today we will be talking about the macro environment, specifically politics, economics, technology...
DESCRIPTION
EXAMPLE OF THE MACRO ENVIRONMENTTRANSCRIPT
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Today we will be talking about the Macro Environment, specifically Politics, Economics, Technology and Socio-Cultural influences on
business’s
INTRODUCTION
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THE MACRO ENVIRONMENT
• The Macro Environment is influenced by many factors and are not limited to the fore mentioned topics.
• The Environment itself refers to an organisations ability to grow and develop, whilst under the influence of outside, uncontrollable forces.
• This means most companies must be able to adapt to constantly changing situations, whether it be new legislation or advances in technology.
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EXAMPLE OF THE MACRO ENVIRONMENT
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Economic situation in IrelandThe graph shows how the economic recession in Ireland has affected national income and expenditure.
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HOW THIS EFFECTS BUSINESS’S• With less expendable income, people are more inclined to save
rather than spend.
• Marketers now faced with the difficult challenge of encouraging consumers to buy their product, must rebuild consumer confidence
• As according to (http://www.investopedia.com/articles/economics/08/recession-affecting-business.asp) an economic recession will cut down business expenditure meaning less employment and cuts on sectors including advertising
• Smaller companies get hit the hardest by negative changes in the economic environment with a much higher rate of bankruptcy than that of larger firms
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HOW COMPANIES ADAPT TO ECONOMIC CHANGES
• Most companies main goal is to make profit. Ireland is a lucrative environment in terms of its very low corporation tax of just 12.5% on trade income, relatively low when compared to that of Frances 40%. Companies such as Google are taking advantage of this.
• Companies such as Samsung have in fact been growing, this year alone according to http://www.ibtimes.com/ Samsung has outgrown Apple by bringing in profits of $5.2 billion in the second quarter of 2013 compared to Apples $4.6 billion. As stated in http://www.ibtimes.com/ this is due to ‘strong volumes, high wholesale prices and tight cost controls’ this is an example of how one company has adjusted to Economic Environmental changes.
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SOCIO – CULTURAL EFFECTS• socio – cultural effect on the macro environment deal with
things such population, age, gender, race, and value system of a country.
• It is important that when a company sets up in a new country that they respect the countries culture, as it could affect their sales or worse break a law set by the country.
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EXAMPLES – POPULATION DEMOGRAPHY & AGE• Levi’s
• Ageing population in America – improvements healthcare & low birth rate
• Previously popular with younger generation
• Smaller target audience
• Developed Dockers label – strong with adult market
• Maintained sales
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RELIGION • Muslim countries
• Strict laws prohibiting alcohol
• Qatar and Oman have laws which allow tourists to drink & black market exists
• This proves that there is potential for a market for alcohol, but due to socio cultural factors present in these countries the alcohol companies are not allowed take advantage of this with the mass population
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ZIMBABWE• Before 1980, one of the richest countries in Africa
• Production in Zimbabwe was based on farming and mining
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ROBERT MUGABE• In 1980, Zimbabwe became independent country
• Robert Mugabe was elected for president and started his reforms
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NATIONALIZATION• R. Mugabe's decision of forced expropriation of most commercial farms devastated
agriculture sector
• But still he determines the law, which calls for foreign-owned businesses to sell a 51 per cent stake to a local partner
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TECHNOLOGY• Technology improves marketing for businesses.
• It also helps reach new customers in new places which is hugely beneficial.
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THE NEGATIVE AFFECT!• Technology decreases business morale. For example, reduces the personal aspect of
businesses and business life.