Alfa Romeo – an iconic Italican car founded in 1910. The brand is well renowned for high performance, engineering abilities, and a unique Italian design. They’re a successful company with operations in both racing and consume automobiles, so let’s take a look at the latter in terms of a SWOT, a PESTLE and a Five Forces analysis.
PESTLE Analysis for Alfa Romeo
Political
- Brexit impacting trade deals
- Higher tax charges for vehicles with high CO2 emissions
- WLTP legislation (Worldwide Harmonised Light Vehicle Test Procedure) to become stricter
Economic
- Fluctuation of fuel prices impacting consumer choice
- Recession or economic difficulty impacting luxury purchases
- Higher import duties and extra administrative costs after Brexit
Social
- Increasing digital buying trend
- Brand engagement on social now an expectation
- Growth of ride sharing market
Technology
- Increasing artificial intelligence and augmented reality features
- Development of new recycling technologies
Legal
- Safety laws impact production
- Employee wellbeing and local employment law
Environmental
- Electric vehicle trend increasing
- Rising interest in business sustainability
- Pressure by some cities to reduce car usage
Read the Ultimate Guide to PESTLE Analysis.
Five Forces for Alfa Romeo
Industry Rivalry: High
- Approximately 8 automotive manufacturing groups offering EVs in their range
- Low levels of differentiation
- High exit barriers due to high initial capital investment
Threat from New Entry: Low
- High entry barriers
- Large capital requirements
- Costly production due to difficulty in achieving economies of scale
- Strict government regulations
Threat from Substitutes: Medium
- Customers living in urban centres switching to public transport
- Private systems like Uber increasing in availability
Threat from Suppliers: High
- Number of lithium ion battery suppliers is limited
- High switching costs
- Long process to switch
Threat from Customers: High
- High power due to wide vehicle offering
- Reasonably easy to switch between suppliers
SWOT Analysis for Alfa Romeo
Strengths
- Competitive advantage in engine performance
- Strong knowledge of loyal customer base
- ‘Made in Italy’ brand
- FCA Group ownership
- Partnership with Enel X and ENGIE
Weaknesses
- Lack of R&D
- Limited brand awareness and global recognition
- Slow adaption to EV trend
- Limited market sensing skills for new customers
Opportunities
- Arising trend of purchasing vehicles online
- Customer preferences switching to EVs
- Rising interest in business sustainability
- Higher importance given to vehicles’ technological features
- Development of artificial intelligence and augmented reality
Threats
- Higher import duties and price sensitivity after Brexit
- Increasing tax charges for vehicles with high CO2 emissions
- Rapid growth of ride-sharing market
- Public transport substitution
Read the Ultimate Guide to SWOT Analysis.
