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Changes in economical political, legal and social factors Essay

Economic Factors

During the economic growth, the automobile industry was also growing, and Ford’s business expanded rapidly, and the demand for their products increased as people could afford luxury goods. During these times, customers could afford more so Ford was bringing out newer more expensive models. During the recession, Ford sold off its subsidiaries to cut its losses. As the customers had less money, they will buy less, so Ford reduced the numbers of cars it was produced.

Political Factors

The government created a new scheme where people could scrap their old cars for cash, and have money for a new car. This helped Fords make a number of sales in the recession other Political factors that influence the strategic planning of Ford motor since government laws and regulations are concerned with the production of more eco-friendly automobiles. Due to the environmental concerns, the industry has to abide with the regulations aimed at reducing the pollution levels. When the recession ends, Ford’s sales will rise due to people spending their money on luxury goods that don’t affect the environment as badly.

Legal Factors

In the future, there will be new laws that will raise the minimum wage, which will change many pay schemes of Ford’s employees which will reduce its annual profits and may force it to change its business approach. For example, Ford may have to change its suppliers to cheaper options to combat the losses it will have due to the wage rise.

Social Factors

If society changed, and driving eco-friendly cars became a global trend, this would mean that Ford would have to design and produce a new model of car to join in on the profits of this trend. The problem with this is that the sales of other Ford models would suffer as they will seem old fashioned and unfriendly on the environment. To combat the losses they will get on their older models, they will cut production levels by a high a percentage of even entirely to stop the losses.


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