Sunday, June 19, 2011

Chapter 4... Exploring the External Environment.. Macro and Industry Dynamics

PESTEL analysis framework has six sections: Political, Economic, Sociocultural, Technological, Environmental, and Legal

Ford Motor Company has seen its fair share of industry dynamics since its early days. In most recent days the factors that play into each part of the "PESTEL" analysis are not much different from those of the past. However the emphasis that is placed on each one seems to be increasing exponentially.

Political Factors:
The political environment of the US today seems to be widening more and more with each election and campaign. There are so many specialty groups petitioning for this or that which makes life difficult for a large firm in which tries to attract people from all backgrounds. Ford has done a good job of maintaining its image as a workers truck. As was stated before in other posts, Ford also attracts the attention of other types of social-economic groups with its "high-class" expensive luxury lines of vehicles. The political factors seem to be a combination of the following categories in the PESTEL analysis.

Economic Factors:
Ford Motor Company has suffered just as the rest of the auto industry in the past years. As was mentioned previously their ability to maintain a level of business that enabled them to stay afloat when others were taking handouts was an example of their ability to adapt to changing economic circumstances. Not only was the auto industry hammered during the recession of 2008, but shortly following that was the collapse of the banking industry. Ford Motor Company's ability to stay above water with their financing capabilities was impressive as well.

Sociocultural Factors
Ford in recent months has increased their advertising to help consumers understand that Ford is an innovative and exciting company with new and pertinent vehicles that are sleek in design and capability. One of the things that they are focusing on is the environmental factors which we will talk about later. They are playing to all types of consumers also... one of the consumer classes that I would have never thought about for a new car is that of the new driver. Ford has increased their advertising to new drivers or parents of new drivers explaining why their new models are some of the best cars available for new drivers to use. Interesting isn’t it.

Technological Factors:
As it has been mentioned in other posts, Ford's major move in recent years is that of the technology that is in their cars. With Ford's venture with Microsoft to introduce a "smart car" that has an understanding of what types of music the driver prefers to read text messages aloud and voice commands; Ford has definitely taken the lead in terms of technology inside the car. With this leap however some bumps and bruises have come with the territory.

Environmental Factors
Ford has unleashed a new line of economic cars with the emphasis on the environmental safety of the cars. With going green being a major concern of a growing number of people, Ford has changed its focus from large gas guzzling SUV's to more fuel economic engines and technology. Ford is making changes in order to conform to new government regulations and market conditions.

Legal Factors
Ford has taken care of all the necessary precautions to make sure that their vehicles pass the inspections of the Federal Government of the United States. With all of the safety regulations, financial regulations, and any other regulations, Ford continues to maintain compliance with the ever-changing regulatory agencies that are continually being made.

The PESTEL analysis covers the aspects of a company that enable it to continue being a top producer in a macro environment. With this overview one can see that Ford Motor Company may have some flaws as most major corporations do, but is a cut above the rest with its capabilities and resources.

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