chapter 5 environmental forces. demographic economic political cultural technology
TRANSCRIPT
CHAPTER 5CHAPTER 5ENVIRONMENTAL FORCESENVIRONMENTAL FORCES
ENVIRONMENTAL FORCES
• Demographic
• Economic
• Political
• Cultural
• Technology
DEMOGRAPHIC ENVIRONMENT
• Population
• Cohort Groups
• Family Structures
POPULATION TRENDS
• U.S. Population
• State Population
• Age Population
• Rural/Urban Population
U.S. POPULATION ESTIMATES
Category 2000 2050 White 69% 50% Hispanic 13% 25% Asian-American 4% 8% Black 13% 15% Other 1% 2% 100% 100%
STATE POPULATION CHANGE 2000 - 2010
AGE POPULATION GROWTH RATE2000 - 2010
Age Group % Growth Rate
5 - 17 + 8
18 - 24 + 8
25 - 44 + 3
45 - 64 +35
65+ +56
RURAL/URBAN POPULATION
Area 1960 2000Cities 32% 30%
Suburbs 31% 50%
Rural 37% 20%
% OF US POPULATION LIVING ON FARMS
1900 39%
2010 2%
HOUSTON CITY REDEVELOPMENTS
• Montrose
• Galleria
• Heights
• Mid-Town
MAJOR HOUSTON SUBURBS
• Woodlands• Kingwood• Katy• Pearland• Sugarland
COHORT GROUPS
• Baby Boomers 1946 – 1964
• Generation X 1965 – 1979
• Generation Y 1980 – 1995
• Generation Z After 1995
BABY BOOMERS
• Employment is for life
• Job status is important
• Many workaholics
GENERATION X
• Latchkey kids era
• Less interested in status symbols
• Lack of company loyalty
GENERATION Y
• Comfortable with diverse ethic groups
• Not very brand loyal
• Little company loyalty
GENERATION Z
• Want instant action and satisfaction
• Communicate through social media
• Always had iPads and smart phones
SUPPORT FOR SAME SEX MARRIAGE
Category 2003 2013
Baby Boomers 33% 38%
Gen X 41% 49%
Gen Y 51% 70%
FAMILY STRUCTURES
• Traditional Family Household
• Married Couples Working
• Married and Unmarried Households
TRADITIONAL FAMILY HOUSEHOLDS
• Working Father • Stay-at-home Mother• School-age Children % of Households 1950 70% 2010 5%
MARRIED COUPLES WORKING
Year Single Earner Multiple Earners
1960 68% 32%
2000 34% 66%
MARRIED AND UNMARRIED HOUSEHOLDS
• Average age of first marriage
• Changes in marriages
• Diversity of unmarried households
AVERAGE AGE OF FIRST MARRIAGE
Sex 1960 2010
Female 22 28
Male 24 30
CHANGES IN MARRIAGES
Category 1960 2010
Adults Married 72% 52%
Adults Divorced 5% 14%
High School or Less Married 72% 48%
DIVERSITY OF UNMARRIED HOUSEHOLDS
• Cohabitation
• Longer Life Spans
• Increased Divorces
ECONOMIC ENVIRONMENT
• Two Important Economists
• Role of Competition
• Major Anti-Trust Laws
• Creative Destruction
TWO IMPORTANT ECONOMISTS
• Adam Smith
• Joseph Schumpeter
ADAM SMITH
• Self-interest of sellers will lead to the greatest economic wealth.
• Competition keeps sellers from making excessive profits.
ROLE OF COMPETITION
• Government Viewpoint:Maintain a healthy, competitive economic system
• Seller Viewpoint:Achieve a sustainable competitive advantage
• Buyer Viewpoint:Wants perceived value for their money
MAJOR COMPETITION
• Direct Rivalry Kroger vs. HEB
• Buyers McDonald’s vs. Bakery
• Suppliers Randalls Cola vs. Coca Cola
• New Entrants Google vs. Apple
DIRECT RIVALRY COMPETITIONIN 2014
• Apple
• Amazon
MAJOR ANTI-TRUST LAWS
Sherman Act - 1890• Monopoly is illegal• Restraint of trade is illegal
Clayton Act - 1914• Predatory pricing and tying agreements are illegal
if they substantially reduce competition
CLAYTON ACT - 1914Various activities are illegal if they substantially reduce competition
• predatory pricing
• tying agreements
• exclusive dealings
• merge companies
ANTI-TRUST ACTIVITY EXAMPLES
• Beer industry
• Airlines
• E-Book pricing
JOSEPH SCHUMPETER
• Innovative and creative products will destroy or replace many existing products.
• This economic process is called “creative destruction”.
CREATIVE DESTRUCTION MANAGERS
• Jeff Bezos
• Sergey Brin & Larry Page
• Steve Jobs
• Mark Zuckerberg
CREATIVE DESTRUCTION PROCESSES
• On-line retailing
• On-line services
• Cloud computing
CREATIVE DESTRUCTION EXAMPLES
• Kodak
• Post Office
• Polaroid
POLITICAL ENVIRONMENT
• Political Levels
• Political Conflicts
• Political Consequences
POLITICAL LEVEL
• Local
• State
• Federal
• International
LOCAL POLITICAL ENVIRONMENT
• Health Department Regulations
• City Zoning Laws
• NIMBY Concept
NIMBY EXAMPLES
• Houston garbage in Ford Bend
• Zoning regulation in Houston
• Keeping Walmart out of a Houston Heights
STATE POLITICAL ENVIRONMENT
• Licensing for Professional Services
• State Automobile Laws
• Triple Distribution for Beer and Liquor
AUTOMOBILE LAWS IN TEXAS
• New cars cannot be sold directly over the internet in Texas
• GM cannot sell a new car directly in Texas
• No new cars can be sold in Texas on Sunday
FEDERAL POLITICAL ENVIRONMENT
• Federal Drug Administration
• Federal Reserve Board
• Federal Trade Commission
INTERNATIONAL POLITICAL ENVIRONMENT
• Tariff Restrictions
• NAFTA
• International Treaties
POLITICAL CONFLICTS
• Business vs. Government
• Business vs. Business
• Business vs. Consumers
• Federal Government vs. State Government
BUSINESS VS. GOVERNMENT
• FTC regulates false and misleading advertising
• OSHA, EPA, and the FDA are charged with regulating health and safety areas
• Federal Reserve Board makes monetary and fiscal policy decisions
BUSINESS VS. BUSINESS
• Sunday Blue Laws - many retail goods could not be sold on both Saturday and Sunday
• Banking, Insurance, and Brokerage firms could not own each other
• Out-of-State Wine Shipping Laws
BUSINESS VS. CONSUMERS
• A home buyer has 72 hours to reject a sale made in the home
• A law requires banks to clear consumer checks within a number of days
• A law requires credit card companies to give credit to women under similar conditions as men
FEDERAL GOVERNMENT VS. STATE GOVERNMENT
• State Internet Sales Taxes
• Medicare Payments
• Education Grants
POLITICAL CONSEQUENCES
• Statutory law
• Administrative law
• Court rulings
• Unintended consequences
PROCESS TO CHALLENGE AN UNDESIRABLE LAW
Lobby to defeat new law
Minimize effect of law
Challenge legality of law
Look for unintended consequences
UNINTENDED CONSEQUENCES OF LAWS
• Impact, Texas
• Hummer automobile
• Ethanol
CULTURAL ENVIRONMENT
• Changing American Values
• International Cultural Values
CHANGING AMERICAN VALUES
Older Values Newer Values
Live to Work Work to Live
Let the Buyer Beware Let the Seller Beware
Single-Wage Earner Multi-Wage Earners
INTERNATIONAL CULTURE VALUES
• Time
• Space
• New Year Celebrations
• Cultural Differences
CULTURAL VALUE OF TIME
• Mexico
• Indonesia
• Belize
CULTURAL VALUE OF SPACE
• Business cocktail events
• Lining up at airports
• Location and status of office
NEW YEAR CELEBRATIONS
• United States
• Vietnam
• Egypt
CULTURAL DIFFERENCES
Concept U.S. Culture Other Cultures
Time 1-12am 1:00-24:00 1-12pm
Measurement Feet Meters
Temperature Fahrenheit Centigrade
TECHNOLOGY ENVIRONMENT
• Nanotechnology
• Cloud Computing
• Energy Technology
NANOTECH EXAMPLES
• Cancer treatments
• Nano computer
• Purified drinking water
CLOUD COMPUTING EXAMPLES
• Rackspace
• Salesforce.com
• Dropbox
ENERGY TECHNOLOGY EXAMPLES
• Space-based solar power
• Battery storage
• Shale gas