External Analysis Of The Macro Environment In The Automobile Industry

2.0 External Analysis The external analysis is divided into macro and micro environment, the macro or remote environment includes general forces that do not directly touch on the short-run activities of the organization, but it can influence the long-run strategic decisions. There are various ways to analyze the macro environment, but the most notable model is the PESTLE analysis (Political, Economical, Socio–cultural, Technological, Legal, and Environmental). While, the micro environment is forces or groups that directly affect and are affected by an organization’s major operations be analyzed by Porter’s 5 Forces that consists of threats of new entrants, threat of substitutes, bargaining power of supplier, bargaining power of buyer, and

America is facing an increase in the ageing population in the mature market that will cause a massive part of the existing labor force to retire in the future. The percentage of ageing population or so-called person who aged 65 years or older in the U.S. has risen from 12.4% to 14.1% in 2013, and this population is expected to grow by 19.3% in 2030 (Kotkin, 2014). This can be a major concern especially in the automobile sector as the skills of the retiring labor is not be replaced in the workplace by the new graduates as there are few students who are majoring in engineering. It leads to a shortage in the supply of qualified labor in engineering and research that can interfere with the technological transformation of Ford Company (Mushtaq & Sarwar, 2011). GDP (Gross Domestic Product) is a very vital indicator of an economy's progress where the government focuses on keeping increasing the GDP of an economy to increase the prosperity of its citizens. According to the World Bank data (2015), the U.S. has an increase GDP of US$14,964 billion in 2010 to US$17,419 billion in 2014. The rising GDP of America for the last 5 years has led to an increase in expenditure or a higher income which implies that there is a rise in the standard of living of the citizens, and due to raise in income there will be higher spending on purchasing Ford cars (Modi,