Chapter 4- Macro Environment
- Created by: Katevs99
- Created on: 23-01-21 10:20
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- MACRO ENVIRONMENT
- BUSINESS ENVIRONMENT
- MACRO
- External factors that effect the overall environment that the business operates in.
- INDUSTRY
- Consists of external factors affecting the competitiveness of the industry
- INTERNAL
- Consists of the organisation'sown internal resources and capabilities
- MACRO
- PESTEL
- Analyses the macro environment as part of strategic planning to identify opportunities and threats
- Political
- Economic
- Social
- Technological
- Environmental
- Legal
- SCENARIO PLANNING
- Once the key factors that affect the industry have been idenitified, scenario planning can be used to consider future responses
- DEFINITION
- Concerns the development of pictures of potential futures for the purpose of managerial learning and the development of strategic responses
- PORTER'S DIAMOND
- DEFINITION
- Can be used to explain why some nations have a competitive advantage in certain industries
- Demand Conditions
- Demanding local consumers force firms to be more innovative
- Trend setting customers help local producers to anticipate future global trends
- Related and supporting industry
- Proximity of related and supporting industries leads to:
- Easy access to components, with reduced lead times and carriage costs
- Encourages knowledge sharing which increases innovation
- Proximity of related and supporting industries leads to:
- Factor Conditions
- The availability of the factors of production
- E.g. human resources, physical resources, knowledge, capital and infratructure
- The availability of the factors of production
- Strategy, structure and rivalry
- Two possible advantages:
- Strong domestic rivalry forces local firms to become more efficient to survive.
- Strategies or structures that have become prevalent in a particular nation may give advantages in particular industries
- Two possible advantages:
- DEFINITION
- BUSINESS ENVIRONMENT
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