chapter 1 internal external env

8/2/2019 Chapter 1 Internal External Env

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Macro Environment = General/Remote

Environment

The macro forces are generally moreuncontrollablethan micro environment.

Success of an organization depends uponits adaptability to the environment.

Exampleof cost of imported component

going up because of depreciation of the

domestic currency, solution may lie with

domestic manufacture of the component.


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THE MACRO ENVIRONMENT

The far or macro environment relates to:

Political Economic Global Environment

Socio-CulturalTechnologicalEnvironmentalLegal

These influences may impact your business,

now or in the future.


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Political influences relate to government or

constitutional policies that may affect yourbusiness.For example, potential government

legislation may allow businesses to registerthat they do not want to receive unsolicitedcalls. This may restrict cold calling on abusiness to business basis.

The expansion of EU boundariesmayhave an impact on certain businesses.

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Economic

Economic influences relate to the economy as a whole.

Rates of interesthave an impact for example onlevels of borrowing.

The strength of the stock markethas an impact ontypes of investment made.


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Socio-cultural

class age gender demographics

issues such as culture-both local & international diversity.

For example drinkinghabitsof people in

France are differentto those in the UK.


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TECHNOLOGICAL


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use of the internet.

advances in mobilephones.

Bluetooth.

wireless networks.

data management.

customer relationship

management systems.

Technological influences include


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TECHNOLOGICAL FACTORS


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Many businesses areimpacted today by

environmental issues.

Corporate socialresponsibility is now

higher on the public'sagenda.

Organizations such as

Shell and Nike havebeen affected byadverse publicityrelating to

environmental issues.


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Legal

Legal constraints also

affect businessperformance.

The Working TimeDirective, PaternityLeave and MinimumWage are examples ofthis.

In certain industriesthere are legalconstraints imposedbyregulatory or watchdog

bodies.


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The gaming industry is an example of one sector which has been

impacted by changes in the far external environment. Traditionally

betting shops such as William Hill have always been a 'horses and

dogs' business. As recently as 1999 this made up 80% of its

business. The proliferation of sports and topics that people can now

place bets on has led to huge changes in the world of

gambling. The twin forces of technology and deregulation have also

altered things. Gamblers can now place bets on the internet, via

interactive TV, on WAP-enabled mobile phones, via high street

shops or call centers. Bookmakers now open on Sundays and in the

evenings to cater for different work and leisure patterns. There are

proposals on the table to further modernize the gambling laws in this

country which relate back to 1960s license and regulate the industry.


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Microsoft Antitrust Case

The government viewed Microsoft as a paranoidmonopolist, someone who gets up in the middleof the night and shoots at any movement.

-Harry Edwards, Chief Judge, US District Court

for Appeals for the District of Columbia.

"The Sun was definitely shining in Seattle.Today's ruling really does go a long way toward

positively resolving this matter for Microsoft, forour customers, partners, and shareholders."-Steven Ballmer, CEO, Microsoft, commenting on

the US Court of Appeals for the District ofColumbia reversing the District Court ruling thatMicrosoft be broken into two companies.


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MICROSOFT - A MONOPOLY?

In the late 1990s, as Microsoft was preparing to enter the

new millennium, the company was fighting the anti-trustproceedings initiated against it by the US government.One of the main charges against Microsoft was that itwas distributing its Internet browser software, InternetExplorer (IE), free of cost along with its WindowsOperating System. Microsoft was a late entrant into the

Internet software market. Subsequently, it adoptedaggressive marketing tactics to catch up with the earlyentrant, Netscape Communications.

Netscape protested against Microsoft's move calling it anattempt to shut out other software that competed on a

stand-alone basis. Another important charge againstMicrosoft was that it had modified Sun Microsystems'Java language in order to make it Windows compatible.


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Some analysts argued that the overwhelming marketshare that Microsoft held was a major impediment toinnovations in the software industry. Microsoft wasnot only a leading player, but also the standards

provider for the industry. By controlling thestandards, the company was in a position to curbinnovations. Microsoft, however, maintained that itsdominance of the market was due to its superiorproducts and not because of any unfair market

practices.

In 2000, the US Department of Justice (DOJ) ruledthat Microsoft be split into two smaller companies toprevent it from indulging in anti competitive

practices. However, in June 2001, the US Court ofAppeals reversed this ruling, but said that Microsoftdid have a monopoly in the market and had violatedUS antitrust laws. In August 2001, Microsoftappealed to the US Supreme Court to overturn theruling that Microsoft was an illegal monopoly. A final

verdict on the case was expected by October 2001.


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THE TRIAL BEGINS

In October 1997, the DOJ began antitrustinvestigations to determine whether Microsoft wasviolating a 1994 consent decree by compelling PCmakers to ship its Internet browser free with

Windows 95. Joel I. Klein, Assistant Attorney General for the

antitrust division, remarked, "This kind of product-forcing is an abuse of monopoly power--and we willseek to put an end to it." Justice Thomas Penfield

Jackson of the US District Court heard the case and,in May 1998, gave both the parties five months togather 12 witnesses each, and to fight the suit.


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?? Questions to Ponder ??

chapter 1 internal external env

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