollute the environment to such an extent that it can be dangerous to the society and large emission of harmful gases can even lead to diseases. Cars manufactures are introducing Alternative Energy Vehicles that use only electricity and has rechargeable battery (Booz, 2008). The challenges that are faced by the automotive industry are that it is very expensive and this will be the solution for lowering pollutants. Environmental pollutants have been the basic challenge for this industry which is threatening the automotive industry worldwide and thus they should pay attention to the alternative energy vehicle (Ferrel, 2012). The firm should always comply with all rules and regulations that are levied on car manufacturing , such as safety and standard issues, gas emission laws, vehicles regulations, etc (Mercer, 2008). 2. Trend forecast for 2016 Fords Motor Company, an automobile giant has it’s headquarter in United States. It has expanded its market in many countries like Japan, India etc. Ford has been suffering from many hurdles which are affecting the business. The challenges are coming from the macroeconomic environment and it has threatened their existence. PESTEL analysis has been done to identify the factors that are affecting the existence of the automotive company (Craik, 2013). The following are the challenges that are faced by Ford and their future planning till 2016 so that they can overcome the challenges: 1) The rising price of oil has made customers less automotive friendly (Ferrel, 2012). Ford has been doing technological adjustment which is helping them build a modern standard in the present outline. By 2016 it will reach its destination by creating such technologies which can even give the solution for using expensive oils. In many countries, the financer of the organisation has been playing a crucial role in the development and the progress of the organisation (Ferrel, 2012). 2) Accelerating growth in the developing countries is very difficult and thus attaining customers is near to impossible. But Ford has targeted a potential market to penetrate with its motors and thus give them a changed phase by the year 2016. 3) The sale of Ford was also affected by the types of motors that are being used by the people. But when the income of the mass is elevated to that position that they can pay attention to own a luxury car the sale of Ford has increased (Burrow, 2011). For the future development Ford concentrate on developing low priced cars so that it can be afforded by the mass (Sturgeon and Biesebroeck, 2010). 4) Consumer preferences changes from time to time (Miller, 2012). Their taste and likings are not stagnant for all time. They try to experience new brands and that affects the sales of the ...Download file to see next pagesRead More
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