Description
Using the PESTEL framework , External Analysis to analyze the competitiveness of automotive industry for FORD.
Unformatted Attachment Preview
External Analysis to analyze the
competitiveness of ___ industry
for _____
Introduction of company
• Clear description of company
– Give a general overview of the company
– What are the business units within the company
• Is the subject of this analysis a specific business
unit? If so state
• Scope
• What industry is this business(unit) competing
within
• {Do not skip or treat any part of this slide cursory
manner}
Industry
• provide a clear description
• What is the structure of the industry
• Who are the key players in that industry- provide
names/position
• What is the size, growth forecast of the industry
• What is the scope of your analysis
• What is the stage of the business lifecycle? Emerging, growth, declining,
mature
• (use graphics here if you can)
• Current/Future trends
• {Do not skip or treat any part of this slide cursory
manner}
Industry
• Identify the main competitors (direct, indirect)
– Market share
– Other relevant info
– Basis of competition
• (use graphics here if you can)
Background of Company
Mission statement of company
Macro environment Analysis: PEST(EL)
– Generally you are seeking to find out questions – “What is the likely
impact of all of the things that affect the growth of our industry”
– Use a template explore a few factors: each factor will have an impact
on your business: they can give you opportunities or pose a threat
– Apply the PEST to your business
• (select at least three factors: for each force, evaluate its impact on the
business, is it an opportunity or threat?)
• {I have included a few factors which by no means represents a comprehensive
list. It serves as a starter}
Source:
– http://www.whatmakesagoodleader.com/support-files/strategicplanning-template-macro.pdf
– http://pestleanalysis.com/how-to-create-pestle-analysis-template/
Political
•
•
•
•
•
•
•
•
•
Trading policies
Government changes
Explore the impact of at
Shareholder and their demands
least three of these
Funding,
factors
Governmental leadership
Lobbying
Foreign pressures
Conflicts in the political arena
{What effect do these factors have on your business future? Do
they pose current or future threats to your business?
• What opportunities do you see opening up for your business?
Economic Factor
Economic Factors
Personal income rate
Disposable income
Average household debit
Personal saving rate
Unemployment rate
Inflation rates
Interest rates
Exchange rate(s)
Taxation rate(s)
Government budget
allocation
Gross domestic product
Business savings rate
Example: interest rates are forecast to increase
Opportunities/threats
Socio-Cultural factors
Explore the
impact of at
least three of
these factors
• What is the population’s growth rate and age profile? How is this
likely to change?
• Are generational shifts in attitude likely to affect what you’re doing?
• What are your society’s levels of health, education, and social
mobility? How are these changing, and what impact does this have?
• What employment patterns, job market trends, and attitudes
toward work can you observe? Are these different for different age
groups?
• What social attitudes and social taboos could affect your business?
Have there been recent socio-cultural changes that might affect
this?
• How do religious beliefs and lifestyle choices affect the population?
• Are any other socio-cultural factors likely to drive change for your
business?
Technical Factors
Environmental Factors
Legal
Summary of PEST
Takeaways from PEST
{This is very important, must be a logical inference from your research}
• List any (most important) opportunities than can
be explored and/or threats that must be
mitigated found after PEST was conducted. A
list without analysis is not sufficient.
Industry Analysis: Porter’s five
forces
Purpose of Porters
Forces 1
• Conclusion from effects of force 1 (e.g. high or 5)
– Reasons to validate your conclusion ( provide a list of
concrete facts)
• Based on your assessment above, what decisions would you
make to lower that threat level or to exploit any advantage
you did not consider previously (i.e.Opportunities)
• Role of Information Systems
Forces 2
• Conclusion from effects of force 2 e.g. high or 5
– Reasons to validate your conclusion
• Based on your assessment above, what decisions
would you make to lower that threat level or to
exploit any advantage you did not consider
previously (i.e.Opportunities)
• Role of Information Systems
You need at least one slide for each of
the five forces
Summary of Porters analysis
• Use a table to summarize the forces (all 5
must be included)• Role of Information Systems
Summary of Porters analysis
• Use a table/list to summarize the
Opportunities ( do not confuse threats with opportunities, see examples
below)
–
–
–
–
–
Alliance with suppliers
Increased customer service
Acquisition
Improved products
Grow product offering
(Alternatively one can use next slide as sample)
• Role of IS
Sample table summarizing threats and listing opp.
Analysis of Porter’s analysis
• Which forces pose the greatest threats?
-what threats should the company focus on?
• Where are the company’s greatest
opportunities?
Analysis of Porter’s analysis
• What are the main drivers of competition
within the industry?
– (Innovation , price, technological changes)
• What can you leverage to gain market share?
– how do you see the company being competitive
Motivation for competitive strategy
• Results of PEST (state them- I will cross ref. to earlier
analysis)(Add later)
+
• Results from Porters (state them – I will cross ref. to earlier
analysis)
+
• Basis of competition in Industry
Competitive Strategy(ies) – (opportunities should signal strategies you should explore, threats
you need to monitor or eliminate)
Recommendations
References
External Analysis to analyze the
competitiveness of automotive
industry for FORD
Introduction of company
•
Clear description of company
– Ford is an automotive company that is responsible for the design and manufacture of vehicles.
In America, it is the longest company to be in business since it was founded in 1903 and today
they own brands like Volvo, Aston Martin, Land rover and Lincolns
– The business units in Ford include
•
•
•
•
•
•
•
Ford automotive
Ford customer service
Ford global data and insight analysis
Lincoln Car company
Ford credit
Ford Autonomous vehicle LLC
Is the subject of this analysis a specific business unit? If so state
– The subject of this research is automobiles, especially in the EV sector where most companies
are investing heavily with ford committing over $350 million into a new EV plant.
•
Scope
– The scope of this research focuses on the FORD automotive division that is responsible for the
design and manufacture of automobiles
•
What industry is this business(unit) competing within
– FORD is competing in the automotive sector especially in the upsurge of building electric cars
Industry
Trends of EV industry
FORD AUTONOMOUS
JOURNEY
•
•
•
•
•
The EV industry has evolved over the years with big
players like Tesla and KIA leading in the manufacture
and sale of the automobiles
The industry is a free market compared the oligopoly of
the older automotive industry with major players and
other companies just barely making the market share
The scope of this analysis is focused on FORD
autonomous vehicles and how they are competing in the
global sphere
For FORD, at this stage the company is growing trying
to explore its market share using the current customer
and reputation base.
The stock market is a good indicator of how some of
these companies are doing and they show growth and
future potential with FORD having positive reviews.
Industry
Main competitors
– The main competitors in thee
America market for EV is
Tesla.
– They have a majority market
share since they are able to
have a more comprehensive
strategy for sales and taking
over
– Tesla and GM have a larger
market share with Ford
following especially after the
launch of some of their
popular models like the
Mustang Mach-E
Background of Company
• Founded in 1903 by Henry Ford
• Enables automobiles to be accessible and
affordable to the public
• A key player in the EV industry after Tesla and
General Motors
• An EV industry player for a long time until the
unleashing of Ford Focus Electric in 2011.
• Mustang Mach-E is the revolutionary addition to
the EV catalogue that catapulted Ford into the
mainstream international market for the
company’s products
Mission statement of company
‘’to make people’s lives better by making
mobility accessible and affordable.’’
This corporate mission focuses on moving
people, which is a basic function expected in
automobiles and the transportation sector.
Industry Analysis: Porter’s five
forces
Purpose of Porters
• Porters analysis looks at various facets of the
market and analyzes the winning strategies
• For EV industry, the market is supposed to
show a more realistic outcome when the
players and variables align.
• From the competition in the industry, the
potential new entrants, power of suppliers,
power of consumers and threat of substitute
products
Threat of Substitute products
Moderate
• Substitute products often interfere with the general acceptance on the market
–
–
•
Based on your assessment above, what decisions would you make to lower that threat level or to exploit any advantage you
did not consider previously (i.e.Opportunities)
–
–
–
•
If the prices for EV products are higher then customers switch to more affordable options
Direct dealing with customers is always preferred in the consumerism society where reviews are crucial
An opportunity for Ford would be to develop a model like Tesla where direct consumer interaction is possible
Also, having the right measures of the market help to show a more realistic view of what the market can be
using strategy.
Buying off the competition which makes it easier to sell their products in the long run.
Role of Information Systems
–
–
–
Information systems are crucial since they inform the company of their abilities within the market.
Ford is able to analyze the market using the available information and use it to improve on their services and
also have the right strategy for growth
Promoting products that can substitute the ones already in the market is a good move to stay ahead of the
competition and still maintain market share.
Power of Suppliers
• Moderate
– The suppliers have some power since they supply parts critical for the overall
manufacture of EV automobiles
• Based on your assessment above, what decisions would you make to lower
that threat level or to exploit any advantage you did not consider
previously (i.e.Opportunities)
– Ford has the purchasing power that the suppliers require hence this can mitigate
any supply chain disruption issues
• Role of Information Systems
– Information systems in this case are crucial for the supply chain viability.
– If the supply chain is autonomous then it can be easier to track and ensure that
the products required are always available for the company to use
Power of Consumers
•
High
– High bargaining power in the EV market
– Many options since they can choose from over 10 companies with competitive and friendly
prices
– Price sensitivity and government regulations also play a role in the consumption of these
products.
•
Based on your assessment above, what decisions would you make to lower that
threat level or to exploit any advantage you did not consider previously
(i.e.Opportunities)
– Ford should offer a more competitive pricing mechanism that accommodates its core customers
– The prices are also supposed to meet the demand of the consumers in the market
•
Role of Information Systems
– Information systems are supposed to show how pricing can help a company gain competitive
advantage.
– Having the right provisions often helps to show a more compelling outcome when it comes to
pricing
Competition in the Industry
• High
– Competition is intense in the EV market
– The innovation is consistent hence a need to have constant monitoring of the
processes for the long-term
• Based on your assessment above, what decisions would you make to lower
that threat level or to exploit any advantage you did not consider
previously (i.e.Opportunities)
– Product differentiation
– Brand strength
– Product quality
• Role of Information Systems
– Ensuring that the systems are up to date
– Provision of the right processes for the long term
– Enabling a more accommodative environment for the long view of the product
to succeed in the ever changing market dynamics
Summary of Porters analysis
Porters Force
Fords Recommendation
Threats of New entrants
Low since the capital intensive nature
prevents other smaller firms
Ensuring the maintenance of a high
competitive environment to help with the
general outlook of the business
Power of Buyers
Providing buyers with the right prices and
products to retain their loyalty
Power of Suppliers
Providing the purchase incentives like
long term contracts for favourable terms to
ensure constant supply of products
Competition Rivalry
With the numerous competition in the
vicinity, Ford can differentiate their
product portfolio, ensure there is
consistent outcomes and also product
quality be maintained.
Threats of substitutes
Ford can use their leverage of a loyal
customer base to continuously innovate to
keep the customers happy
Fords options for Porters Analysis
Analysis of Porter’s analysis
• Which forces pose the greatest threats?
– the company should focus on the competitive bargain of buyers
– Competitive rivalry
• Where are the company’s greatest
opportunities?
–
–
–
–
–
Expansion of the EV portfolio
Commercial electric vehicles
Sustainable mobility options
Global expansion
Battery technology advancements
Analysis of Porter’s analysis
• What are the main drivers of competition within
the industry?
– (Innovation , price, technological changes, brand
reputation, consumer preferences, safety and quality,
global expansion and supply chain effeciency)
• What can you leverage to gain market share?
– how do you see the company being competitive
• Global expansion
• Collaborations and alliances
• Investment in battery technology
• Diversification of electric vehicle portfolio
• Electrification of fleets
Motivation for competitive strategy
•
•
•
•
•
Results of PEST
Political factors like government regulations
Economic factors like cost of production
Sociocultural factors like environmental concerns
Technological factors like battery technologies
+
•
Results from Porters
•
•
•
•
•
•
Threats of New entrants
Power of buyers
Power of suppliers
Competition rivalry
Threats of substitutes
Basis of competition in Industry
• Innovation
• Differentiation
• Product range
• sustainability
Competitive Strategy(ies) – (opportunities should signal strategies you should explore, threats you need to monitor or eliminate)
Recommendations
• Focusing on cost reduction
• Expanding their EV portfolio
• Brand promotion
• Commercial electrical vehicles
• Continuous innovation
• Government engagement
References
•
•
•
•
•
•
•
•
•
•
Ferrigno, G., Zordan, A., & Di Minin, A. (2022). The emergence of dominant design in the early automotive
industry: an historical analysis of Ford’s technological experimentation from 1896 to 1906. Technology Analysis &
Strategic Management, 1–12. https://doi.org/10.1080/09537325.2022.2074386
Figueira, J. A. C. (2022). Equity valuation of Ford Motor Company. Repositorio.iscte-Iul.pt.
https://repositorio.iscte-iul.pt/handle/10071/26966
Ford. (2021, May 19). The Ford Electric Vehicle Strategy: What You Need to Know | Ford Media Center.
Media.ford.com. https://media.ford.com/content/fordmedia/fna/us/en/news/2021/05/19/the-ford-electric-vehiclestrategy–what-you-need-to-know.html
Katiyar, A. A. (2021). Equity research report on Ford motor company : looking for a ´charger´. Run.unl.pt.
https://run.unl.pt/handle/10362/122855
Kooverjee, N. (n.d.). MSN. Www.msn.com. Retrieved October 7, 2023, from https://www.msn.com/enus/autos/news/the-secrets-behind-fords-electric-vehicles/ar-AA1hGtyh
Livengood, C., LeBlanc, B., & Mauger , C. (2023, September 26). Ford “pausing” construction of Marshall EV
battery plant. The Detroit News. https://www.detroitnews.com/story/business/autos/ford/2023/09/25/ford-motorcompany-electric-vehicle-battery-plant-marshall-pausing/70963467007/
Parrish, K., & Stephanie Watts Butler. (2023). Consumer EV Standards and Voltage Trends [Industry Pulse]. IEEE
Power Electronics Magazine, 10(3), 68–72. https://doi.org/10.1109/mpel.2023.3301284
Scott, G. (2023, June 19). Porter’s 5 Forces Explained and How to Use the Model. Investopedia.
https://www.investopedia.com/terms/p/porter.asp
US auto workers halt strike expansion after concessions on EV battery plant. (2023, October 6).
Www.aljazeera.com. https://www.aljazeera.com/news/2023/10/6/us-auto-workers-halt-strike-expansion-afterconcessions-on-ev-battery-plant
Ziady, H. (2023, September 29). The world needs cheap electric cars. That spells trouble for big carmakers | CNN
Business. CNN. https://edition.cnn.com/2023/09/29/cars/evs-global-automakers/index.html
Title: “Influential Factors on the Global Smartphone Market: Politics and Economics”
Summary: This discussion examines the impact of political and economic factors on the global
smartphone market using the PESTEL framework, which includes Political, Economic, Social,
Technological, Environmental, and Legal factors.
Introduction:
This discussion focuses on the impact of political and economic factors on the global smartphone
market. It examines how the PESTEL framework shapes the industry, highlighting the
significance of regulations, policies, and political stability of nations. For instance, trade
tensions, such as those experienced during the U.S.-China trade disputes, can disrupt the supply
chain. Economic conditions and consumer financial capacity also play a critical role, with a
robust economy boosting consumer spending and economic downturns reducing demand, as seen
during the 2008 global recession. The rise of digital natives and evolving consumer preferences
have been instrumental in expanding the smartphone market, driven by trends such as privacy
and security concerns. In addition, staying competitive in the market requires continuous
technological advancements, such as 5G adoption and innovative features. Environmental
concerns have also driven sustainability efforts, such as companies reducing their carbon
footprint and utilizing eco-friendly materials. A notable example of this is Apple’s commitment
to using recycled materials. Legal matters, such as intellectual property rights and product safety
standards, also significantly impact the market, exemplified by legal battles between Apple and
Samsung over patent infringement.
Insights:
Political Elements: The nation’s policies, regulations, and political stability significantly shape
the smartphone market. Trade tensions and sanctions can disrupt supply chains, impacting
market growth. This was seen during the US-China trade disputes.
Economic Factors: Economic conditions, exchange rates, and consumer financial capacity
significantly impact the smartphone industry. A robust economy usually stimulates consumer
spending, while economic downturns reduce demand, as evidenced during the 2008 global
recession.
Social Influences: Evolving consumer preferences and demographics are important. Digital
natives’ affinity for mobile devices increased the smartphone market. Privacy and security
concerns influenced smartphone designs.
Technological Advancements: The smartphone industry is constantly innovating with new
technology such as 5G and foldable screens. Staying current is essential for maintaining market
share.
Environmental Aspects: Growing environmental awareness has led to smartphone
manufacturers adopting eco-friendly practices, reducing their carbon footprint, and utilizing
sustainable materials. Apple’s dedication to sustainability and recycled materials serves as a
prime example.
Legal Factors: Legal matters, such as intellectual property and product safety, impact the
smartphone industry. Companies must navigate these intricacies, as seen in the ongoing patent
disputes between Apple and Samsung.
Links:
https://www.mdpi.com/2079-9292/12/1/197
https://elearning.scranton.edu/resources/article/how-the-smartphone-has-impacted-economicdevelopment/
https://business.com.tm/post/10096/factors-that-potentially-affect-smartphone-market
Purchase answer to see full
attachment
