Volkswagen Pestel Analysis
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PESTEL analysis Political factors
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Finally, the optimal strategy for the organization will be determined. Volkswagen is a company that is well renowned for its cars. From Lamborghini to the Beetles, this company has been able to serve all tiers of the consumer market Myassignment, n. Somehow there are many macro factors that affect the performance of this business. Politically speaking, being present in over countries, Volkswagen has to face many political difficulties.
Each country has its own political system for example the European politics is very different from the American politics and each government has their own sets of policies and regulations that industries have to follow Myassignment, n. The banking and the financial system is greatly influenced by the government and it is a consideration that Volkswagen has to pay attention in terms of auto loans and interest rate. Thus, political pressure is a major setback for Volkswagen. Car manufacturers such as Volkswagen have a major contribution to the GDP of a country. Nowadays many developing countries are opening their door to companies like Volkswagen because it is advantageous to their economy Myassignment, n.
This is a plus point for this business and it will get many incentives to make profit. Somehow an economic crisis can crash the market for automobile. A good example is when USA was facing a period of recession in and many consumers were restricting themselves from buying cars. This can pose to be a problem for Volkswagen. Society plays a big role in the development of the automobile industry. Log electric car industry in , faced the same challenges Tesla being a newcomer to the market and there are many financial problems that require high capital investments, brand building and distributions channels.
However, manufacturers established with great economic power to enter this market is relatively low due to its capabilities and support for a government program to develop electric car Shirouzu, According to the annual report Tesla , they rely on their relationship with Daimler and Toyota Brown 0. The consumers on the other hand, were affected positively as they were able to buy these goods at a lower price than before.
In this situation although corporations would like you to believe otherwise, trade is still advantageous for the U. This is rarely felt though as usually the gains are spread more thinly. Corporations being the losers in this situation may lobby to have people believe this situation is a negative one but it is not. International trade no matter if it is exporting or importing is supposed to be beneficial for everyone even if there are winners and losers. In order to do so, they have to minimize the cost and sell high volumes of cars to enjoy high economies of scale.
The dilemma Cummins Engine Company, Inc. The challenge they faced was adhering to the consent decree and NOx emissions reduction would increase the total cost of ownership for companies purchasing the trucks and companies purchasing the trucks. This is an ethical dilemma within the stakeholder theory. As Wal-Mart begun to grow its business, its environment changed; it forces suppliers and competitors to sell at their cheapest price.
Nowadays Wal-Mart is one of the most successful companies in the world. However their slogan, ' 'everyday low price ' ', has a negative influence on the American economy. What did you notice at the Wal-Mart shareholders meeting? Ford is now looking to push towards electric and greener vehicles. A firm should not only do technological analysis of the industry but also the speed at which technology disrupts that industry. Slow speed will give more time while fast speed of technological disruption may give a firm little time to cope and be profitable. Technology analysis involves understanding the following impacts -. Different markets have different norms or environmental standards which can impact the profitability of an organization in those markets.
Even within a country often states can have different environmental laws and liability laws. For example in United States — Texas and Florida have different liability clauses in case of mishaps or environmental disaster. Similarly a lot of European countries give healthy tax breaks to companies that operate in the renewable sector. Before entering new markets or starting a new business in existing market the firm should carefully evaluate the environmental standards that are required to operate in those markets.
Some of the environmental factors that a firm should consider beforehand are -. In number of countries, the legal framework and institutions are not robust enough to protect the intellectual property rights of an organization. Some of the legal factors that Tata Motors Limited leadership should consider while entering a new market are -. Amazing Business Data Maps. Send your data or let us do the research. We make the greatest data maps. Article continues after ad PESTEL analysis provides great detail about operating challenges Tata Motors Limited will face in prevalent macro environment other than competitive forces.
Tata Motors Limited can closely analyze the following factors before entering or investing in a certain market- Political stability and importance of Auto Manufacturers - Major sector in the country's economy.
