In this Post i am going to discuss on how External Environment creates Negative or Positive impact on any companies Operations .Here i am taking example JLR ( Jaguar and Land Rover ) to better understand the issues.
How the External Environment impact's on Operations of any Company like Jaguar and Land Rover ?I have created this topic for my study purpose in 2014 . So All the data mentioned are from Anual Report of March 2014.
How the External Environment impact's on Operations of any Company like Jaguar and Land Rover ?I have created this topic for my study purpose in 2014 . So All the data mentioned are from Anual Report of March 2014.
Company Introduction
Jaguar And Land Rover : It's UK's largest automotive manufacturing business who built two brands.
First is Land Rover which is worlds leading manufacturer of all drive vehicles. Second is Jaguar which is Premier luxury sports saloon and sports car Marques.
Address : Jaguar Land Rover Limited,Abbey Road,Whitley,Coventry,CV3 4LF.
Employee :29,000 People (World Wide) & 1,90,000 (Through Dealerships, Suppliers and local business) .
Sales : 434,311 units in 170 Countries (March 2014)
Revenue : 19,386 million Pounds (2014)
Profit :2,501 Million Pounds (Before Tax in 2014)
Employment : Awarded the 'Two Ticks ' symbol.
Invsets employee learning and development.
Offers Industry - Leading apprenticeships.
Was Ranked 26th in The Times Graduate Employer Top 100
30th in The Guardian Top 300 Graduate Employer indices.
External Environment's impact's on Environments
Today the Biggest problem occurs with JLR is BRIEXIT . Due to BRIEXIT the Operation's of JLR will be affected . Please Click Here to see more Detail.
Brexit may have adverse impact on Jaguar Land Rover's operations
1. Natural and Man-Made Disasters
The JLR is UK’s biggest automotive
manufacturer car company works in all over world.
Outsourcing different parts , Shipment of product from
other units located around world.
Due
to some unforeseen reasons such as Natural Disasters like floods, volcanic, eruptions, earthquakes , tsunamis and
other geologic processes and Man – Made Disasters like strike , fire,
accident ,etc. these factor effects the supply chain management of the company.
For
example On 8 January 2015 Hoegh Osaka a Cargo ship was carrying 1200
vehicles out of majority of them JLR and estimated cost is $53 million USD sink
in the sea.
2.Commodities and Natural Resources
Automobiles manufacturing include
commodities like steel,aluminum
,rubber, platinum and rhodium.
The emerging markets, prices of these
commodities are likely to be volatile and may rise significantly.
The
main risk in supply chain is the price of commodity is increase if the demand
of it high ,especially those used in vehicle electronics such as rare earths,
which are predominantly found in china.
The
manufacture of a new vehicle - including sourcing raw materials like energy
,water ,and also produce Emissions,
waste.
Global
energy demand is predicted to increase
by a third from 2010 to 2035, with energy-related CO2 emissions increasing by 20% in the same
period.
In
emerging markets, fuel needed for transport could increase oil consumption by
15% from 2010 to 2035. Demand
is also outstripping supply for other increasingly scarce natural resources
such as minerals and water.
3. Physical Location
The Companies products produced in various parts
of world which includes Europe , Brazil , Africa, China, and Asia .
New
Market entry , establishment and expansion cost may significantly higher then the competition.
Many Actual and Potential risks may arise in companies international business.
Including
language barriers.
Cultural differences .
Difficulties in staffing and managing.
4. Government Policies
Government
policies of different countries are different
Government
regulation like safety, noise, vehicle emissions and level of pollutants
generated by product facilities.
Corporate
and other taxation s policies changes an exports as well as other
incentives changes offered by
governments could create serious problems in operation s of the
company.
For
example : In India gives exemptions in excise duty for manufacturing facilities
in some states.
Brazil
has increased import duty for foreign
vehicles.
5. Supply Chain Defects and Recalls
The
network of Authorized dealers and service centers is responsible for the sale
and service of the products sold internationally.
The
Company monitors performance of its dealers and distributors.
This
is expected to enable them to provide support.
Under
the influence of any of the company’s sales operation and results of operations may be affected
adversely.
Any
significant problems affecting the results of operations and the costs of the
components of the ingredients, or impairing the availability of timely, could
continue to rise.
This
is the biggest factor that effect the all supply chain of the business and the
profit of the company.
The
question of the safety or reliability of its vehicles and damaged the
reputation of the product and therefore the impact on demand may cause the
company’s customers to remembers.
6. Innovation and Competition
Global
industry is highly competitive and intense competition worldwide. Automotive
industry is constantly in view of
globalization and consolidation.
Competition is especially likely to
- The increase in premium auto motive.
- Product excellence and features.
- Innovation and time to produce new product.
- Ability to pricing ,control cost, reliability, safety, customer service, fuel economy and financing terms.
Accept new technology and understand its requirements implement it to fulfill
customers satisfaction.
How to Get Competitive Advantage Based on External Factors
1. Natural and Man-Made Disasters
The JLR can not prevent the Natural
Disaster but the some step can be
taken for reduce the possibility loss.
The company is prepared with robust
control framework which involves four
steps:
- Prevention
- Awareness
- Reaction
- Revival
Step1 :Prevention :
- Identify and minimize the risks may occurs at any plant and in supply chain due to natural or man-made disaster.
- Inspect all the building that can affected by disaster.
- Routine process of house keeping and maintenance .
- Install automatic system that alarm on any disaster occurrence.
- Protect the computer ,data that can’t stolen . (Secure with CCTV,Password)
- Have Comprehensive insurance of each and every important vehicle, mans, assets of the company.
- Back up and Restoration Process as routine.
Step 2 Awareness:
- Prepare written of Response and Recovery plan. Keep test it in routine time.
- Should maintain equipment those helps in disaster and put equipment together them.
- Prepare and Train an in-house disaster response team.
- Put one Man at every Department who continuous monitor the system
Step 3 Response:
- When disaster occurs.
- Follow the instruction from the automated system which installed by JLR.
- Contact the head of the Disaster recovery person immediately & follow his instruction.
- Take photograph of damaged material for claim purpose.
- Transfer schedule of work to other place and make supply chain continuous.
Step 4 Recovery:
- Getting Back to Normal
- Restore the program both site and damaged materials to stable state .
- Contact insurer.
- Analyze the disaster plan and improve it.
- Load Balancing the work done by other site to maintain supply chain.
2. Commodities and Natural Resources
* The
Company has not find any replacement of commodities which work as raw material
in manufacturing the car.
* Due
to price risk in commodity company uses fixed price or if the price is out of
control then the impact is pass on the customer’s by rising the price of
product.
* To save natural resources company using latest
technology and spent more money in fuel
efficiency. Design for fuel efficiency
involves
1 Power Train Efficiency
2
Hybrid and Electric Technology
3
Light Weighting
* Company decreases water usage 5% per
vehicle in last year and planning to
decrease 30 % lower than the 2007 baseline.
* Company
focuses on Renewable energy to maximize the usage of energy this is done by installation more in
engineering process.
* For
JLR Operations company launched EU plan
.An EU –wide system company focuses on minimum produce of greenhouse gas
effect and follows national
laws and protocols.
* The
Company spent more money in Research and Development which
focuses on product development,
Environmental technology . The Centers
Developed in UK, Italy, Spain, South
Korea, China.
* The Company want CO2 emission level at 30% lower so the center is working on alternative of fuels, including CNG, LPG, Bio-Diesel ,Compressed-Air, and Electric cars.
* The Company want CO2 emission level at 30% lower so the center is working on alternative of fuels, including CNG, LPG, Bio-Diesel ,Compressed-Air, and Electric cars.
3. Physical Location
The
Company manufacturing and design and
engineering center located around the
world.
The
company takes all advantage of location ‘s weather ,nature climates, fire
,theft ,mechanical failure and similar risk
in development of parts.
Company
more focusing on recruitment process and
find good candidate who know good grip on languages.
Company
focuses on find location from where the shipment is done easily.
4. Government Policies
Company
engaged with range of policy maker at UK
and other country where company ‘s
business expands more .
The
Executive of company meet ministers and member of parliament ,environment
committee , other officers of company continuously for business obstacles.
We
engage with universities, government , working social activities helps the
culture of country and economy and the
company get incentive in taxes in countries.
Company constantly
keep eye on policy change by government which it suits best for us to
import and export. Also outsourcing chipper.
5. Supply Chain Defects and Recalls
Life
cycle of the company
The
Company monitors performance of its dealers and distributors.
This
is expected to enable them to provide support.
Under
the influence of any of the company’s sales operation and results of operations may be affected
adversely.
Any
significant problems affecting the results of operations and the costs of the
components of the ingredients, or impairing the availability of timely, could
continue to rise.
This
is the biggest factor that effect the all supply chain of the business and the
profit of the company.
The
question of the safety or reliability of its vehicles and damaged the
reputation of the product and therefore the impact on demand may cause the
company’s customers to remembers.
6. Innovation and Competition
Global
industry is highly competitive and intense competition worldwide. Automotive
industry is constantly in view of
globalization and consolidation.
Competition is especially likely to
§ The increase in premium auto motive.
§ Product excellence and features.
§
Innovation and time to produce new product.
§
Ability to pricing ,control cost, reliability, safety, customer service, fuel
economy and financing terms.
Accept new technology and understand its requirements implement it to fulfill
customers satisfaction.
