Macro Environmental Forces Analysis, Economic Trends, and Ethical Concerns - Assignment Example

John reports that global competition has greatly influenced the operation of the automobile industry. He notes this with the Ford, Toyota, and General Motors companies that have engaged each other in stiff completion for the global market. For instance, for an automobile company to remain relevant in the market, most of them employ the strategy of lowering their costs to attract customers. This has been the war witnessed between Toyota and Ford and General Motors Company as noted by John (1999).

Political/Government factors also impact the automobile industry's strategic planning as government laws and regulations require them to engage in the production of eco-friendly automobiles (John, 1999). John reports that due to environmental concerns, car companies are being forced to abide by the regulations aimed at mitigating the levels of pollution. For instance, car companies are expected to adhere to Average Fuel Economy, which took effect in 1975 (John, 1999). Failure to comply with these regulations attracts heavy fines, which proves costly to these companies.

For instance, these regulations have forced most of these companies to engage in the manufacture of eco-friendly and fuel-efficient cars (John, 1999). John reports that the government's bid to lower the rate of employment has discouraged Ford Motors for instance, from fully automating its operation, which would in a way take up local jobs. The same has been witnessed with General Motors Company and Toyota as well. Technological changes taking place all over the world requires technological changes within automobile industries (Reynolds and Lancaster, 2012).

This is because some companies in the automobile industry have come up with more eco-friendly, and fuel-efficient cars that are in high demand. A case in point is the most recent electric car. This means that other companies have to emulate this to remain relevant and have a competitive advantage over other competitors. Economic trends are the changes that occur in the economies of countries across the globe. The automobile industry is among the industries largely affected by economic trends.

For instance, the increased fuel prices occasioned by inflation in the United States have largely affected all automobile manufacturers, like General Motors, Toyota, and Ford among others. John (1999) argues that many customers have had to struggle with these rising fuel prices. This has forced many car companies to shift to the manufacture of smaller cars that are fuel efficient. To win more customers, automobile companies like Toyota and General Motors have begun manufacturing hybrid cars, which are fuel-efficient and cost-effective (John, 1999).

Ethics entails acting within the established code of conduct. The automobile industries also have ethical codes that govern their operation. This mainly pertains to social responsibility. For instance, automobile industries are required to manufacture eco-friendly automobiles (Reynolds and Lancaster, 2012). This has forced most of these companies to engage in the manufacture of automobiles that are eco-friendly to conserve the environment. A case in point has been seen with Ford Motors and General Motors which have taken the initiative to manufacture environmentally friendly cars in conformity with the Kyoto Protocol and other environmental regulations (Ford Motor Company, 2011).

To show corporate social responsibility, car companies tend to engage in several initiatives such as sponsorships, and construction of development projects across countries where they operate. Socio-cultural factors also influence the automobile industry. Different people exhibit different lifestyles and preferences (Reynolds and Lancaster, 2012). This hugely impacts the choice of the type of automobile. Similarly, social norms also influence the decision of an individual to own and use an automobile.

Regarding preferences, most consumers tend to demand safer, high-quality automobiles at lower prices. This has forced most car companies to search for cheaper means of manufacturing, including outsourcing. Ford, Toyota, and General Motors, for instance, ensure that their automobiles match consumers’ tastes and preferences to remain competitive in the market (Ford Motor Company, 2011). Demographics also influence automobile industries. This pertains to population trends in a given area.

This has forced most car companies to venture mainly into countries with a high population of customers who have a high preference for their products (Reynolds and Lancaster, 2012). Therefore, taking into consideration the demographic will enable these companies to expand their brunches only in countries with a high population of customers, thus increasing their performance and sales turnover. In conclusion, it is evident that macro-environmental factors greatly affect the operation of automobile industries. Therefore, these companies must carry out constant analysis of the impacts of these factors to be able to make adjustments and be competitive in the market.