Global Business Environment

Introduction

According to Botha, Kourie & Snyman, the classic model of Range Rover was introduced in the year 1970 to fulfill the demand for cars that have a more polished definition of luxury and refinement (Botha, Kourie & Snyman, 2014). With time it grew into a brand that had an exotic range of four-wheelers which include the Discovery, Range Rover, Friedlander, Range Rover, Defender, Range Rover Sport, and Range Rover Evoque. The plants at Solihull and Halewood assemble the Land Rovers currently. The research and development wing is at Whitley and Gaydon engineering centers (Wetherly & Otter, 2014).

Background

The PEST analysis is a marketing concept of principles and is utilized as a tracking tool by companies to record the operating environment or the environment in which the launching of a new service, project, or product is done. It is a structure that marketers use to monitor and analyze the macro environment of external marketing and its factors affecting the organization, i.e., in this case, we are considering Jaguar Land Rover. Worthington & Britton gives an overview of the various factors of the macro-environment which are to be considered. This analysis helps in understanding the decline or growth of the position of a business (Worthington & Britton, 2015). Land Rover is a brand of car that is currently owned by Tata Motors of India. Jaguar Land Rover was formally owned by a multinational manufacturer of cars from Britain. This brand is considered an icon of Britain and has a history of receiving the Royal Warrant from King George VI in the year 1951. The Land Rover Series of the Rover Company which was launched in the year 1948 had its name for its first series as Land Rover.

Globalization and Key Underpinning Aspects

Summary of PEST Table:

Political	Economical
Social	Technological

Pest Analysis

PEST Analysis is also referred to as Pest Analysis. On expanding PEST we get P for Politics, It provides an overall view of the entire environment from various perspectives which has to be kept in check and monitored during the designing and creation of a specific idea (Granger & Schroeder, 2013).

This structure has been altered in certain areas because the marketing gurus have made additional features like E representing Ethics to instill the demographic elements during the utilization of the framework and carrying out the research in the market.

Political Factors:- As per Bah & Fang, Tata has taken a drastic turn after getting the loan sanctioned from the European Investment Bank over its loan demand from the government of the United Kingdom (Bah & Fang, 2015). The political aspects of an organization in the market of the United Kingdom are effective incentives on tax for inbound investors. It includes very strong and effective political motivation regarding globalization.

There is tough trust and reputation of many organizations in the UK market. The legislative framework is adaptive. After the year 2009 due to the initiative of the government regarding the Tax holiday expiring under STPI, it has faced negative effects.

ECONOMIC

These factors determine the performance of the organization on economic grounds which influence directly along with having reverberating effects that are long term. As per Zalengera et al, the conditions of current as well as future demand affecting the growth potential in the market, strategy regarding pricing, the margin of operations, and return investment potential are one of the important determinants of location choice (Zalengera et al, 2014).

The economic determinants of an organization are strong skills regarding technology, a base of export, and strong links of infrastructure. The model cost of labor is competitive in most organizations. The authority regarding investments has shifted focus towards technological investments. Land Rover has a highly mobile workforce (Team, 2013).

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SOCIAL

The social determinants analyze the environment of the organization on a social level in the market. These factors determine trends in culture, population analytics, and demographics. etc. As per Kolios & Read, for example, an organization employs a large number of people i.e. 15,000 people are currently working as its workforce in the United Kingdom alone which includes around 3500 engineers at the 2 centers of product development in Gaydon and Coventry (Kolios & Read, 2013).

There is a program regarding pilot training that completely focuses on nurturing solutions to problems and enhancing employee skills. Most of the organizations in partnership with the National Skills Academy for Manufacturing had a program developed along with associating with BUCAM which is a training provider to adjoin the conventional issue-solving along with basic skills. Land Rover has a strong culture of education, management, and science. Jaguar Land Rover even has an adaptive population which is the English population (Gillam & Siriwardena, 2013).

TECHNOLOGICAL

The technical factors refer to technological innovations which affect industrial operations irrespective of the fact whether the market is favorable or unfavorable. As per Ho, these factors pertain to development and research, automation, and the amount of awareness regarding technology possessed by a market (Ho, 2014). Manufacturing cars with superior technology are the identity and recognization of the automobile industry.

Commercialization and inventions of having the body of cars in aluminum were done by the organization. The research and development facilities and culture here are very strong. This company has a strong association with Western companies which are technical.

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Opportunities

The opportunities for Jaguar Land Rover are huge in the global market, especially after Brexit. It can find opportunities in improving its reputation regarding quality. As per Gillam & Siriwardena, Land Rover can also work on the areas where the development of eco-friendly cars can be manufactured. There is a huge market for Land Rover in the Chinese market. There is a huge range of opportunities in emerging and developing economies like Russia and India despite Tata Group which is an India-based brand taking over Jaguar Land Rover (Gillam & Siriwardena, 2013). This would lead to an increase in sales of the cars. New acquisitions and economies that are growing make way for new opportunities for this brand.

There is a constant increase in the income levels of Jaguar Land Rover. As per Zalengera et al., New and advanced services and products by venturing capital into new markets globally provide good opportunities. The availability of space for competitors and the expansion of automobiles provide broad opportunities for growth (Zalengera et al, 2014). Some opportunities pave the way to purchasing the potentiality of a capable customer base and increasing per capita income. Developing the service and distribution network in different countries is going to boost productivity.

Threats

The threats faced by Jaguar Land Rover are regarding the shortage of funds associated with research and development. There are huge demands regarding funds investments which are needed to meet the requirements for the development. There is an incurrence of high costs regarding the manufacturing of hydrogen technology because of the setup of advanced and new plants globally. As per Granger & Schroeder, the main threat in the manufacturing industry is regarding the period. Land Rover has to ensure to introduce a new car that can be at the edge regarding time constraints than its global competitors to have the advantage of being the first to take on the market. It is very much necessary to receive the acceptance of global consumers. It is generally assumed that a segment of the upper class will be spending much more on the advanced product (Granger & Schroeder, 2013). To handle the development of the Land Rover huge expertise of the experienced managers is required to be at the top of the finance division, management, and R&D. The threats to the Land Rover could be regarding the changes in the taxes which is relevant after Brexit. The lowering of profitability and growth of competition along with rates of interest increasing gradually can pose threats to the company (Botha, Kourie & Snyman, 2014).

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The tough competition by the other brands of automobiles can emerge as a potential threat. The rising prices of fuels and more dependence also threaten the manufacturing process. The instability in the finances results in a direct fall down in the segments of premium cars (Ho, 2014). The brand image may get affected by foreign partnerships, especially deterring the customers of the United Kingdom. It is a threat to any brand including Jaguar Land Rover when other giants in global automobile manufacturers offer similar levels of features and competition.

As per Gillam &, The innovations in the product along with frugal engineering done by the competitors pose a threat to the brand. the volatility of the new and advanced products in the market challenges Jaguar Land Rover (Gillam & Siriwardena, 2013). The presence of strong competitors like Lexus, Infinity, BMW, and Mercedes challenges the company. The branding image and sales that are receding are also among the threats. The increased rate of interest has made the investment costlier and riskier.

Conclusion

this report the PEST Analysis of Jaguar Land Rover has been briefly discussed. the strategic position along with the external environment of the company has been described. The PEST Analysis has assisted in the research of the position and growth of Jaguar Land Rover globally. The strategic position as a whole was outlined which reflected a clear understanding of what the opportunities and threats are for the brand. the Pest Analysis assisted in carrying out the demonstration regarding the strength of the position of Jaguar Land Rover in the global market. It is recommended to undertake the required steps to counteract the current challenges and maintain the strategic position of the brand.