CSL 131 Introduction to Communication Disorders

Introduction:

Volkswagen AG which is also known by the name of Volkswagen Group is a German multinational automotive manufacturing corporation founded by the German government in 1937 with the aim of producing large scale low price “people’s car”. It has its headquarters in Wolfsburg in Germany and is identified as one of the world’s leading manufacturers of automobiles and commercial vehicles. The company was originally operated by the German Labour front and gradually expanded its production in 1950s (volkswagenag.com, 2021). Since then the company has largely focused on export including Mexico, Brazil, China and U.S. Today the Group comprises of twelve brands from seven different European countries which are: Volkswagen, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania and MAN (statista.com, 2021).

Social Factors:

Social Factors generally comprises of cultural norms and the existing believes and values of the society, their attitude and perception. Social factors are actually included by the existing levels of employment in a society, the education level that actually modified the think pattern, behaviour and lifestyle of the individuals (Perera, 2017). For example: in the developing markets there is a growing affinity of the consumers to choose bikes, scooters or use ride-sharing car application services as it involves less investment that purchasing a car. Again in developed counties purchasing automobile is more of a status defining approach rather than focusing on its utility. Thus Volkswagen has to determine this consumer behaviour pattern while tapping new markets

Economic Factors:

This determines the financial condition of the market that is the existing interest rate, exchange rate, the current economic situation of the market that is inflation or deflation, gross domestic product (GDP) and per capita income of the individuals. These factors actually help the brand understand whether the market holds potentials for economic growth or not- For example: Volkswagen needs to consider the level of consumer spending in developing markets and developed markets (Rastogi and Trivedi, 2016). This is actually determine which models should this automobile producing group bring so that it can have adequate market response

Political Factors:

The existing political relation between the host country and the original country where the business has actually evolved plays a very big role in ensuring smooth and hassle-free business practices. The political factors actually govern the existing government policies in the market, the tax regulations, and international trade laws along with environment laws. For example: U.S and UK are identified as two major stakeholders of Volkswagen. However there are increasing speculations between the trade regulation of Germany and U.S  (Bailey and De Propris, 2017) which might lead to the implementation of some tariffs on these export as the decision of U.K to existing EU might result in these regulations and laws.

Technological Factors:

Every business has to take into consideration the changing technologies and adapt to the same in order to expand the business. Technological innovation is identified as a major vehicle of business growth (Aydalot and Keeble, 2018). For example: Volkswagen being a global automobile manufacturer has to take into account the evolving green technology in automobile production and focus on the expanding of battery-powered electric cars, use of hydrogen fuel cells to reduce the overall consumption of fossil fuels.

Conclusion:

The above presented analysis largely focuses on some of the major macro environmental factors that every global business brand needs to take into consideration before tapping new markets. This is extremely important so that the business can successfully grow in the host country.

References:

Aydalot, P. and Keeble, D. eds., 2018. High technology industry and innovative environments: the European experience (Vol. 3). Routledge.

Bailey, D. and De Propris, L., 2017. Brexit and the UK automotive industry. National Institute Economic Review, 242(1), pp.R51-R59.

Perera, R., 2017. The PESTLE analysis. Nerdynaut.

Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external risks in construction projects. International Research Journal of Engineering and Technology (IRJET), 3(1), pp.384-388.

statista.com, 2021. Topic: Volkswagen. [online] Statista. Available at: <https://www.statista.com/topics/1574/volkswagen/#:~:text=The%20Volkswagen%20Group%20is%20one,9.3%20million%20vehicles%20in%202020.&text=Volkswagen's%20revenue%20streams%20were%20also,to%20almost%20223%20billion%20euros.> [Accessed 11 May 2021].

volkswagenag.com, 2021. Strategy | Volkswagen Group. [online] Volkswagenag.com. Available at: <https://www.volkswagenag.com/en/group/strategy.html> [Accessed 11 May 2021].

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