IB PESTEL Analysis Final

Course title: INTERNATIONAL BUSINESS ENVIRONMENT
Academic Task Number: 2ND Course code: MGNM578

Date of allotment:12/9/2023 Date of submission: 3/10/2023
Maximum Marks: 30 Academic Task Type: ASSIGNMENT
SUBMITTED TO : SUBMITTED BY:ANKIT SINGH CHAUHAN

(Roll no.- RQ2360A06)
(Reg.no.- 12312267)
https://www.linkedin.com/learning/certificates/33daa26d02d6e8627c19dc65605028ce335792c78d1b41ed55a41ab10272a6e2
Here, I am going to conducting the
market research for considering the
potential and challenges through
PESTLE ANALYSIS and PORTER’s
FIVE MODELS of entering FORD
MOTOR COMPANY in Russian
market and we will discuss about how
to adapt the product or service to the
local culture, preferences, and
regulations etc.
Agenda Let’s begin…………

Ford is a highly popular automotive brand with a market capitalization
of USD 64.5 billion. Ford is headquartered in Michigan, United States
and has earned an impressive global presence since its incorporation
in June 1903. To elucidate, Ford has its operations spread across
more than 125 countries. In 2021, Moreover, the company has a strong
employee base of around 182,000 workers in different segments.
Ford’s vision is to help build a better world, where every person is
free to move and pursue their dreams. To achieve its vision, the
company has a portfolio of many vehicles that customers can choose
based on their preferences.
a) Economic sanctions: The United States and its allies have imposed a number of
economic sanctions on Russia in response to its invasion of Ukraine. These sanctions
could make it difficult for Ford to do business in Russia.
Political
b) Political instability: The current political situation in Russia is unstable. This could
make it risky for Ford to invest in Russia.
c) Corruption: Corruption is a widespread problem in Russia. This could make it
difficult for Ford to operate in Russia in a fair and ethical manner.
d) Government regulation: The Russian government heavily regulates the automotive
industry. This could make it difficult for Ford to do business in Russia in a profitable
way.
Mercury is the closest

planet to the Sun
a) GDP growth rate: Russia's GDP growth rate has been relatively
low in recent years. This could dampen demand for Ford vehicles in
the country.
b) Inflation rate: Russia's inflation rate is also relatively high. This
could make it more expensive for Ford to produce and sell vehicles
Economical in the country.
c) Exchange rate: The Russian ruble has been volatile in recent years.
This could make it difficult for Ford to forecast its costs and
revenues in Russia.
a) Cultural differences: Russia has a very different culture from the

United States. It is important for Ford to understand these cultural
differences in order to market its products effectively in Russia. For
example, Russians tend to be more conservative than Americans, and
they may not be receptive to the same types of advertising campaigns.
b) Consumer preferences: Russian consumers have different
preferences than American consumers. It is important for Ford to
Social understand these preferences in order to develop products that will appeal
to Russian consumers. For example, Russian consumers tend to prefer
smaller cars than American consumers.
c) Political climate: The political climate in Russia is unstable.
This could pose a risk to Ford's business in Russia. For
example, the Russian government could impose new tariffs on
imported cars, or it could nationalize foreign companies.
a) Internet connectivity: Russia has a relatively low level of internet
connectivity compared to other developed countries. This could make it
difficult for Ford to market and sell its vehicles online, and it could also
make it difficult for Ford to provide customer support.
b) Telecommunications infrastructure: Russia's telecommunications
infrastructure is not as developed as other developed countries. This could
make it difficult for Ford to communicate with its suppliers and customers
Technological in Russia.
c) Manufacturing facilities: Ford does not currently have any manufacturing
facilities in Russia. This would mean that Ford would need to import its
vehicles into Russia, which could be expensive and time-consuming.
d) Intellectual property protection: Russia's intellectual property protection
laws are not as strong as other developed countries. This could make it
difficult for Ford to protect its intellectual property in Russia.
a) Registration and licensing requirements: Ford would need to register its business
with the Russian government and obtain the necessary licenses to operate in the
country.
b) Taxation: Ford would be subject to Russian tax laws, including corporate income
tax, value-added tax (VAT), and personal income tax for its employees.
c) Labor laws: Ford would need to comply with Russian labor laws, including
minimum wage requirements, working hours, and vacation time.
Legal d) Environmental regulations: Ford would need to comply with Russian
environmental regulations, including emissions standards and waste disposal
requirements.
e) Intellectual property laws: Ford would need to protect its intellectual property,
such as trademarks and patents, in Russia.
f) Foreign investment regulations: Ford would need to comply with Russian foreign
investment regulations, which can be complex and restrictive.
ENVIRONMENTAL FACTORS AS PORTER’S 5 FORCES
Supplier Power Buyer Power
❑ High Concentration
of suppliers. ❑ Moderate switching
❑ Government costs
protection ❑ Moderate availability
❑ Shortage of skilled of substitutes
workers and RIVALARY ❑ Moderate size of
qualified suppliers a) Domestic individual purchases
automakers: AvtoVAZ,
KAMAZ, and GAZ
b) Foreignautomakers: Volkswage
n Group, Renault Group, and
Threat of New Entry Hyundai Motor Group
❑ High capital costs

c) Chinese automakers: Geely,
Chery, and Haval Threats ofSubstitutes
❑ High cost of brand ❑ Public transportation
development ❑ Used cars
❑ Government ❑ Electric vehicles
regulations ❑ Car-sharing and ride-
hailing services
CONCLUSION
Ford's business in Russia is affected by a number of factors, including:-
❖ Political factors: cultural differences, consumer preferences, economic conditions, political climate
❖ Economic factors: GDP growth rate, inflation rate, exchange rate, consumer confidence, government regulations
❖ Social factors: cultural differences, consumer preferences, economic conditions, political climate
❖ Technological factors: internet connectivity, telecommunications infrastructure, manufacturing facilities, intellectual
property protection
❖ Legal factors: registration and licensing requirements, taxation, labor laws, environmental regulations, intellectual
property laws, foreign investment regulations
❖ These factors can have a significant impact on Ford's ability to market and sell its vehicles in Russia, as well as its
profitability in the country.
❖ For example, the unstable political climate in Russia could lead to new tariffs on imported cars, or even the
nationalization of foreign companies. This would have a devastating impact on Ford's business in Russia.
❖ Similarly, the weak Russian economy and low consumer confidence could dampen demand for Ford vehicles. And the
lack of manufacturing facilities in Russia could make it difficult for Ford to compete with local automakers.
❖ Ford needs to carefully consider all of these factors when making decisions about its business in Russia. The company
needs to have a strong understanding of the Russian market and be prepared to adapt to changing conditions.

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IB PESTEL Analysis Final

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Course title: INTERNATIONAL BUSINESS ENVIRONMENT

Academic Task Number: 2ND Course code: MGNM578

SUBMITTED TO : SUBMITTED BY:ANKIT SINGH CHAUHAN

Agenda Let’s begin…………

Mercury is the closest

a) Cultural differences: Russia has a very different culture from the

❑ High capital costs

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