Strategic Management Coursework

Contents

Political        2

Economic        2

Social        3

Technology        4

2.        5

3.        6

References        8

 

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Political

In 2012, the Federal rules introduced fuel efficiency standards from 27.5 miles per gallon to 54.5 miles per gallon by 2025. US car makers are currently trying to meet the fuel economy targets, for the fuel efficiency to increase; companies are replacing their materials with lighter weight materials in their products. For instance, The F-series trucks at Ford has replaced steel with aluminum, it makes the truck lighter and provides a boost to mpg. The government affects the automotive industry to improve fuel efficiency so that car makers can design vehicles better.

The government would need to change its rules and regulations with changing times. Currently, due to traffic fines, the government makes significant revenues, for instance, human driving errors such as Parking tickets, towing fees, etc. With autonomous cars and latest technology innovations in transport most of these revenues will be eliminated.  US car makers are focusing on making deals with ride sharing companies, which means that there is a decline in personal vehicle ownership, and therefore any revenue associated with the vehicle will be diminished. Furthermore, with driverless cars auto park feature, any fine associated with parking will also be gone. Government officials need to find an alternative to this revenue loss. The Government can start charging toll roads fee or the fee for using the infrastructure, but by implementing such regulations, it would require large investments to be made. With the help of these regulations it was easier to support the US automotive market, from the rapid export fall.

Economic

High rate of unemployment, declining financial performance in all sections of the economy is one factor that will affect the US car makers.

US have accepted the trends to unify the taxation system, because of these different taxation systems, the US carmaker opportunities at a larger scale may be hindered. This disparity might lead companies, moving their capital to subsidiaries, where taxation is more preferred. Although the economic environment over the years was difficult for US, the US recently observed that there has been a significant increase in the consumer purchasing power, Although the low income and high unemployment rate.

With the declining value of the U.S Dollar, the price of the raw material is being affected by the exacerbating pressures in the domestic market by almost up to 50 percent. One of the other factors that are affecting the US automakers is the increase demand for high technology equipment, which will help them boost exports and growth in production by 15 to 35 percent.

When the ride sharing feature is put into action, the autonomous vehicle would require frequent maintenance, as the vehicle would acquire the mileage more quickly. Furthermore, will more people using the vehicle due to affordability and convenience this may increase the chances for crashing.

Social

The automotive industry has revolutionized the whole society. The market for automobile has become very complex, as the customers are more aware of the technology. With the help of the internet, customers are able to find better deals overseas, this factor challenges the traditional way of selling a car.

People in the US believe that automobiles has an adverse effect on health and environment, and this is why people are now choosing healthier options like walking or cycling to cover short – medium distances.

In the U.S society, the first priority is house ownership and the second priority is the ownership for a personal vehicle. In today’s lifestyle, the importance of owning a car is undeniable. Apart from the car’s role in everyday life, it also contributes towards the value of GPD (Gross domestic product) and also increases the rate of national energy consumption. Car makers need to keep up with the changing and challenging norms of the society.

Technology

The automotive industry has undergone different phases of technology innovations since it was first produced. One of the biggest challenges for U.S car makers could be keeping up with the latest technology. As consumers are more aware of the latest technology, they are expecting the car makers to produce an automobile that is equipped with the latest features and accessories. Car makers may also face problems with supply chain as well. Technology where software needs to be up graded or rebooting a computer needs to be done requires technology suppliers like Google, Microsoft or Apple. These Technology suppliers are currently not well-attuned to high tech business context.

Technology can also be a threat to the traditional car makers in the US, if the driverless car market tends to be successful; technology suppliers may extent their investments.

Also technology cannot be truly reliable. As in the case of Tesla’s incident due to technology failure, it is said that the incident occurred due to the tractor trailer laterally crossing the lane and the radar sensor failed to apply the brakes. US automotive car makers need to work on technology in order to gain customers trust and to fulfill the federal government rules for safety.

2. The automobile industry is now known as the high technology sector, with increasing demand in information systems, utilizing the electronics and advanced materials. Over the years US-Japan technological interactions has occurred and it is said to continue in the coming year in the industry. To manufacture vehicles for export and domestic use, US are now re-emerging as a competitive market. Japanese based manufacturer’s plans on increasing their US exports, in relation to the competitiveness of the dollar- yen relationship.