INTRODUCTION: Mercedes Benz is a globally known brand, originated in Germany. Benz is specialized in automobiles like cars, buses, trucks, etc.
EXTERNAL BUSINESS ENVIONMENT: The automobile industry is a multi-billion industry with large brands in market. It’s important to carry out analysis on microenvironment before formulating strategies. To analysis the microenvironment of the business PESTEL framework is used PESTEL FRAMEWORK 1. Political factor Political system related automobile industry is very complicated. The western world is less concern for leading cars because leading car manufactures are from western world. The political issue is more complicated in emerging countries (Bossink and bluaw, 2002).Taxation is also a political factor that affects automobile industries. There are different tax system and import duty in different countries. Export duty charged from 140% to 300% based on car’s engine (royal Malaysian customs and excise department, 2000).
2. Economical factor
Economic factor play an important role in automobile industry. During the financial crises economic condition was not good, the sales of vehicles was down. The demand of luxury cars went down. Exchange rate between different countries differs on their economy.
3. Social factors
Social factor is related to growth of population. Increase in population growth creates demand in automobile industry and the sale of Mercedes Benz will increase. People with higher income like to buy
2. Analysis of the Industry, market size, competition, etc. 2.1. PESTLE A market is the place or medium where specific activities are transacted between businesses and consumers. To study the macro-environment (i.e., external environment), PESTLE analysis is considered to be the most appropriate as suggested by Kotler and Armstrong (2010).
Often, individuals with higher income have flexible regarding purchases considering that they have enough financial power to use on basic needs and to save. As a result, such individuals are expected to buy the company products in bulk or more frequently irrespective of the price of the products. On the other side, low-income earners are not expected to purchase the company products in bulk or frequently. Nevertheless, consumer income is widely affected by the rate of inflation which determines the amount of money they receive as salaries and wages as well as the prices of the company’s product. Inflation is widely defined as the continued increase in prices of products and consumers.
The product that is a “need” for me personally is relaxers for my hair. African Americans have a need for this product, because we have different textures of hair. Some African American have, “the natural look”, and that is ok for some people. I choose to relax my hair, so I have a need for this product.
Ford’s Strengths Firm position in the American auto market. Ford’s biggest market is the United States, which has been doing better economically than the two other large markets, China and Europe, in recent years. Very strong financial position.
Social by at first only the rich being able to buy one. “Society is concerned with the relations of technology to science, politics and economic change” (A&E) and Ford’s developments really changed society. But as years went on the cars being more affordable for everyone. Boosted would be an understatement for what the automobile did for the economy. Sales rocketed like nothing before.
Commercials always have a message they are trying to get the audience to understand. Many commercials have the same message however they are intended for different audiences. The target of the commercials can be define by the elements used in the commercials. Every detail provided by the producers is used to achieve the overall goal. Such details include the actors in the commercial, the setting, the music if provided, the narrator, and the colors to name a few.
The Drowsy Chaperone was an excellent musical production and I believe credit is due to the director first, Tony Mata. The director really has the final say with anything that goes on in the play. He will run the casting, the production concept as a whole, and the movement of the actors on the stage. All of this is the basis for the production with everything else being add-ons. Even though I was hesitant to enjoy the play due to the musical aspect, the casting was spot on, as well as the production itself.
Another socio-cultural factor is the fear of terrorist attacks. Example would be the recent ISIS attacks in France, Russia etc. With terrorist bombing, airline companies are affected by the number of passengers traveling overseas. This could cause a drastic change to Rolls Royce’s income. Urban countries that are affected by overcrowding of air-craft are asking for larger aircraft as larger aircrafts are more powerful.
Huawei, being a multinational company is affected by the external business environment. As such the impact of the external business environment factors on Huawei’s marketing strategy are explained by the PESTEL Model as follows: 1. Political Factors Political factors include laws and legislations which are of great importance due to the fact that they enclose many aspects of a company policy. Through regulatory bodies, the government implements policies that affect businesses in various ways (Vrontis and Pavlou, 2008).
Political factors have huge influence on the profitability of the automobile industry. Political also include goods and services which the government wants to provide and goods
The customers of Mercedes Benz look for products that have certain benefits that hold value for them. Therefore, in terms of benefits sought, they seek for high-end integrated technology and functioning of the car, along with consistency in performance and most importantly they will look to purchase cars that will offer high sustainability and reliability. The Mercedes is purchased among customers that heavily use the product on a daily basis. As mentioned in the demographics segmentation section that people who purchase these cars are in the high income class group, which means that these customers will regularly use a mode of transportation to travel to workplaces.
Francis Aguilar (1967) is the first known reference to the origin of the PESTEL analysis. In his study known as Scanning the Business Environment, he studied the environmental factors that affect business environment and come up with the first acronym ‘ETPS’ which meant the Economic, Technical, Political and social factors (Aguilar, 1967). Later Arnold Brown (1967) focused on the study and came up with a new perspective towards the study of social-technical, economic, political, and ecological (STEPE) factors. In 1980, Porter among other authors scanned the business environment and came up with the current acronym PESTEL meaning political, economic, social, technological, legal, and environmental factors (FME, 2013). According to Collins (1997),
PESTLE analysis is include of political, economic, social, technological, legal and environmental factors. PESTLE is a business tool that used by companies to track and analyse the macro environment in which the company operate. This tool is very useful which help in overall growth and development of organization after learning from the past mistake and working for future. The first factor is political factor which include such as law of land, taxation policies, rules and regulation, trade restriction and so on.
Most of the structural changes and development occur in each organization are cause of the internal and external factors. In order for the organization to make an efficient management, it needs the ability to make structural changes or development in the organization. All this changes and development will aid and continue organization on the right path. Based on Chron website, the changes of structural are because of acquisition, job duplication, market changes, and process changes. The acquisition and merging with another company will give profound effect on organization structure.
The automobile industry in China started from 1953, and has had a rapid development. According to data showed by China Automotive Industry Association (2012), the total yield of cars were 5,7 million and the sale of domestic vehicles was 5,8 million in 2005, respectively increased by 12.55% and 13.54% compared to 2004, shown in Figure 1. With addition of the sale of around 160,000 imported cars, Chinese automobile market exceeded the one of Japan with the total size of nearly 5,92 million cars, ranked second in the whole world. And the production and sales of cars in China was over 18 million in 2010, resulting that China became the biggest automotive market in the world (Chen, et al., 2012). Figure 1.