unit 1 – exploring businesses
Assignment task 2
Introduction
In this assignment I will be researching and conducting a report on a business that is
in the EU. In this, I will be talking about the effects of an environment in a business.
Before conducting the research on one business, I have complied evidence against all
businesses and cam to the conclusion that in this report I will be talking about the BMW
business which is a car company that manufactures cars for customers in the EU.
In this report I will be discussing further in-depth of the environment this will include:
A full PESTLE analysis (external environment)
Internal environment
Competitive environment
Influences on BMW
The different Market structures that BMW have used in their company.
[C. P4 Discuss the internal, external and competitive environment on a given business]
External environment on BMW
A pestle analysis is the external environment of a company. PESTLE:
Politics- this focuses on the areas in which the government policy changes in legislations
which would affect the economy and the way an organization may be run. This more
particularly would include tax and employment laws. Nevertheless, the political climate of
national, regional or international regulations would deeply influence the organization.
BMW is affected by a lot of common policies that have been introduced by the government.
This doesn’t affect BMW as much as they have a high amount of funds, profits as well as
brand image. BMW is powered by more than 15 production company’s worldwide. The
manufacturing of this is efficient however this can get disrupted due to new policies and
regulations like the end-of-life vehicle recycling system. This is where vehicles are regulated
to the limit of environmental impact of their disposal, by reducing the amount of waste
created when they are scrapped. BMW had to prepare for this by ensuring its vehicles are
recyclable. BMW allocated a large sum of funds to influence political factors to favour them.
By this BMW have been the cause of slowing down the European plans to increase the fuel
efficiency in cars by putting a stricter limit on carbon emissions.
Economic- The economic factors include the changes in interest rates as well as exchange
rates, economic growth, supply and demand, inflation (where the value of money goes
down in value overtime so the price of items will increase.) and recession (where trade and
industrial activity has been reduced). Tariffs (is a tax imposed by one country on the goods
and services imported from another country) have been a difficulty to deal with for BMW as
its possible to build a BMW in Mexico and sell it to Europe without a tariff. However, if you
,build a BMW in the united states and sell it to Europe, the company will suffer by a 10%
tariff.
Social- The social factors of a business would include the target market of what an
organization is trying to appeal to. This may include things such as age, culture and gender.
In BMW’s case this would of course appeal to those who are drivers and looking to get a
high branded car. As well as this, males are mostly interested in cars so they would try and
impress the males more than females. BMW has manufacturing companies all over the
world such as china, south Africa and Austria. They have done this with a lot of research. To
gain this knowledge BMW has social media platforms on all major platforms. For example,
on Facebook BMW has over 13 million fans. They post daily to increase engagement,
nevertheless they also have an Instagram page which they have gained over 30 million
followers. Instagram is used by a younger target audience so to BMW’s knowledge they
have a feed of luxurious photos of their cars. it’s a simple but effective way for BMW to
showcase their cars.
Technological- The technological factors consider the more specific roles and development
of technology used within an organisation. Nevertheless, more in-depth with this, the
technological factor also looks at the trends in technology as well as the changes. BMW
have created a way by using greener technologies by developing the first common use of
the hydrogen passenger car. With so much competition in the car industry, the only way for
a brand to stand out than other companies is by creating something new and adapting.
BMW take a lot of pride in their innovation of new technology in their cars. BMW cars can
come with automatic parking, hybrid vehicles and autonomous driving. This has gained a lot
of attention and popularity recently and BMW are thinking about creating self-driving cars
out to the public.
Legal- The legal factor comes under employment laws, tax policies and copy right laws.
BMW abides by the copy right rules related to its vehicles, this include the WIFI and
Bluetooth. As a lot of technology is incorporated into their cars. Nevertheless, for BMW, as
they are manufactured and sold globally it’s a bit harder as they must abide by different
regulations of different countries. Any changes that may happen in a country would
drastically affect the production of BMW’s vehicles as well as their new innovative ideas to
add onto them.
Environmental- The environmental factors cover those who are external to the organization.
This would include the physical environment including, climate change, environmental
policies, pollution etc. Nevertheless, this also includes the Non- physical environment which
is campaigns and the local community and if they think the organization is ethical and
suitable for them. When BMW created the hydrogen passenger car, this was developed due
to the Europe taxes as well as the heavily produced pollution. Two very major impacts on
the car industry lately are the problems caused by cars such as the co2 emissions and fuel-
usage. BMW have configuratively developed their cars in order to keep consumers happy
and in their best interests. By this they have started to distribute hybrid car models which
use less fuel than the average car.
, Internal environment
The internal environment of a business is elements that are conducted within a
organization. This includes the current employees, management and corporate culture
which defines the employee’s behaviour in the organization. BMW is said to have a passion
in order to build new paths, thinking ahead and breaking new ground. BMW are inspired to
create new additions constantly so they want to have employees who will increase their
innovative ideas and have a desire to learn new things every day. BMW have stated their
‘secret’ which is showing that they share credit with all of their other employees. They have
stated that they have a ‘we- mentality’ by having this and ensuring everyone gets a say they
develop a very strong corporate culture within the organisation.
Corporate social responsibility is a management concept whereby companies combine
social and environmental concerns in their business operations. it helps a company be
socially accountable to itself as well as its stakeholders and the public. By practicing CSR, it
shows the impact that they are having on all aspects of society and the environment
including economically, Socially and environmentally.
BMW is a corporate citizen that is apart of the CSR that supports over 100 individual
corporate social investment projects across the country. These projects include HIV, AIDS,
local community and education. They have given communities the tools for long-term and
sustainable development. BMW group has been rated as the worlds most sustainable
automobile manufacturer for the past 8 years and they are not looking for things to change
anytime. Nevertheless, BMW was the very first company to export cars from South Africa to
markets around the world. BMW has been engaged with them for a very long time which
has contributed to the reason for their success of BMW. They continue to provide resources
towards south Africa to build a brighter future for them.
Corporate social responsibility influences business decisions as it can boost employees work
ethic and lead to an increase in productivity, this will increase profit for the company as well
as how consumers view them. businesses who adapt to social responsibility can increase
business loyalty. Businesses that do practice CSR are more likely to have a more ethical and
proud company and this effects decision making as when BMW or other businesses who
believe in CSR are hiring employees they are looking for the people who will carry on what
they believe in, so they look for employees who have retention(show that they are in
