Economic and Business World

Economic and Business World

[Abdullah Mehmood]

[1037723]

FORD MOTORS

Introduction

PESTEL analysis model, also known as environment analysis, an effective tool for the analysis of the macroeconomic environment , and be able to analyze the external environment, and be able to identify all the force of impact on the organization . It is a survey organizations external factors that affect each letter represents a factor, can be divided into six major factors. Through a detailed study of company's environmental, political, social, technological as well as legal changes and their impacts over the growth of business. This study will discuss the macro environmental factors by the techniques of identifying them through PESTEL analysis of Ford and make an examination through it which highlights the practices of Ford's strategies.

PESTEL Analysis

Political Factors

The attack of September 11 had made obstacle in the sales of Ford motors in U.S and the whole automobile industry in which specifically Ford had 10% loss in sales (Ford Annual Report, 2001). The recession rate rises in Argentina in the year 2002 which has affected Ford's sales (BBC, January2005, http://news.bbc.co.uk; Ford, 2005). Similarly the Iranian war has adverse Affects on Fords production which has declined to 7% (Ford Annual Report, 2003). In Europe, Ford Motor Company has recorded a decline in sales of 10% for the first half of the year, with 617,600 units sold in its main 19 European markets and a market share of 8, 1%. In June, Ford sales were down 16.1% to a total of 100,400 units, representing a market share of 7.3%. the US, China relations are at the stake as they have been strained for a long time.

Economic factors

The rising petrol prices became expensive to afford by the consumers however consumers are forced to change their cars that operate in diesel use (The Guardian 2005). The price share also faces a decline in many situations (Reuters, 2005). This has lead to the rise in sales of the Japanese cars which are less petrol consuming; this has made the American car industry to reduce its prices for the sales of vehicles in order to maintain market shares. This manufacture did not use the “bailout” funds the government was offering, but use it as part of a contingency plan. Revenue in the second quarter of 2011 dropped in comparison to the first quarter of $68,641 million to $35,527 million. However, this seems to be a consistent with 2010 first and second quarters of revenue. The total assets had a slight increased from 2010 of 2%. The total liabilities decreased in June 2011 to $162,736 million from $165,329 million in December 2010.

Social Factors

The choice of car is influence with the way customer is communicated. There is more demand for the luxury cars. There is a trend of small cars in EU which actually facilitates easy access in the business city centers. However the Japanese cars are more successful in U.S market after the enhancement in use of Japanese cars in U.S market Ford and GM has faced ...