Free Essay

Pestel Analysis

In: Business and Management

Submitted By lex99910
Words 2746
Pages 11
PESTEL Analysis
Political Factors:
Political factors greatly affect the automotive industry. President Obama has recently announced new efforts to further fuel efficiency standards for medium and heavy duty trucks. This category ranges from large pickup trucks and school buses to the massive 18 –wheeler tractors. The new standard is expected to increase fuel efficiency between 9% and 23% with the largest trucks receiving the largest reductions (23%). This standard will be applied to 2014 – 2018 models and estimates $50 billion in savings for truck users in fuel over the lifetime of the vehicle. The new greenhouse gas standards will become final by March 2016 (Eilperin, 2014). Another long term plan was introduced by the White House states agreements were made between the president and 13 automakers to increase fuel efficiency to 54.5 miles per gallon for cars and light trucks. This plan is expected to be fulfilled by year 2025. A list of the automakers is as follows, Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota, and Volvo. Combined these companies account for 90% of vehicles sold in US. Achievement of both plans (most formerly mentioned) estimates that consumers will save $1.7 trillion at the pump or $8K per vehicle. Disposable income, and in turn, economic growth is expected to increase and create quality domestic jobs within cutting edge industries across the country. Additionally, these standards also reduce carbon pollution, more than 6 billion metric tons of greenhouse gas over the course of the program – more than the amount of carbon dioxide emitted by US last year. The benefits of Obama’s plan also include oil, consumer, economical and environmental savings and improvements (Office of the Press Secretary, 2011). Government also offers incentives for electric vehicle and plug in hybrid vehicles. This credit is up to $7500 dependent on the capacity of the battery used to fuel the vehicle (Fuel Economy Gov). In addition to the nationwide plans, many other politicians are introducing a variety of bills to change the climate in their states or countries. The state of California, for example, is a major player in the automotive industry. In fact, California’s auto emissions standards are considered stricter than the federal guidelines in place as they began passing regulations for cleaner cars in the 1960s to help ease the developing problems caused by the world’s worst smog. Currently 14 other states have adopted California’s smog emissions standards as their own including Massachusetts and New York (Fox News, 2012).

Economic conditions: The growth of Asia as an automotive marketplace has helped grow the global car sales altogether significantly while Europe is turning away from cars altogether as described in the annual report by OICA and with low incomes fuel efficiency is key driving the compact and hybrid segments. In the US, fuel prices fell during the second half of 2008 because of the US financial crisis which sent financial shockwaves throughout the global economy. The automotive Industry’s revenues fell about 15.4% in 2009, however, as economic conditions began to improve and the disposable income increased in 2010, industry revenues increased significantly to 20.5%. It is estimated that built up demand will help with industry revenue growth currently at 2.1% for 2013 bringing overall revenue of this industry monster to an estimated $2.3 trillion. IBIS World experts expect industry revenue to continue growing at an annualized rate of 2.2% over the five years to 2013. Though the growth remains strong, the diminishing American middle class indicates that only half of American households are middle-income, down from 61 percent in the 1970s and in turn is likely to increase sales in fuel efficient vehicles as families look for any and all ways to save, including and especially fuel costs which have more than tripled since the 1990s as stated in the 2012 Pew Research Center report . Rising incomes and, in turn, automotive demand in the BRIC countries (Brazil, Russia, India and China) which supported production over the last five years affect the industry as well as the global sales further supporting industry growth, as well as sales of Fuel Efficient, Hybrid and Electric Cars.

Sociocultural Factors: The Prius phenomenon can be seen everywhere. The buyers range in age from college students concerned about the environment to technology driven individuals. Nissan leaf is a new fully electric entrant and based on surveys of buyers who pre-ordered this model indicates they are an educated and tech-savvy group. In fact, the average Leaf buyer is: o in the age of 40’s o owns a home and garage o makes about $125,000 annually o is college-educated o already owns a fuel-efficient vehicle such as the Toyota Prius
Surveys by the University of Michigan and Pike Research found that the more educated a person, the more likely he or she is to be interested in purchasing an eco friendly vehicle. As well those with higher income are more likely to purchase a PEV (Thorstensen, Libby, 2013).

Technological Factors:

Self driving cars are the future. Tesla claims they will have the first self driving car you can buy within three years. Google is close with 5 years. Accident prevention systems are available on Volvos, Mercedes and BMW offer traffic jam assist according to the same 2013 POLK Report. Smart navigation systems help drivers avoid traffic. When it comes to alternative fuel technologies that are being explored they include fuel cell technology, hydrogen-powered vehicles, ethanol vehicles and plug-in hybrid electric vehicles. The success of these technologies depends on future fuel prices, economy, government policies concerning greenhouse gas emissions. Growth in low-emission vehicles largely depends on how quickly consumers are willing to move away from traditional combustion engines. The development of flexible-fuel vehicles, which can run on two different types of fuel, is forecast to slow over the next five years, particularly as flexible fuels (e.g. E85, a mixture of ethanol and gasoline) prove uneconomical and rely highly on subsidies. Automakers that were too late to jump on the clean vehicle bandwagon have been trying to get ahead by investing into electric car technology. IBIS World expects that major car manufacturers will continue to launch electric cars over the next five years.

Several advantages of electric vehicles in comparison to gas powered vehicles are how energy efficient they are as PEVs convert 59-62% of the electrical energy from the grid to provide power at the wheels whereas gasoline vehicles convert about 17-21% of the stored energy. In addition 60% of gas vehicles contribute to 1/3 of the nation’s greenhouse gas emissions. Electric vehicles significantly reduce carbon emissions in turn assisting in utilizing renewable energy. They tremendously cut down noise pollution and reduce the use of oil, transmission fluid and other fluids hazardous to the environment. Electricity from nuclear, hydro, solar, or wind powered plants do not even create air pollutants. Therefore PEVs produce no tailpipe pollutants making this group of vehicle very environmentally friendly (Fuel Economy Gov).

Environmental Forces: It is no secret that California and other highly populated regions around the country have been suffering from Smog and vehicle related issues. Its Zero Emissions have long been the standard for the World, though few less developed countries have put in place controls to reduce their emissions. In the next five years nearly all global manufacturers will be involved in research and development to create fuel-efficient and environmentally friendly vehicles. As well in the next five years, consumers will likely be more willing to adapt to new fuel-saving and clean technology, due to increased environmental awareness. However, overall profit is forecast to decrease slightly by 2018, as increasing fuel-efficiencies spur more investment into R&D. During a time when global light vehicle sales fell 4 percent, one segment of the market experienced considerable growth. Worldwide sales of gas-electric hybrid vehicles grew 44.3 percent from 2008 to 2009, when almost 740,000 hybrid cars and trucks were sold. Despite the popularity of hybrids in certain areas of the world and the media hype these “green” vehicles generate, they comprise just 1.3 percent of global light vehicle sales. According to Polk View.

Legal/Regulatory Factors: In the US the EPA emissions standards and the gas guzzler tax are driving the growth of the Fuel Efficient, Hybrid and Electric Car industries. California is the strictest state and the Bar setter for the highest requirements for fuel efficient vehicles. Globally the Automotive industry is changing with sales actually declining in Europe while they are growing in Asia and Americas. As mentioned above, the IRS allows a tax credit for qualified battery-electric vehicles of up to $7500, depending on the vehicle type. A similar credit is available for two or three-wheeled and low-speed electric vehicles. One can claim the credit by completing IRS Form 8834 and attaching it to the Form 1040. However, the State of Oregon no longer allows tax credits for alternative fueled vehicles but does offer a tax credit for charging equipment.

5 Competitive Forces Analysis 1. Competition from rival sellers: Top sellers have a battle on their hands. Honda is falling off. Toyota is holding strong, even after its deadly gas pedal issues, as is Ford. Audi taken a large chunk of the luxury segment taking significant market share from Mercedes and BMW over the last 10 years. GM is making a comeback, but the real star here is Hyundai. Breaking records and gaining large shares of the market the Korean automaker has given a lot of brands a run for their money and it also offers Hybrid Models competing with the likes of Toyota and Ford as well as a luxury line that has taken clients away from Lexus, Mercedes, Infiniti, BMW, Audi and Acura, the typical luxury lineup (Webb, 2012).

2. Competition from threat of new entrants: Fiat is a new entrant that appears to have captured the young and retiree market. MINI is going strong. Porsche Panamera is making a dent in the luxury sedan market and Ford continues to grow its lineup and has done very well with its compact sedans and SUVs. Since its inception the Toyota Prius is the undisputed leader in the Hybrid market but Ford has recently introduced the Ford Max which is quickly gaining momentum taking some of the market share from Toyota with better gas mileage and a more aesthetically pleasing design (Halliday, 2012).

3. Competitive pressures from sellers of substitute products: The biggest surprise and possibly a sign of things to come is Tesla. Its sporty luxury sedan, the Model S has actually outsold the market’s benchmark luxury sedans Mercedes S-Class, BMW 6 and 7 series, Lexus LS and the Porsche Panamera (Tesla sales through Q3 of 2013). It is an amazing feat for this Electric Newcomer. Tesla is turning the automotive world upside down. Now several automakers that specialize in large luxury sedans Mercedes, Audi and BMW have a new leader, not just a competitor named Tesla (Evanson, 2014).

4. Competitive supplier bargaining power: Right now the suppliers of batteries are in high demand. So are ones that supply the latest technology. Several technology features are becoming more and more commonplace increasing the bargaining power of the suppliers. Suppliers that manufacture back up cameras and safety sensors for parking and accident avoidance systems are going to be in increasingly high demand as these features continue to be in higher demand and become more common place in vehicles. The same goes for suppliers of airbags. Ceramic braking systems are also catching on and GPS systems are more common place than ever.

5. Competitive buyer bargaining power: When the industry was falling in 2008 automakers had to offer very aggressive payment terms, incentives, and even the government stepped in with tax credits (cash for clunkers) and other incentives to drive sales. The industry is extremely competitive with many entrants in each category. Buyers have a lot of choices and brand, image, quality and long term value play a huge role. Subaru has maintained a loyal following. Toyota has a long standing reputation for value and uses it to its advantage. While BMW is more expensive than Mercedes and Audi in almost every segment, they offer buyers free maintenance, including brake pad changes, fluid changes and all other maintenance short of replacing tires for the first 50,000 miles. BMW ends up looking like a bargain (BMW USA). Tesla offers free fuel up station to charge their cars along many routes and pride themselves on their “No Service Needed” drive system (Tesla). Automakers have to be very creative and ones that are capture the hearts of the customers are take away their bargaining power by becoming the clear choice in a particular segment.

Summary Sporty compacts, hybrids & electric, electric & luxury electric cars are becoming more common at higher rates than ever before. The power of electric motors, the quiet delivery of torque, the flat toque curve that cannot be matched by gasoline engines and their unmatched efficiency make competing with them almost impossible. As the prices of these vehicles become more affordable there is no doubt they are going to win the hearts of young, old, and car enthusiasts alike. Tesla received more awards than any new vehicle ever. BMW is about to launch the i8, a breathtaking hybrid car with an electric motor assisted by a small three cylinder With its completely unique drive concept, it reinvents the idea of a sports car. The very powerful plug-in hybrid system is combined with a BMW TwinPower Turbo 1.5-litre, 3-cylinder petrol engine and brings together the benefits of an electric motor and a gas engine to produce an amazing driving experience and performance. As amazing as the BMW may be Tesla, Leaf, Volt and other Electrics offer a completely electric experience and the Battery electric vehicles also benefit from not having a typical transmission or combustion engine — eliminating oil changes, fuel filters, emissions testing and other costly maintenance. A simplified drive train and braking system means greater reliability and fewer potential repairs, too. It is very clear that the future of the Industry is with hybrids & electrics and it is coming faster than anyone expected.

Work Cited 1. IBIS World (2009-2014), Global Car & Automobile Manufacturing, Industry Outlook, Web, 4 April, 2014. http://0clients1.ibisworld.com.helin.uri.edu/reports/gl/industry/industryoutlook.aspx?indid=1000 2. Thornstensen L. & Libby T. (2013). International Economic Development Council IEDC, Analysis of the Electric Vehicle Industry, Web, 3 April, 2014. http://www.iedconline.org/clientuploads/Downloads/edrp/IEDC_Electric_Vehicle_Industry.pdf 3. Eilperin, J. (2014). Washington Post, Obama to Tighten Fuel Efficiency Standards for Big Trucks, February 14, 2014, Web, 3 April 2014. http://www.washingtonpost.com/blogs/post-politics/wp/2014/02/18/obama-to-tighten-fuel-efficiency-standards-for-big-trucks/ 4. Office of the Press Secretary. (2011). White House Gov, July 29, 2011, Web, 3 April, 2014. http://www.whitehouse.gov/the-press-office/2011/07/29/president-obama-announces-historic-545-mpg-fuel-efficiency-standard 5. Fuel Economy Gov. (2014). Federal Tax Credits for Electric Vehicles Purchased in or after 2010, April 7, 2014, Web, 4 April, 2014. http://www.fueleconomy.gov/feg/taxevb.shtml 6. Associated Press. (2012). California Passes Sweeping Auto Emissions Standards, January 28, 2012, Web, 5 April, 2014. http://www.foxnews.com/politics/2012/01/28/california-passes-sweeping-auto-emission-standards/ 7. Webb, A. (2012). Business Week, Audi Threatens BMWs 7 Year Lead in Car Sales, September 10, 2012, Web, 5 April, 2014. http://www.businessweek.com/news/2012-09-10/audi-trims-bmw-s-2012-global-luxury-lead-to-2-110-autos 8. Halliday, J. (2012). Forbes, Ford’s C-Max Hybrid Challenges Market Leader, October 10, 2012, Web, 6 April, 2014. http://www.forbes.com/sites/jeanhalliday/2012/10/04/fords-c-max-hybrid-challenges-market-leader/ 9. http://www.cnbc.com/id/44481705/page/11 10. Evanson, J. (2014), Tesla Motors Investors Presentation, January 2014, Web, 6 April, 2014. http://files.shareholder.com/downloads/ABEA-4CW8X0/3072342947x0x720221/5647bed2-1c27-4b40-abd3-dd11f8bc474e/Investor%20Presentation%20-%20Jan%202014.pdf

11. (2010) Industry Report, PV/201003-Issue 019. Asia Hybrids, March 2012, Web, 4 April, 2014. file:///C:/Users/lex9910/Downloads/PV-201003-Issue019-AsiaHybrids.pdf

12. (2014) Industry Report, 2013 Industry Production Statistics, Web 6 April, 2014. http://www.oica.net/category/production-statistics/

Similar Documents

Premium Essay

Pestel Analysis

...You have to do a SWOT and PESTLE analysis of the company given to you. * Please use the latest data from company website, annual reports, industry reports, news articles, etc. * The data points/facts mentioned should be latest - not older than Jan 2013. * 2 samples have been provided for reference of format, data presentation and kind of research expected. Please do not copy anything from the samples. * The sources need to be authentic and valid: * Wikipedia is not an authentic source * Anonymous Blogs/Academic sites/Student essays published online are not considered good sources. Avoid them. * You must have references for all your facts and data with proper intext. * Do not copy from existing SWOT /PESTLE analysis found on web. Please do your own research and analysis * Each data point/fact should properly referenced with the exact source. For e.g. If you say The net profit margin increased from 15.2% in FY14, the source of the information needs to be mentioned with a footnote inserted mentioning the webpage/pdf/source link. It will be checked. * Plagiarism should be strictly avoided * Try to use infograms/bullet points/smart art to highlight gists and summaries. They lend more readability to any article and are a great tool for quick surfing or browsing. * You will get a lot of useful and current information by analysing the annual reports of the organization under concern. Most of them are freely......

Words: 784 - Pages: 4

Premium Essay

Tesco Pestel Analysis

...http://123articlesworld.blogspot.co.uk/2012/04/pestle-analysis-of-tesco.html Friday, 13 April 2012 PESTLE analysis of Tesco Political factors - Now Tesco is operating business in 14 courtiers all over the world, so its performance may be influenced by the local legislative and political conditions. Employment laws specified by local government must be followed in order to avoid legal hurdles. Most of the governments encourage the organizations to provide employment for local candidates so that local people can be benefited more. All kinds of jobs like low-paid, highly flexible, more skilled, highly-paid and local based jobs are available in stores like Tesco. Tesco employed different categories of people like students, elderly workers and disabled people for low labor rates. Tesco followed the employment legislation and other laws properly in every country where it has stores.  Economical Factors - Demand for a product in market, price of the product and profits of an organization depends on the economic factors like interest, inflation rates and local unemployment levels. Organizations cannot have control on these economic factors, but it can show adverse effect on organization performance. Tesco is still completely depending on UK market even though it has stores in different countries, which mean if UK market collapsed or affected by any economic factors, Tesco will be in greater amount of risks. Social Factors- Demographic changes and change in customer......

Words: 498 - Pages: 2

Free Essay

Pestel Analysis Royal Enfield

.... PESTLE analysis of the motor bikes industry in UK PESTLE analysis{Palmer Clive }of motorbike industry sector investigates the important factors that are affecting the industry and influencing the companies operating in that sector. It is also perfect tools for mangers and policy makers of motorbike industry,helping them to analyzing the factors which are affecting while driving their industry to different countries of the world. Throughout the last few year,the acronym PESTLE has been suffering a numbers of changes,but it seem to be the most important factor which is helpful for decision-makers of royal-Enfield to analysis the current situation of the that country where industry expands.There are six factors which are influencing PESTLE analysis. Political factors include areas such as taxation policy, law labor of law,transportation problems and stable political environment. Furthermore, governments have great influence proposal that limit number of motorcycles being sold in the country because Indian currency changes everyday with the comparison of UK pounds.The changes of currency means the changes of price of products and demand of product like royal Enfield are also changes which means recession are enter into the market so UK government take some steps to solved the this problem.Royal Enfield sales would affect by this issue.Furthermore UK consumers pay higher pre-tax prices for Motorbikes than anyone else in the Europe.Government is keen to attract foreign......

Words: 619 - Pages: 3

Premium Essay

Pestel Analysis

...factors are usually classified into two groups (Bourgeois, 1980) i.e. ‘‘general’’ and ‘‘task’’ external business environmental factors. • Micro Environment (General External Business Environment ) The Micro environment is a relatively remote environment and the elements that compose it have an indirect influence on the organization. This environment is typically composed of factors such as social values, educational, political, economic, legal, behavioral, demographic, natural environment, natural resources, and technological (Asheghian & Ebrahimi, 1990; Grant, 1999). A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis. PESTEL ANALYSIS of Australia stands for: Political : The political atmostphere of Australia is stable and the country enjoys a democratic structure based on English common law. Capitalist venture are welcome and encouraged.the queensland area is a major hub of development,and the government is involved in ensuring that safty and growth of its people and environment are protected and supported. The area of gold coast is particularly fabled,as it features surfing,nightlife,fine dining, and access to natural areas of the surround region (gold coast city council,2011)Any business venture in this region would......

Words: 844 - Pages: 4

Premium Essay

Pestel Analysis of Pharmaceutical Industry

...A SWOT analysis identifies and assesses the strengths, weaknesses, opportunities and threats an organization faces. A SWOT analysis of the pharmaceutical industry illustrates to upper management what the industry is excelling in, what improvements need to be made, where growth is possible and what preemptive measures need to be taken to protect shareholder or company value. Strengths • The strengths of the pharmaceutical industry’s SWOT analysis document the internal industry components that are providing value, quality goods and services and overall excellence. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s strengths could include low operating overhead, firm fiscal management, low staff turnover, high return on investment (ROI), state-of-the-art laboratory equipment and an experienced research staff. Weaknesses • The weaknesses of the pharmaceutical industry’s SWOT analysis document the internal industry components that are not providing significant added value or are in need of improvement. The internal industry components can include physical resources, human capital or features the industry can control. For example, the pharmaceutical industry’s weaknesses could include high-risk business modeling, disengaged Board of Directors, dated medical equipment, poor branding, low staff morale or diseconomies of scale. • Sponsored Links o viral clearance......

Words: 393 - Pages: 2

Premium Essay

Pestel Analysis

...These factors are usually classified into two groups (Bourgeois, 1980) i.e. ‘‘general’’ and ‘‘task’’ external business environmental factors. • Micro Environment (General External Business Environment ) The Micro environment is a relatively remote environment and the elements that compose it have an indirect influence on the organization. This environment is typically composed of factors such as social values, educational, political, economic, legal, behavioral, demographic, natural environment, natural resources, and technological (Asheghian & Ebrahimi, 1990; Grant, 1999). A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis. PESTEL ANALYSIS of Australia stands for: Political : The political atmostphere of Australia is stable and the country enjoys a democratic structure based on English common law. Capitalist venture are welcome and encouraged.the queensland area is a major hub of development,and the government is involved in ensuring that safty and growth of its people and environment are protected and supported. The area of gold coast is particularly fabled,as it features surfing,nightlife,fine dining, and access to natural areas of the surround region (gold coast city council,2011)Any business venture in this region......

Words: 849 - Pages: 4

Premium Essay

Pestel Analysis

...PESTEL analysis 2.1 Political McDonald industry deal with different kinds of political problems as they have outlets over 119 countries. Certain location the company deals with problems like overwriting rules and regulations due to health implications of fast food. Political situations in Singapore are not problematic for McDonald as it requires to monitor the rules and regulations which is handling fine. In general, McDonalds are affected due to regulations of fast food industries set by the government policy for example health consciousness and cleanliness policy. Health problem have been a main concern for most people. people are having diseases such as high cholesterol because they are consuming too much oily food and not doing any cardio activities. They are also facing a backlash from parents as a result of the rising in obesity and eating habits. The restaurants are bringing in healthier choices to cater to customer’s needs. For example, McDonald’s recently brought in grilled chicken wraps and Salad Chicken McGrill which are a better and cleaner choice compared to the rest of the items available. 2.2 Economic Singapore has a rising turnover for Food and beverage sector estimated to be S3.6 billion annually. Even though a small part which only contributes about 1% to GDP; it is a important aspect to the tourism industry. According to a latest survey done by Sydney-based Research Company, BIS shrapnel, an average Singaporean paid about $1900 eating out. Eating out......

Words: 1590 - Pages: 7

Premium Essay

Pestel Analysis

...The PESTEL analysis needs to help in determining the external environment prevalent in the geographical area. This reveals about the political scenario prevalent and the policies, regulations and motive that it has to promote the particular type of business and organization. The economic factors determine whether the area will be able to sustain the product and will portray the usefulness of the strategy in this regard. The social factors are also important factors in evaluating suitability of the strategy. Technological and environmental factors also require to be estimated while determining suitability of the strategies. It portrays that whether the environment of the geographic area is able to support the policies and strategies taken by the firm. In...

Words: 1440 - Pages: 6

Free Essay

Pestel Analysis

...Pestel Analysis PESTEL ANALYSIS: A REPORT ON UNILEVER INTRODUCTION TO THE COMPANY The Fast Moving Consumer Goods (FMCG) environment is rapidly changing. Especially, the increasing popularity of line extensions seems to depend on advantages inherent in brand leveraging. FMCG manufacturers go into R&D in order to come up with the product that best satisfy consumers because customers become more critical about attaching themselves to a particular brand. They will also like to buy less expensive product due to current economic tide. Unilever is one of the biggest Fast Moving Consumer Good (FMCG) companies in the world. I have always been inquisitive about Unilever’s operations because I use some of its products, even right from childhood. This together with the current environmental challenges being faced by FMCG manufacturers motivated me to find out about Unilever’s operations and the current challenges it faces in the volatile business environment. Unilever was founded in 1930 through merger by the British, Lever Brother; and the Dutch, Margarine Unie; now Unilever PLC in London, U.K and Unilever N.V in Rotterdam, Netherlands respectively. In 1872 before the merger, Jurgens and Van den Bergh, the Dutch, built factory in Netherlands for the production of Margarine made from milk and fact. In 1927, they formed Margarine Unie (margarine Union) together with two European Businesses, Centre and Schicht. Lever & Co on the other hand was founded in 1884 by British William......

Words: 317 - Pages: 2

Premium Essay

Pestel Analysis

...1. Conduct a PESTEL analysis of China 1.1 Political Analysis China is well-known as one of only five communist nations left in the world, which determined its socialistic ideology and government are different from most countries all over the world. As claimed, china is an investment-welcomed nation since joined WTO in 2001. Leaders of China are also trying to build an open and comfortable environment to foreign investment. The influx of Foreign Direct Investment in China is increasing steady from 2007 and China has been the second largest nation of accepting FDI. (see Exhibit below) Wine has always been seen as a luxurious good in domestic market, so wine importation got a strict duty policy as duty of 14%, add-value tax of 17% and consumption tax of 10%. However, as more and more competition in international trade market, New Zealand has got zero-duty privilege in wine importation industry from China government, followed by Chile and Australia, who will get zero-duty privilege in 2015 and 2019 respectively. Although Chinese politics is stable relatively, there still are some issues like crime and corruption. In 2013, Xi Jinping took power from Hu Jingtao as present president of China and paid more attention to those issues in period of social transition. 1.2 Economic Analysis China’s economy had seen a rapid growth in these years, which was benefit from decreasing intervention and increasing market oriented. The first 20 years in 21 century are very......

Words: 530 - Pages: 3

Free Essay

Pestel Analysis

...To: Harold Bashor From: Swarna Sub: PESTEL Analysis on Auto Mobile Industry Date: 04/06/2014 Business Brief The auto industry is a leading driver of global economic growth; the industry is a leading employer throughout the world, with 9 million people involved in making 60 million vehicles, or 5% of global manufacturing jobs. Indirect employment from automotive activity is fivefold, representing 50 million jobs connected indirectly to the auto industry. Other industries involved in the manufacture and service of vehicles include textiles, plastics, iron, steel, glass, aluminum, computer chips and rubber. The industry also involves significant research and development activity, representing investment of nearly $85 billion. It is estimated that the manufacture of vehicles contributes more than $430 billion to the governments of 26 countries combined. Automobile are primarily used to transportation and changed the world during 20th century particular in developed nations like USA and other developing nations like India, China markets. The automobile industry has succeeded like never before in the recent years but also seen major setback in global recession. This extraordinary growth that the automobile industry has witnessed is a result of a three major factors namely, increased average income of a per person, life style and innovation. Moreover in countries like India the liberalization steps, such as, relaxation of the foreign exchange and equity regulation,......

Words: 1981 - Pages: 8

Free Essay

Pestel Analysis

...PESTLE Analysis for MARKS and SPENCER Introduction Marks & Spencer is a British retailer with over 800 stores in more than 30 countries around the world. It is the largest clothing retailer in the UK, as well as being a food retailer. Most of it’s domestic stores sell both clothing & food, and since the year 2000 Marks & Spencer have started to expand into other ranges such as home wares, furniture & technology. Marks & Spencer became the first British retailer to make a pre-tax profit of over £1 billion “BBC News online 1998” Though a few years later Marks & Spencer were hit by the “credit crunch” which has had a dramatic effect on the company as they struggle in the current economical climate. Political Factors The government sets regulations for companies to abide by such as Health & Safety British Standards such as, planning for hazard identification, risk assessment and risk control. If companies do not abide by these regulations they will be fined or even in some cases be forced to close down. Marks & Spencer did not abide by the British Standards as they were charged for neglecting health & safety regulations after a door fell on an employee. George Blair was allegedly injured after a warehouse door in their store at Braehead, near Glasgow was left hanging on loose fixtures. Marks & Spencer are alleged to have ignored repair requests, allowing the door to fall into disrepair. Marks & Spencer pled not guilty to this; there is still no outcome of this trial. ...

Words: 1090 - Pages: 5

Free Essay

Pestel Analysis

...PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE * Automotive Division of Mahindra & Mahindra Ltd. is in the business of manufacturing and marketing Utility Vehicles, LCVs and services for last 52 years. * It is the market leader in this segment enjoying more than 503 of the market share. PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 3 TOPIC | PAGE NO. | OVERVIEW | 5 | PURPOSE OF PESTLE | 6 | POLITICAL FACTOR | 8 | ECONOMICAL FACTOR | 11 | SOCIAL FACTOR | 13 | TECHNOLOGY FACTOR | 15 | LEGAL FACTOR | 17 | ENVIRONMENTAL FACTOR | 19 | SUMMARY | 21 | PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 4 * Political, Economical, Social, Technological, Legal, Environmental. * It encompasses the important factors that influence strategic management. * It gives an overview of the different macro environmental factors that the company has to take into consideration. * It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 5 * What environmental factors are affecting the organisation? * Which of these are most important at the present time? * Which of these are most important in the future? PESTLE ANALYSIS OF MAHINDRA AND MAHINDRA AUTOMOTIVE 6 Political Environment Economical PESTLE Legal Social Technology PESTLE ANALYSIS OF......

Words: 1023 - Pages: 5

Free Essay

Pestel Analysis

...AICD Company Directors Course Assignment Case Study 1: Traveltime Global Limited (TGL) Part 2 |External Risks - PESTEL | |Political |US is a stable political environment | | |We already do business in the US and understand the legal, tax etc regime | | |Sunbelt suffered a severe downturn post 9/11 and took 3 years to recover – potential for similar | | |impact from future terrorist activity | |Economic |US economy has stalled and expected to remain flat for some time | | |Travel industry suffering downturn – potentially depressed holiday revenues | | |Already seeing slowing in property sales (and 80% sales at TV are domestic) | | |International sales are currently declining (from 20%) - weakening US$ may encourage some | | |regrowth | | |Insurance premiums in hurricane prone districts have risen......

Words: 650 - Pages: 3

Premium Essay

Pestel Analysis

...1)The Coca-Cola Company is an American multinational beverage corporation and manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups, which is headquartered in Atlanta, Georgia.[2] The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pembertonin Columbus, Georgia. [3] The Coca-Cola formula and brand was bought in 1889 by Asa Griggs Candler(December 30, 1851 – March 12, 1929), who incorporated The Coca-Cola Company in 1892. The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments. In those times Coca-Cola was only a syrup, but not a full drink. All people diluted it with water and drank as medicine, because it was made of cocaine. And once, one alcoholic because of his hangover diluted it with soda and liked it. From that day all people began to drink this beverage only with soda.  3)Coca Cola is aimed more at teenagers than any other age group.It is aimed at male and female teens because it is seen as a cool drink/ This because it is mainly promoted on the television which is mostly watched by teenagers rather than older people. It is sold all around so that everyone can buy it/ It is set at a reasonable price so that teens can afford it......

Words: 884 - Pages: 4