Introduction: Buckingham Ford
Buckingham Ford is the leading car dealership company in Buckingham. The company deals with the sale of new Ford vehicles as well as the buying and selling of used cars (Boudreau, 2010). The company is located at the heart of Buckingham town at garage that has been operational since the late 19th century. The garage was founded by Philip and Sons in 1888 (Buckingham, 2012). Manufacture and repair of horseless drawn carriages were the main function of the garage during its early days of inception. In addition, the garage also manufactured road vehicles. The Philip family owned the business for three generations. However, in 1996, the business was bought by Redding and Redding Company. It is here that it was named Buckingham Ford.
The garage is located along Ford Street near the Buckingham football grounds. It covers a huge area that is capable of accommodating hundreds of vehicles at a given time. Buckingham Ford is the only car dealership within its locality where an individual can purchase a new Ford vehicle. In addition to this, the garage is involved in the buying and selling of second hand vehicles. Despite the fact that the garage is a Ford franchise, it also buys, sells, and repairs cars, and light commercial vehicles of other brands and body types. Other services that the garage offers include:
- Fitting of tyres
- Fitting of exhaust pipes
- Fitting of motor vehicles parts and accessories
Other than this, the garage also has an accident repair centre that has state of the art equipment and qualified personnel who are capable of undertaking any type of repair work ranging from severe crushes to minor body works and paint jobs. The operations of the garage have been sustainable for the last 17 years. It is due to the effectiveness and efficiency of its operations coupled with the understanding of the market needs and expectations that has led to the success that Buckingham Ford is currently enjoying.
PESTLE Analysis
To understand the operations of a business entity relative to the market, it is essential to conduct several analyses. This is essential as it brings about a clear understanding of the factors that affect the operations of a business. These factors can be either exogenous or endogenous (Harvey, 2010). Once these analyses have been conducted and a clear understanding of the market and the industry is arrived at, a firm stands a better chance of formulating and implementing strategic plans that will ensure that its operations are effective and efficient hence making it to be profitable and sustainable in the short run and the long run (Mullins, 2008).
PESTLE analysis is one of the business analyses that a business should conduct to have a clear understanding of its market. This analysis normally focuses on the external factors that affect a business entity. These factors are:
- Political
- Economic
- Social
- Technological
- Legal
From the analysis of these factors, it is evident that PESTLE analysis is used to analyze the factors that affect the operations of a business at a macro-environment level.
In the course of its operations, several political factors affect how a business entity operates. These political factors are essential as they normally dictate how an organization is run and the regulations that it has to follow. Political stability of a region is of great concern to the prosperity of a business entity (Maney, 2003). Business entities that operate in regions or nations that are characterised by civil wars, terrorism and related acts stand a low chance of being successful. This is due to the high risk factor that such businesses are related with. On the other hand, businesses that operate in a relatively peaceful environment stand a higher chance of success. On the other hand, the impacts and reputations of politicians towards a business entity are also essential, as it will determine the kind of reputation that a specific business entity will be related with. It is thus due to these facts that managers of business entities ensure that their businesses are only associated with renowned politicians and public figures within the society.
Prevailing economic factors also play an essential role in the performance of an organization (Buckingham, 2012). These economic situations may be of a specific locality, region, nation, or the globe at large. Economic growth is an essential aspect that affects the operations of an organization. The level of economic growth determines the level of investment that a specific business has, the income that individuals of a given region have, and the purchasing power of the market. The prevailing economic conditions also affect the interest rates, exchange rates and the inflation rates. If a nation or a region has a stable economy, interest rates on loans are always kept a low level. This increases the availability of capital and increases the purchasing power of customers. At the same time, the exchange rates are stable, and the inflation rates are minimal. However, during harsh economic situations, the interest rates and inflation rates rise while the exchange rate become unstable. This increases the overall prices of goods and services, reducing credit availability hence reducing the purchasing power of customers. This in turn reduces the level and extent of business activities in the affected area (Bradford, 2011).
Social factors are also essential in determining the operations of a business in the short run and the long run. Social factors of a given locality, nation or region are determined by its demography and cultural aspects (Lesser, 2007). In the operations of a firm, social factors are essential as they determine the size of the market, its segmentation, and viability. At the same time, social factors are essential as they determine the needs, tastes, preferences, and expectations of a given market. This information is essential as it ensures that the goods and services that firms provide conform to the needs and desires of customers. Age composition, population growth rate, health consciousness, and career distributions are but some of the social factors that affect the operation of business entities at a macro-environment level.
Technology is also a key determinant in the operations of business entities. Businesses operate in a dynamic environment. The tastes and preferences of customers always change with time. Additionally, the factors of production also change. Therefore, to keep up with this pace, businesses normally come up with creative and innovative technologies that ensure that their operations are cost effective and are capable of meeting the needs of their target market. This also ensures that they stand at a competitive edge over their rivals (Cascio, 2010). To achieve this, firms need to put a lot of emphasis on research and development, automation, and utilizing incentives in technology to the fullest (Cummings, 2009).
Finally, a business needs to operate within the legal constraints of the law. The government together with other official bodies normally come up with rules and regulations that have been set up to ensure that firms operations do not conflict with the rights and duties of individuals and the state (Antony, 2008). Due to this fact, firms must therefore operate within definite rules and regulations whose applications may be either formal or informal. This may be tax, labour or environmental laws and policies. Failure to adhere to these rules and regulations normally results to the breach of law that is punishable by the state via the court of law.
Factors that may Affect the Operations of Buckingham Ford
Buckingham Ford is a business entity that deals with the purchase and repair of automobiles. The firm operates in Buckingham, a relatively small upcountry town. According to the 2001 census, Buckingham had a population of 11,572. In 2007, the population was estimated to be at 13,200 (Hemp, 2011). This therefore states that the region has a small market size as compared to other areas in England. In addition to the small market size of the region, other macro-environmental factors may affect the operations of the entity.
Economic factors are the factors that play a huge impact in the operations of Buckingham Ford. England had been experiencing a relatively stable economic growth especially since the early 2000s. However, since 2008, this rate started to decline. This was as a result of the economic crisis that had just hit the globe at that time. Due to its severity, its effects could be felt in almost each and every part of the world including Buckingham. All sectors of the economy from agriculture to tourism were affected. The automobile industry was not an exception.
The global recession that commenced in 2008 affected Buckingham Ford in the following ways. As a result of the economic crisis, the rate of economic growth declined. This reduced the value of the British Pound in comparison to other foreign currencies resulting to inflation. Therefore, the purchasing power of consumers declined during this period. To solve this problem, lending rates were increased. This reduced the availability of credit to customers as well as the firm to make capital investments. As a result, the annual sales of the company declined reducing its profitability. Due to the prevailing unstable economy, individuals normally opt not to spend on luxurious items such as cars. This has further reduced the sales of the company.
Technology is also another factor that plays a critical role in ensuring that the operations of the firm are effective and efficient. Technology has found a wide application in the firm. To be specific, Buckingham Ford has incorporated the use of IT and ICT in its operations. The company has adopted and implemented an inventory software system that makes it easier for the management to maintain the records with regards to the vehicles that are present at the garage. While using this system, the management and other employees can know the number of vehicles that are present at the garage, their status (whether a vehicle is new or second hand or it is for sale or repair), their prices, amount paid, accruals and so on. This has made it easier for the organization to maintain and update its records. The firm has also adopted and implemented the concept of e marketing. Buckingham Ford has a website that contains all the details of the company. This includes its history, vision, mission, services and products, contacts and directions. This has made it easier for customers to get in touch with the company. At the same time, the company is also using social media and other forms of e marketing strategies to market its products and services. Buckingham Ford has posted its adverts on social network sites such as Facebook, Twitter, MySpace and Youtube. At the same time, it has fun pages in these social network sites. This has made it easier for the company to get in touch with its customers and the market. As a result, the firm has developed a clear understanding of the needs and expectations of its customers and the market at large. This information has been essential in the development of policies and strategies that have resulted to the success that the firm is currently enjoying.
Finally, the operations of Buckingham Ford have been sustainable due to the relative political stability of the region. Buckingham has been enjoying an atmosphere that is characterised with peace and security. No major demonstrations have been reported in the region in the last several years. In addition, insecurity in the region is at a low rate. This provides a conducive environment for the firm to operate in. The security of the capital investments of the firm has always been guaranteed. All these factors have played a critical role in determining the performance of the firm within the region.
As a result of political influence, the town of Buckingham has developed several rules and regulations that govern the operations of businesses. These laws protect all the businesses from theft and other related fraudulent activities. At the same time, the local authorities have enacted laws that protect properties owned by businesses and the same time, it protects the rights of workers who work for various firms including Buckingham Ford (Buckingham, 2012). The respect for property and workers rights have ensured that Buckingham Ford owners and employers have respect for one another leading to a favourable working environment.
Conclusion
Buckingham is a small town in England. The town has several business entities that range from production to catering. Car purchase and rental services are also offered in the town. Buckingham Ford is the leading car sale and repair firm in the town. The business has been in operations since late 19th century up to the present date. However, the garage became a Ford franchise in 1996. However, the operations of the firms are affected by several factors especially at a macro-environment level. These factors may be political, economical, social, technological or legal. These factors are essential as they determine the strategies that the firm will formulate to be at a competitive edge over its rivals in the automobile industry. Economic, social, and political factors are the ones that have the most influence on the firms operations. It is due to this fact that the management should have a clear understanding of these factors to ensure that the operations of the firm are effective and sustainable in the short run and the long run.
References
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