Block 2 Flashcards
Macro environmental analysis components?
Political factors Economic factors Sociocultural forces Technological factors. Environmental forces Legal and regulatory factors.
Environmental forces?
These include ecological and environmental forces such as weather, climate, climate change and associated factors like water shortages. These factors can be directly impact industries such as insurance, farming, energy production and tourism. They may have an indirect but substantial effect on other industries such as transportation and utilities.
Political factors.
These factors include political policies including the extent to which a government intervenes in the economy. They include such matters as tax policy, fiscal policy tariffs the political climate and strength of institutions such as the federal banking system. some political policies effect some industry more than others. an example is energy policy which affects energy producers and heavy uses of energy more than any other types of businesses
Economic conditions
Economic conditions include the general economic climate and specific fraction such as interest rates, exchange rates, the inflation rate, the unemployment rate, the rate of economic growth, trade deficits or surpluses, saving rates, and per-capita domestic product. Economic factors also include conditions in the markets for stocks and bonds, which can affect consumer confidence and discretionary income. Some industries, such as construction, are particularly vulnerable to economic downturns but are positively affected by factors such as low interest rates. Others, such as discount retailing, may benefit when general economic conditions weaken, as consumers become more price-conscious
Sociocultural forces
Sociocultural forces include the societal values, attitudes, cultural influences, and lifestyles that impact demand for particular goods and services, as well as demographic factors such as the population size, growth rate, and age distribution. Sociocultural forces vary by locale and change over time.
Technological factors
Technological factors include the pace of technological change and technical developments that have the potential for wide-ranging effects on society, such as generic engineering and nanotechnology. They include institutions involved in creating new knowledge and controlling the use of technology, such as R&D consortia, university-sponsored technology incubators, patent and copyright laws, and government control over the Internet.
Legal and regulatory factors
These factors include the regulations and laws with which companies must comply, such as consumer laws, labour laws, antitrust laws, and occupational health and safety regulation. Some factors, such as banking deregulation, are industry-specific. Others, such as minimum wage legislation, affect certain types of industries (low-wage, labour-intensive industries) more than others
