What is the macro environment?
-Businesses have no control over what happens in this environment
-Businesses develop strategies to combat what happens in this sector
What are the factors of the macro environment?
-Political
-Economic
-Social
-Technological
-Legal
-Environmental
-Ethical
Political factors
-Political development within the country that affects the business
Economic factors
-Economic factors that could impact the business
eg, Interest and exchange rates
Social factors
-Social factors that could have an impact on the:
-Standard of living
-The quality of life
-Disposable income
-Levels of community
Technological factors
-Technology is developing at a rapid rate
-Businesses need to stay up to date with new technological trends
Legal factors?
-The law within the country and how they affect the business
Environmental factors?
-Physical factors, such as pollution, and how they impact the business
Environmental analysis (Micro)
Focuses on: Strengths and weaknesses
Environmental analysis (Market)
Focuses on: Opportunities and threats
Environmental analysis (Macro)
Focuses on: Opportunities and threats
What are the characteristics of the different environments?
-Complex
-Multifaceted
-Dynamics
Complex as a characteristic of an environment
-Environments are ever-changing due to the competitive and hostile nature of the environments
-Business has limited resources, and when different stakeholders demand the same resources, this complicates the allocation of resources
Multi-faceted as a characteristic of an environment
-A business competes and grows within the different environments.
-Management has to consider the numerous ways in which decisions will affect the various stakeholder group
Dynamics as a characteristic of an environment
-Constant change
-Business must have a flexible approach when dealing with developments of anomalies in the environments.
-Contingency plans are vital
-Business must remember that competitors are also exposed to the same dynamic environments so it is important to find creative and innovattive ways to shape stratergies to deal with these factors
