Published by MBA Skool Team, Last Updated: April 04, 2021
PESTLE Analysis of Bugatti analyses the brand on its business tactics. Bugatti PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as Bugatti, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
Let us start the Bugatti PESTLE Analysis:
The political factors in the Bugatti PESTLE Analysis can be explained as follows:
Bugatti being a global car manufacturer brand has business worldwide. The different policies, rules and guidelines of different countries is applicable to this auto company. The political stable environment in a country can boost the economy and thereby eventually sales for luxury items like a high-end car by Bugatti. The imposed tariffs and taxation system on the buyers and manufacturers of cars is a big factor which impacts the sales turnover and profit for this company. Many governments have announced a rebate on buying new cars upon scrapping an old one. The subsidies and incentives on the alternative E-vehicles segment is a big threat and competition for the car brand. In the coming times, the tax rate cut on petrol and diesel to boost car sales is another step to drive the purchasing behavior. It has an impact on the business strategy of this company and can bring an opportunity in emerging economies. Working in alignment with the Government set guidelines can reduce red tape to operate profitably with good market share.
Below are the economic factors in the PESTLE Analysis of Bugatti:
There are many economic factors which can change the micro and macro environment tremendously.
Factors such as inflation, recession, income level, import- export duties, currency exchange rate etc. influence the purchasing power and the sales for luxury high end car maker Bugatti. The recession and rising oil prices have an impact on the sales for cars. Bugatti is majorly catering to high end wealthy consumers worldwide. It has an opportunity here to segment its cars in terms of price and quality according to consumer needs. Like its competitors it can cater to emerging economies. This has a huge growth potential in the long run.
Following are the social factors impacting Bugatti PESTLE Analysis:
The lifestyle choices are majorly affected by society and the people around. The demographic components like the age factor, gender, education and income level etc. impacts the consumer decision making process for purchasing. With the rising disposable income, people want to lead a comfortable and luxurious life. The Bugatti cars are highly expensive and bought exclusively by wealthy businessmen and high-end professionals globally. For e.g. In India itself, there are a very few individuals who own this branded car exclusively. It makes them feel apart and shows their high social status and class. This car brand has focused differentiation business models catering exclusively to a small segment. It can diversify its cars portfolio to compete with brands having different business models. It can leverage this opportunity to get more customers and market share in a big market like India.
The technological factors in the PESTLE Analysis of Bugatti are mentioned below:
Technology and Bugatti go hand in hand. This is imperative for this car manufacturer to bring new technological innovations in its cars on a regular basis to maintain its brand equity. Its high-speed supercars with ultimate horsepower engines, aerodynamics, tires, the unmatched sophisticated design etc. make this car maker stand tall among its competitors. It has a big competitive advantage with its research power and development capabilities. It was the first manufacturer of a seven-speed variant of Dual clutch gearbox which is considered as the fastest in the world. In the automotive industry, this company is the only one to use 3D printing for production and its processes. Technical innovation is one the unique selling proposition for this car brand worldwide. This gives it a monopoly and hence higher profit margins.
This also offers it a loyal customer base with high performance and sales.
Following are the legal factors in the Bugatti PESTLE Analysis:
It is critical for a car brand like Bugatti to prepare for various laws considering quality of the car and safety of passengers as per global standards. Laws which affect the company deal with environment, safety and tax manufacturers have to follow, depending upon the countries and markets of business operations. The customer safety rules and regulations mandated by law for safe driving should be adhered to. Many laws like cybersecurity, data privacy etc also have to be looked at by a car brand like Bugatti. The use of AI and machine learning in capturing the data for fraudulent and illegal practice can hamper the brand image. Even laws related to trademark and copyright play a significant role to avoid any court disputes. Following the policies & guidelines laid down by legal institutions will help the brand grow even further.
In the Bugatti PESTLE Analysis, the environmental elements affecting its business are as below:
As environmental factors related to low carbon & greenhouse emissions are increasing globally, it becomes necessary for the company to plan its business operations accordingly. Bugatti has a range of high premium super speed cars and it is planning to launch an E-car for less than 1 M euros.
This company is very much environmentally friendly in its operations as well as its vehicles. These factors play a wide role as consumers today are looking for tax rebates as well as less polluting vehicles. Hence, the company has the opportunity to grow its market share substantially as compared to its competitors in this domain.
To conclude, the above Bugatti PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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