Chapter 3 - Macro-environment analysis

Question 1

Macro-Environment

Answer 1

Consists of broad environmental factors that impact many organizations, industries and sectors.

Question 2

Industry or sector

Answer 2

Includes competitors, markets and ecosystems within the industry or sector.

Question 3

Macro-environmental analysis

Answer 3

Identify the key drivers for change, to trace these drivers to → industries or sectors, and then to consider implications for the strategies of → specific organizations

Question 4

PESTEL

Answer 4

1. Political
2. Economic
3. Social
4. Technological
5. Ecological
6. Legal

Question 5

Political

Answer 5

the role of the state and other political factors in the macro-environment. Two important steps in political analysis:

1. First, evaluating the importance of political factors
2. Second, carrying out political risk analysis.

Question 6

Economic

Answer 6

Macro-economic factors such as currency exchange rates, interest rates and fluctuating economic growth rates around the world.

Question 7

Social

Answer 7

Social macro-environmental elements

Question 8

Technological

Answer 8

Tech innovations as metaverse, nanotechnology or blockchain, whose impacts can spread far beyond single industries.

Question 9

Ecological

Answer 9

ecological macro-environmental issues, such as pollution, waste and climate change.
* Threat: Penalties for pollution,
* Opportunity: if you sell renewable energy.

Question 10

Legal

Answer 10

• Opportunity: looser regulation helps innovation
• Threat: tobacco regulation.

Question 11

Forecasting

Answer 11

Evaulate different approaches to environmental forecasting.
Three different forms of forecasting:
1. Single-point forecasting - when the organization is so certain about the future that they only provide one possible forecast.
2. Range forecasting - when organizations have less certainty about the future they provide a range of different outcomes, with different degrees of possibility.
3. Multiple-futures forecasting - even less certainty, a set of very distinct possible futures, either they happen or not, very radical and uncertain.

Question 12

Directions of change

Answer 12

Megatrends
* Large-scale political, economic, social, technological, ecological or legal movements that are typically slow to form, but that influence many areas of activity, possibly over decades. Influence so many other things.
Inflexion points
* Moments when trends shift directions.
Weak signals
* Advanced signs (unstructured and fragmented bits of information) of future trends and are particularly helpful in identifying inflexion points.

Question 13

Scenario analysis

Answer 13

Construct alternative scenarios in order to address possible environmental changes.

Question 14

Five steps of scenario analysis

Answer 14

1. Define scenario scope
2. Identifying the key drivers for change
3. Developing scenario stories
4. Identifying impacts
5. Monitor progress