TECHNOLOGY MACROENVIRONMENT ANALYSIS

Technology Macro environment Analysis of The Automobile Industry



Technology Macro environment Analysis on The Automobile Industry

Introduction

The paper highlights the technological macro environmental analysis of the automobile industry. It depicts the new trends and developments keeping inv view the example of general motors' but focusing on the industry comprehensively. The analysis will highlight some of the macro environmental forces that shape up the nature of the automobile industry.

Macro environmental analysis

The major technological implication in this industry has been the use of green fuel and sustainable technology. The companies gave increased the efforts in this sector keeping in view the future of green technology and the hybrid vehicles. All these elements have influenced the customers to invest in vehicles and allowed the companies to transact operations around the globe; these transactions are in the form of outsourcing and the import/export of automobiles. The foreign ownership regulations and the technological cooperation among countries helped the industry to raise funds and build the advanced models which can cope with the aggressive competition (Pelfrey, 2007).

The new technology is now changing the purchasing power potential of people. The growth potential of the target market determines the purchasing power that is the major reason that the companies are operating in countries including Unites States, India and Brazil where the growth potential is high as compared to other markets; the following table depicts the geographical demand for the vehicles.

Region

2001

2005

2010

2020

North America

Western Europe

Asia Pacific

Central Europe

South America

Middle East

Africa

19.6

16.6

12.4

2.5

2.4

1.3

0.8

21.5

15

18.5

3

3

2

1

23

13

21.7

4.5

4

4

3

25

13

27

6

7

3

10

Total

55.6

64

74.2

91

Source: Nieuwenhuis & Wells

The nature of the automobile industry is influenced by the market size and the operating business, when the target market of GDP growth is high; the consumers show more interest to have a premium luxury vehicle (Erjavec, 2009). One of the significant economic forces is the oil fluctuations. If the oil prices are high, it is difficult to sell the premium and luxury cars because the cost conscious customers will not show interest in buying the cars which provide low mileage (Ingrassia, 1995). The customers today have changed from one geographical region to another for example, the U.S consumers use the cars which have large engines but the Britain consumers are habitual of using the commercial vehicles (Wells, Nieuwenhuis, 2003). The travel habit is another significant social consideration (Erjavec, 2009). Various sectors in the automobile industry are designing cars which are affordable by the middle class people. They provide facilities based on travel habits of the family. Technological factors of the automobile industry are advanced when compared with any other industry. The technological factors influence most of the elements like sales percentage of cars, customer satisfaction that leads to automobiles growth (Mintzberg, 2004). One significant trend in this sector is the use of green energy cars. The companies are investing in the sustainable technology due to the drive towards social responsibility initiatives in most of the developed countries. The concept seems attractive but it requires a huge investment. Such case will become challenging for companies who do not undertake green technology initiatives (Ingrassia, ...