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Identifying and Responding toIdentifying and Responding to

the Major Macro environmentthe Major Macro environment

ForcesForces Demographic EnvironmentDemographic Environment

Worldwide PopulationWorldwide Population

GrowthGrowth Population Age MixPopulation Age Mix Ethnic and OtherEthnic and Other

MarketsMarkets Educational GroupsEducational Groups Household PatternsHousehold Patterns Geographical Shifts inGeographical Shifts in

PopulationPopulation From a Mass MarketFrom a Mass Market

to Micro marketsto Micro markets

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Identifying and Responding toIdentifying and Responding to

the Major Macro environmentthe Major Macro environment

ForcesForces Economic EnvironmentEconomic Environment Income DistributionIncome Distribution

Savings, Debt, andSavings, Debt, andCredit AvailabilityCredit Availability

Natural EnvironmentNatural EnvironmentShortage of Raw MaterialsShortage of Raw Materials

Increased Energy CostIncreased Energy Cost

Anti-Pollution PressuresAnti-Pollution Pressures

Changing Role of GovernmentsChanging Role of Governments

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Identifying and Responding toIdentifying and Responding to

the Major Macro environmentthe Major Macro environment

ForcesForces Technological EnvironmentTechnological Environment

Accelerating Pace of ChangeAccelerating Pace of Change Unlimited OpportunitiesUnlimited Opportunities

for Innovationfor Innovation Varying R&D BudgetsVarying R&D Budgets Increased Regulation of Increased Regulation of 

 Technological Change Technological Change Political-Legal EnvironmentPolitical-Legal Environment

Legislation RegulatingLegislation Regulating

BusinessBusiness Growth of Special-InterestGrowth of Special-Interest

GroupsGroups

Consumerist movementConsumerist movement

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Identifying and Responding toIdentifying and Responding to

the Major Macro environmentthe Major Macro environment

ForcesForcesSocial-CulturalSocial-Cultural

EnvironmentEnvironmentViews of themselvesViews of themselves

Views of othersViews of others

Views of organizationsViews of organizations

Views of societyViews of society

Views of natureViews of natureViews of universeViews of universe

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Identifying and Responding toIdentifying and Responding to

the Major Macro Environmentthe Major Macro Environment

ForcesForces

High Persistence of CoreHigh Persistence of Core

Cultural ValuesCultural Values

Existence of subculturesExistence of subculturesSubculturesSubcultures

Shifts of Secondary CulturalShifts of Secondary CulturalValues Through TimeValues Through Time

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 The Marketing Environment and The Marketing Environment and

Competitor AnalysisCompetitor Analysis

SWOT analysisSWOT analysis

PEST analysisPEST analysisFive forces analysisFive forces analysis

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SWOT analysisSWOT analysis

Strengths (internal)Strengths (internal)

Weaknesses (internal)Weaknesses (internal)

Opportunities (external)Opportunities (external)

 Threats (external) Threats (external)

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SWOT analysisSWOT analysis

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Pest AnalysisPest Analysis

Political factorsPolitical factors

Economic factorsEconomic factors

Socio-cultural factorsSocio-cultural factors

 Technological factors Technological factors

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Political/LegalPolitical/Legal

Monopolies legislationMonopolies legislation

Environmental protection lawsEnvironmental protection laws

 Taxation policy Taxation policyEmployment lawsEmployment laws

Government policyGovernment policy

LegislationLegislationOthers?Others?

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Economic FactorsEconomic Factors

InflationInflation

EmploymentEmployment

Disposable incomeDisposable incomeBusiness cyclesBusiness cycles

Energy availability and costEnergy availability and cost

Others?Others?

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Sociocultural FactorsSociocultural Factors

DemographicsDemographics

Distribution of incomeDistribution of income

Social mobilitySocial mobilityLifestyle changesLifestyle changes

ConsumerismConsumerism

Levels of educationLevels of educationOthers?Others?

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 Technological Technological

New discoveries and innovationsNew discoveries and innovations

Speed of technology transferSpeed of technology transfer

Rates of obsolescenceRates of obsolescenceInternetInternet

Information technologyInformation technology

Others?Others?

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Source: Adapted from M. E. Porter,

Competitive Strategy,

Threat of Threat of 

substitutessubstitutes

Potential

entrants

Threat of Threat of 

entrantsentrants

Suppliers

BargainingBargaining

power  power 

Substitutes

Buyers

BargainingBargaining

power  power 

COMPETITIVERIVALRY

Five forces analysis