Question:
• This assignment requires you to answer three questions about the fundamental changes affecting the car industry discussed in the Financial Times article, U.S. Autos: Adding new routes, appearing on pages 7 to 14 of this course outline.
• Your response for each question has a word limit, and you cannot go more than 10% over the stated word limits.
• Assignment marks and feedback will be posted back to you via Vision by the Semester 2 date.
Assignment Questions:
1 Use PEST Analysis to identify the trends affecting the US carmakers highlighted in the article, and discuss why they are important using evidence from the article and from wider sources. (20 marks)
There is a word limit of 900 words for this question.
2 Using evidence suggest whether it would be dangerous for US carmakers to extrapolate the trends occurring in the US to overseas markets like the United Kingdom and others. (10 marks)
There is a word limit of 200 words for this question.
3 Based on your analysis of the ideas in the article, identify and evaluate the competitive stance you would advise a competitor to the traditional U.S. carmakers should adopt if it creates an innovative new product for the transportation market? (20 marks)
There is a word limit of 400 words for this question.
The purpose of the assignment is to test your understanding of strategic management and specifically those topics and ideas discussed in the first six weeks of the course.
Your responses to each question should not be presented in the form of bullet points as this will be regarded as unacceptable. Please use properly constructed sentences and paragraphs. Generally, the content of your responses for each question should contain four key elements:
• clear identification and explanation of your main argument; and
• industry evidence supporting your main argument; and
• academic ideas / concepts / theory and their supporting references from the course or wider sources that show backing for the validity of your main argument; and
• if applicable an assessment/critique of alternative arguments, which illustrates why you have chosen the “best” one.
• How you use theoretical ideas and frameworks from the course is entirely up to you. You should reference any concepts that you do use and provide supporting evidence for any other data or analyses on which you draw. Your decisions on content will be constrained by the word count per question and the number of arguments and their supporting references you discover via your background research. Academic references and any industry references employed to support your arguments should be listed with full bibliographic details.
Solution:
Question 1: Using PEST Analysis in Identifying Trends Impacting the US Carmakers and Their Importance
Political Factors
The US automobile has been characterized by multiple laws and regulations. According to Sun et al. (2010), these laws and regulations are for the environmental and competition measures critical to embracement of all players in the industry. For instance, Ford and GM companies, the major car producers in US have expedited the manufacturing of electric vehicles as a way of reducing the gasses released from fuel combustion. This is a follow-up from the federal government policy of 2012 for carmakers to reduce their average fuel efficiency from 27.5 in every US gallon (Financial Times, 2016). In 2012, US carmakers had sold approximately 18 million cars, trucks and sports utility vehicles globally (Financial Times, 2016). For instance, the manufacturing of Hybrid vehicles with an exceptional support by the individual governments owing to their eco-friendly emissions edges out their competitiveness. In addition, all US manufactured cars are bound to strict EU vehicle emission standards and regulations.
New schemes in the US and EU automobile industry prompts the production of high-mileage cars consistent with heightened increase in sales and production of automobiles (Levy & Rothenberg, 2002). This is the rationale for the rise in the F-150 and SUVs in US as shown in figure 1 below.
Figure 1: Increase in US light vehicle Sales
Source: Financial Times, (2016)
Economic Factors
In US, the carmakers have been working in their operations transformation risking a neglect of their traditional market which predominantly offers the highest sales value (Financial Times, 2016). The increased rates of car production leading to revenue growth in marketing and new product designs ascertain this concept. For instance, Raj Nair, the health of Ford’s product development did acknowledge the need for investing in new products and services to mitigate its long-term challenges (Feng & Figliozzi, 2013). Due to the deficit in number of cars per person sold, restrained revenue was lower than supply the US automobile market as at 2015 having a surplus of 80% capacity with 1.5 billion dollars frozen from the industry (Financial Times, 2016)
The financial crisis in 2008-2009 had significant ramifications……………………………………………………………………………………………………..Please pay $15 to receive the entire document or contact our team for more information