Answer to Question #228863 in Macroeconomics for Fortune

Question

List four factors in the Macro environment and explain how these external forces can influence Volkswagen in any way

Answer 1

Technological factors

Inventions in technology are changing the way Volkswagen is operating currently and how it operates in the future. The manufacturing of engines is being revolutionized. Volkswagen is advancing innovations of machines that are environmentally friendly. This has necessitated capital investment in those inventions by Volkswagen. Inventions of green vehicles are now famous have necessitated Volkswagen to embrace the technology to remain relevant in the competitive and dynamic global markets.

Economic factors of changes in interest rates and exchange rates

Changes in the rates of interest and exchange rates are indeed having a significant impact on Volkswagen. These changes dictate at what selling price Volkswagen sells their products in various markets and countries. The phenomenon has affected the profitability of Volkswagen greatly.

Global climate

Global climate concern is at the moment a major global issue that all manufacturers have to deal with. Volkswagen's manufacturing business is equally affected by the current global climate concern as it is a big manufacturing company. Global climate concerns have necessitated the company to take measures to make their contributions to various global climate campaigns geared toward regulating climate change.

Demand and supply factors

The survival of Volkswagen for the foreseeable future is affected by the demand and supply forces as the significant macro-environmental factors that determine if it remains in business. Volkswagen makes their decisions in terms of the sources of the raw materials they use in their manufacturing process and the market demand forces for their products. These decisions are fundamental in ensuring that the company maximizes its revenues.