It is March 2023, the world is recovering from the pandemic, there is war raging in Europe, and there are trade and political tensions across the world. You are
advising Volvo, an electric car manufacturer. Volvo is based in Sweden, is a subsidiary of Geely, a Chinese company, and operates manufacturing plants in a
number of countries.
The four scenarios below are hypothetical. Your answers must be reasoned and supported by your academic readings but you can also refer to news reports
and analyses.
Task 1
Your first task is to provide a summary note on the position of an electric car manufacturer against the broader political and economic global context. In
particular you must highlight the main challenges and opportunities that a company like Volvo is facing. +300 words
The electric car industry faces a variety of challenges and opportunities in the current global context. The world is still recovering from the pandemic, with increased levels of trade and political tension across the world. Additionally, there is war raging in Europe, creating uncertainty and instability for electric car manufacturers such as Volvo.
In terms of challenges, volatility in financial markets has caused a decrease in investment levels. This may affect Volvo’s ability to produce new models or enhance existing ones due to decreased capital flow. Furthermore, supply chain disruptions have been commonplace during this period which could lead to higher costs for importing parts for their cars or even an inability to acquire certain components necessary for production.
In addition to financial challenges, it is also important to consider geopolitical tensions when assessing the electric car industry’s position. In particular, Volvo’s parent company Geely being Chinese creates potential risks associated with sanctions or other restrictions imposed on Chinese companies by foreign governments that may limit access to key markets such as Europe or North America. Moreover, if Sweden were ever annexed by another country due to conflict – as was experienced during World War II – then its market presence would be significantly diminished which would pose a major threat not only for Volvo but all other Swedish companies operating in that region.
Despite these challenges there are numerous opportunities present within the current economic climate which can be leveraged by Volvo and other electric car manufacturers alike; most notably those associated with sustainability initiatives globally related carbon emissions targets . With this shift towards more sustainable practices come government incentives that incentivize businesses into transitioning away from fossil fuel powered vehicles towards hybrid/electric solutions instead; something that should benefit any firm looking at moving away from traditional automobiles as they look towards diversifying their range of offerings going forward into 2025-2030 timeframe (e..g tax credits or subsidies). Moreover changes made now will enable them take advantage of first mover benefits when producing clean energy vehicles before their competitors do so allowing them greater success if done right and allowing them greater success if done right . Finally increased public awareness regarding the environment , specifically air pollution means people are becoming increasingly conscious about what kind of vehicle they buy increasing demand leading automakers like volvo capitalize off this trend & offer more eco friendly options .
Overall while there are risks involved especially geopolitically , there are also many opportunities available through leveraging sustainability initiatives along with innovation & technology advancements enabling firms like Volvo make strides within this sector moving forward .