Ireland Pestel Analysis

2.
An assessment of the business implications of the above Pestel factors [20 marks]
Ans:
PESTEL analysis is a tool used to analyse the political, economic, social, technological,
environmental and legal implications which is the external factors affecting the working of an
organization. Almost 66% of external factors (macro-environmental factors) affect the
working of an organisation and 33% of its internal factors (micro-environmental factors).
Therefore, the marketing and research team of an organisation always analyse and regularly
monitor the external factors affecting the organisation. The country's PESTEL factors
determine the market's demand and supply.
As of now the organisations who look forward to trade or set up an firm in Belgium will take
into account the effects of Brexit from European Union in 2016. Belgium will now change
the policies and trade rules and regulations for EU and non-EU countries and companies.
Finance minister will change the policies and then the companies will regulate their
procedures of trade.
After the economic crisis in 2008 they have improved their economic growth by 2.5% each
year. Also in April 2015 they got the dues of world war 2 so their economy is still
developing. It is heavily dependent on trade exchanges.
Keeping in mind the current political and economic scenario of the EU, and Belgium being
the headquarters of EU, possibly Belgium can be the new market as well as a business start
up for the European zone countries. New companies trying to set up their firm in this country
will definitely have new positive opportunities and less of threats.
3. An assessment of the advisability of standardising OR adapting the marketing mix, where a

foreign multinational enters the market. [30 marks]
Ans:
http://corporate.ford.com/microsites/sustainability-report-2013-14/financial-health-
europe.html
Since Belgium is a very open economy, Ford is looking to produce and sell cars to the
European market.
In the European market, Ford completed successful and planned closures of two
manufacturing companies in the UK in the year 2013 and also in Genk, Belguim 2014.
Ford Motor Company’s PESTEL/PESTLE analysis shows that the firm has significant
potential for improvement using the 4M's of marketing mix:
Market, Message, Media and Measurement

 Political Factors Affecting Ford Motor Company’s Business
Ford’s business must address the political aspect as an external influence. Governmental
impact on firms’ remote or macro-environment is considered in this component of the
PESTEL/PESTLE analysis. The following are the political factors significantly affecting
Ford:
Opportunities:
1. Government supports technological innovation

2. Increasing international trade agreements after world war 2 remittances.
3. Increasing governmental effort for infrastructure development.
Threat:
1. Brexit from the EU.
Governments are increasingly supporting technological innovation to enhance economic

conditions. This situation provides opportunity for Ford to use governmental incentives for
innovation, environmentally friendly products and sustainability. Ford also has the
opportunity to expand its operations based on trade agreements, which make it easier for
companies to enter foreign market. This component of the PESTEL/PESTLE analysis shows
that the political external factors create significant opportunities for Ford’s growth and
expansion.
 Economic Factors Important to Ford

The following are the economic external factors significant to Ford:
Opportunities:
1. Economic growth by 2.5% each year.
2. Also in April 2015 they got the dues of world war 2 so their economy is still developing.
Ford has the opportunity to grow as the growth is very good for a developing EU country.
Ford also has the opportunity to grow in high-potential developing countries, where the
company still has limited presence. Such remote/macro-environment condition indicates that
Ford must improve business efficiencies to maximize the opportunities in foreign markets
identified in this component of the PESTEL/PESTLE analysis.
Social/Sociocultural Factors Influencing Ford’s Environment

Ford Motor Company’s remote or macro-environment is subject to the influence of social
conditions. The impact of sociocultural trends is considered in this component of the
PESTEL/PESTLE analysis. The following are the social external factors most important to
Ford:
Opportunities:
1. Increasing demand for hybrid and electric automobiles.

2. Moderate attitude about customer service.
Threats:
1. Increasing wealth gap
Ford can grow by providing products that address the increasing demand for hybrid and
electric automobiles. Ford also has the opportunity to improve its services, especially
aftersales services to attract more customers in the EU. However the increasing wealth gap is
a remote/macro-economic environment condition that threatens Ford’s Lincoln automobiles,
which are luxury products with high prices. Based on this component of the
PESTEL/PESTLE analysis, Ford’s intensive growth strategies need to emphasize more on
product innovation to satisfy changing customer preferences and address the sociocultural
external factors in its business.
 Technological Factors in Ford’s Business

Technologies enable Ford to develop its potential and compete in the remote/macro-
environment. This component of the PESTEL/PESTLE analysis deals with the technological
changes and conditions that affect firms. The most significant technological external factors
in Ford’s business are as follows:
Opportunities:
1. Rising use of mobile computing.

2. Increasing use of online fulfilment services.
Threats:
Limited network of alternative fuel stations.
The rising use of mobile computing is an external factor that creates opportunities for Ford
Motor Company to grow through mobile service support and mobile marketing. Marketing
the product becomes very easy in Belgium and also the EU Also, the firm can improve its
performance through enhanced online fulfilment services. For example, Ford parts can be
delivered to customers through these fulfilment services. On the other hand, the company’s
potential growth in providing alternative-fuel vehicles may suffer because of the limited
alternative fuel stations. Thus, based on the technological component of the
PESTEL/PESTLE analysis, Ford needs to focus on service improvement and technological
enhancement to ensure competitiveness despite challenges in its remote or macro-
environment.
 Ecological/Environmental Factors
Ecological concerns partly determine the conditions of Ford’s remote or macro-environment.
Issues regarding the natural environment are considered in this component of the
PESTEL/PESTLE analysis. The most significant ecological external factors in Ford’s
business are as follows:
Opportunities:
1. Climate change Low-carbon trend

2. Declining oil reserves.
Climate change is an external factor that creates opportunities for Ford to grow through
products that help in environmental conservation. The same effort could take advantage of
the low-carbon trend. Also, Ford can offer new products that use alternative fuels or
electricity to address the impact of the declining oil reserves on the remote or macro-
environment of auto firms. Thus, based on the ecological component of the
PESTEL/PESTLE analysis, Ford must emphasize product innovation to improve its business
performance.
 Legal Factors
Ford’s business must satisfy legal requirements. The effects of regulations on the remote or
macro-environment are identified in this component of the PESTEL/PESTLE analysis. The
following are the legal external factors notable in Ford’s business:
Opportunities:
1. Environmental protection regulation.

2. Increasing safety regulations.
3. Increasing intellectual property laws worldwide.
Ford can improve its business sustainability to address the effect of environmental protection
regulation. Also, Ford can improve product design to take the opportunity based on safety
regulations. Moreover, increasing intellectual property laws are improving the remote/macro-
environment of Ford by creating more protection for their intellectual properties and rights.
This component of the PESTEL/PESTLE analysis shows that Ford can grow based on
changes in the external regulatory landscape.
http://panmore.com/ford-motor-company-pestel-pestle-analysis
Conclusion:
Ford of Europe’s return to profitability is supported by the following:
 A gradual recovery in European vehicle industry volumes;

 Improved margins through a strengthened brand and a richer product mix;
 Improved segment share with the launch of our expanded portfolio of sports utility and
commercial vehicles, covering more market segments; and
 A more efficient manufacturing footprint, including significantly improved plant utilization.
Ford Motor Company’s PESTEL/PESTLE Analysis – Recommendations

Ford has major opportunities for growth and improvement, as shown in this
PESTEL/PESTLE analysis. Ford can enhance its product innovation to address various
opportunities linked to climate change, demand for hybrid and electric automobiles, and
related external factors. Ford’s international remote/macro-environment also offers
opportunities for growth through expansion, especially in high-growth developing
economies. Thus, Ford must implement strategies to globally expand based on these
opportunities.

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2.

3. An assessment of the advisability of standardising OR adapting the marketing mix, where a

Market, Message, Media and Measurement

1. Government supports technological innovation

Governments are increasingly supporting technological innovation to enhance economic

 Economic Factors Important to Ford

1. Economic growth by 2.5% each year.

Social/Sociocultural Factors Influencing Ford’s Environment

1. Increasing demand for hybrid and electric automobiles.

 Technological Factors in Ford’s Business

1. Rising use of mobile computing.

1. Climate change Low-carbon trend

1. Environmental protection regulation.

Ford of Europe’s return to profitability is supported by the following:

 A gradual recovery in European vehicle industry volumes;

Ford Motor Company’s PESTEL/PESTLE Analysis – Recommendations

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