UNIT 2- Macro environment

Question 1

Layers of the business environment (circle model)

Answer 1

Inner circle- The organization
Second circle- Competitors and markets
Third circle- industry (or sector)
Last circle- The macro environment

Question 2

The macro environment “models”

Answer 2

• PESTEL
• Key drivers
• Scenarios

Question 3

Key drivers

Answer 3

… are environmental factors used to construct alternative scenarios and that are likely to have a high impact on the success or failure of a strategy.

Question 4

Scenarios

Answer 4

… are detailed and plausible views of how the business environment of an organization might develop in the future. It is a method of projections, and it does not try to show an exact picture of the future. Scenario analysis doesn’t make extrapolation of the past.

Identify strategic groups, market segments and critical success factors to recognize gaps and opportunities

The future can not be predicted, the only thing we can do is make possible scenarios

Question 5

PESTEL

Answer 5

Political- ax policy, labor law, environmental law, trade restrictions, tariffs, and political stability

Economic- economic growth, interest rates, exchange rates and the inflation rate

Social- cultural aspects, population growth rate, age distribution, career attitudes and emphasis on safety

Technological- R&D activity, automation, technology incentives and the rate of technological change

Environmental/ethical- weather, climate, and climate change => affect industries such as tourism, farming, and insurance

Legal- include discrimination law, consumer law, antitrust law, employment law, and health and safety law

Question 6

Scenario analysis

Answer 6

• Company, business scope, time horizon
• Key decision variables;
• Identify the stakeholders, roles and power;
• Construct two or three plausible scenarios;
• Identify key trends and environmental factors that may be influence by each scenario;
• To evaluate the internal impact of scenarios;
• Analyze the dynamics of the scenarios anticipating the
  actions of the agents;
• Formulate strategic alternatives (anticipate actions for each scenario)

Question 7

Scenario analysis- results

Answer 7

Positive, neutral or negative

Best case, worst case and most probable case