PEST Analysis Of Volkswagen

Through the increased competition of Japanese and Korean carmakers, which sold and produced at much lower cost, BMW had to take advantage of economies of scale of scope and reduce factor costs. This was done by producing in developing countries where inputs and labor were cheaper. Consequentially BMW expanded to South Africa and later on to other emerging countries (BMW, 2015b) in order to remain competitive.

International recognition of the brand plays a vital role in how the company is viewed. The brand’s presence in 153 countries shows how the group dominates the European automobile industry (Volkswagen Group 2014).

To deliver superior value to the customer , shareholder , employee and the society at the large.

People usually purchase cars for different reasons. Most people choose their cars according to necessity. In spite of all the world campaigns to raise awareness about air pollution an global warming people still prefer to have their own vehicle to be able to move around more comfortably.

In the previous couple of years, purchasers have requested an ever increasing number of autos that are reasonable as well as fuel-proficient. This ascent popular is because of the changing variables in the essence of the purchasers, the ascent in populace, the rising salary, the ascent in costs of substitutes, and the drop in the costs of supplement items and administrations. Honda and Toyota have both made a significant entirety of cash by exploiting the chance of these ascents sought after.

In the Automobile industry, many companies need to strive to make better and affordable cars. The automobile industry is concerned with profits and competition, consumer demands for styling, safety, and efficiency and it is also involved with labor relations and manufacturing efficiency. For example, in 2007, more than 73 million motor vehicles, including cars and commercial vehicles were produced worldwide. In 2007, a total of 71.9 million new automobiles were sold worldwide: 22.9 million in Europe, 21.4 million in Asia-Pacific, 19.4 million in North America, 4.4 million in Latin America, 2.4 million in the Middle East and 1.4 million in Africa. The markets in North America and Japan were stagnant, while those in South America and Asia grew strongly. Of the major markets, Russia, Brazil and China saw the most rapid growth. In 2008, with rapidly rising oil prices, industries such as the automotive industry are experiencing a combination of pricing pressures from raw material costs and changes in consumer buying habits. The industry is also facing increasing external

1. Positive attitude towards “green” vehicles. Today consumers are more aware of the negative effects (air pollution) caused by cars fueled by petrol and diesel. Large quantities of CO2 emissions intensify greenhouse effect and negatively impact the life on earth. Thus, consumers are more likely to buy new hybrid and electric cars that emit less CO2. 2. Increasing fuel prices. Increasing fuel prices open up large markets for GM’s hybrid and electric cars as consumers shift towards cheaper fuel types. 3. Changing customer needs. By introducing new car models, General Motors would be able to meet changing customer needs for smaller and more fuel-efficient cars. 4. Growth through acquisitions. GM has successfully acquired many car companies in the past and should continue doing so to gain new skills, assets and access to new markets.

Vehicle has become a status symbol in the recent times, resulting in increased demand for luxury cars

* Political/Legal: The political portion of the general environment is often overlooked because businesses and people alike think that it is enough to follow the laws and abide by regulations set forth by the government. This is incorrect. Many automobile companies such as Chrysler operate in foreign countries and look to export their products to foreign countries as well. The laws and regulations in these foreign countries have to be navigated and understood just as precisely as those in the home country. In the case of Chrysler, when it was acquired by Daimler-Benz, the company had to develop a whole new outlook on its business practices. Taxation policies had to be revamped polices on the export, import, and manufacturer of

The following report will focus on the Volkswagen Company and how they will improve and rebuilt their image. This has been a result of the catastrophic carbon emissions issue that surfaced in 2015. Competitors such as Ford, BMW, General Motors, Audi and Toyota will be discussed and indicate where VW can focus their changes on and learn from these. Furthermore, this report will show a situation analysis on the automobile industry leading to the problems and opportunities for VW. These analyses will be followed by an evaluation matrix outlining a contingency plan. Following this, a three level product concept will be conducted to assess VW’s core product and actual product after completing an internal analysis. These evaluations will result in a list of marketing strategies and an action plan for VW’s executive team to meet. Research has been sourced from industry websites, academic research and competitor analysis.

2. Communications and effectiveness: currently the marketing department and other internal customers are working in line to ensure there are transparent and honest information flow within the organisation. Not only so the communication channel is kept as lean as possible to ensure there will be minimum amount of miscommunication and misunderstanding involved within the communication process. Email and business presentation are the most common methods to ensure information are delivered on time and with high quality.

PEST analysis is a model that uses environmental scanning to analyze the four factors, such as political, economic, social-cultural and technological. PEST analysis is a part of external analysis when making market research, giving the company an overview of the different factors in the overall environment. This strategy tool can also effectively understand the growth or decline of the market, the business situation, potential and operational direction.

Keeping in mind that all aspects of the SWOT analysis are pertinent issues that affect Porsche Automotive Group, it must be noted that there are factors that weigh more heavily than others. For example, of the strengths, weaknesses, opportunities, and threats that have been taken into consideration the threats and weaknesses that the firm is facing are of the greatest concern. The most concerning weakness of the firm is that of their limited consumer demographic due to their specialized product. This small customer base is relatively finite. Even with there being viable customers, the number of vehicles being purchased is still potentially small than that of the nearest competition. This issue is specific to Porsche. Most of their closest competition, such as Renault Group of France

Volkswagen Group, one of the leading automobile manufacturers in the world, has been on an impressive incline in the market with a continuous rapid international expansion. Unlike other reigning companies such as Toyota Motor Corporation

2. Rising raw material prices. Rising raw material prices increase so will the the price of the cars. The prices are important to manufactures because this means that they will need to increase the sales and so their profits will decrease.