ASSESSMENT QUESTION 

Read the case supplied titled “Electric vehicles in Europe”: gearing up for a new phase?" then answer both of the following questions:

"Volvo Cars, the premium carmaker, has announced that as part of its strategy marking the historic end of cars that only have an internal combustion engine (ICE) and to place electrification at the core of its future business, every Volvo it launches from 2019 will have an electric motor. According to several analysts, the announcement represented one of the most significant moves by any carmaker to embrace electrification and highlighted how over a century after the invention of the internal combustion engine, electrification is paving the way for a new chapter in automotive history. According to Håkan Samuelsson, President and Chief Executive of Volvo “This is about the customer, people increasingly demand electrified cars and we want to respond to our customers’ current and future needs. You can now pick and choose whichever electrified Volvo you wish.”

a) Using the information above and other information in the article supplied to you titled “Electric vehicles in Europe: gearing up for a new phase?”, explain the major forces shaping the business environment of the car manufacturing industry. In your analysis, explain how the industry has changed in the last few years. Also, provide a critical assessment of the organisational and other changes that may take place in the future and the reasons for such changes. Specifically, discuss the reasons why there is a drive towards the production of electric cars and link this to the changes that have already taken place in this industry as firms try to position themselves to gain a competitive advantage [50 Marks].

b) Apart from the production and selling of electric cars, identify new and emerging business opportunities that the production and marketing of electric cars may present to entrepreneurs and business executives. In your discussions, identify and critically assess other businesses currently linked to the global automotive industry that you think may not be profitable in the long run to invest on (50 Marks].

Write an answer in essay format (total 2,500 words for both parts combined).

• Understand the business environment affecting the automobile industry.
• Use Pestle and Porter's Five Forces frameworks in order to understand both the macro and micro factors shaping the automobile industry including major political, economic, and technological factors and the reasons why there is a drive towards the production of electric cars.
• Apply Porter's Value Chain to understand the nature of activities involved in designing and producing EV cars and components to reveal areas of notable value-adding activities within the process of manufacturing electric vehicles that present major opportunities.