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Pest Analysis For The Car Industry

2141 words - 9 pages

Research question/PurposeThe Car Industry is changing its structure quickly. While Toyota earned some 124 billion SEK last year, GM lost about 65 billion SEK. Many mergers have happened and more changes are bound to happen. Write an essay pointing out the PEST-factors you find having a strong impact and causing these changes in the car industry. Also, reflect on the changes you think will happen in the years to come.1.Introduction [1]PEST analysis is a process of checking and analyzing information relating to the environment. The PEST analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business as a business measurement tool. It involves monitoring the changes taking place in the environment and forecasting the future position. The PEST analysis could be a framework reviewing a strategy or position, direction of a company, a marketing proposition, or idea. It helps the firm to formulate its corporate strategy in line with the opportunities emerging in the environment. Strategic response to environmental changes is the end purpose of PEST analysis. PEST is made up of the first letters of the four key factors: political, economic, social, and technological factors. It assists in identifying the key environmental influences, predict the changes in environment, and understand the interconnections between influences pertaining to macro environmental factors and environmental factors specific to the industry. Most industry firms would carry out a PEST analysis to assess the prospects of their business and viability of their investment.Specifically, these four PEST factors cover all aspects of external environmental analysis. Political factors changes involve government rules such as on planning. Economic factors changes include the health of the economy, how likely people are to be able to afford property, and changes such as the rate of interest rates, currency exchange rate. Social factors changes include changing lifestyles and attitudes in population trends. Technological factors involve changes such as creating opportunities for the new products and product improvements and marketing techniques.Car industry makers nearly 60 million cars a year, and employs millions of people around the world. Its products are responsible for almost half the world's oil consumption, and their manufacture uses up nearly half the world's annual output of rubber, 25% of its glass and 15% of its steel. No wonder the car industry accounts for about 10% of GDP in rich countries [2]. In this paper, above four PEST factors involved in car industry are detailed explained and investigated in order to provide a clearer developing trend for global automotive industry.2.Influences of political factors on car industry1)WTO and China [3]Since I come from China, the Chinese auto industry is more familiar for me to investigate. As is known, China becomes one of the great growth areas for the industry. Recent...

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