Business Policy

The Macro-Environment

← Is the broad environmental context in which a firm’s industry is situated.

← Includes strategically relevant components over which the firm has no direct control.

■ General economic conditions

■ Immediate industry and competitive environment

The General Environment

♦ Segments of the general environment include:

● Demographic, Sociocultural ,Legal/Political

● Technological, Economic, Global

♦ General environmental trends and events:

● Little ability to predict them

● Even less ability to control them

● Can vary across industries

♦ Demographic Segment

● Population size

● Age structure

● Geographic distribution

● Ethnic mix

● Income distribution

♦ Economic Segment

● Inflation rates

● Interest rates

● Trade deficits or surpluses

● Budget deficits and surpluses

● Personal savings rate

● Business savings rate

● Gross domestic product

♦ Sociocultural

● Women in the workforce

● Workforce diversity

● Attitudes about the quality of worklife

● Concerns about the environment

● Shifts in work and career preferences

● Shifts in preferences regarding product and service characteristics

♦ Legal/Political

● Antitrust laws

● Taxation laws

● Deregulation philosophies

● Labor training laws

● Educational philosophies and policies

♦ Technological

● Product innovations

● Applications of knowledge

● Focus of private and government-supported R&D expenditures

● New communication technologies

♦ Global

● Important political events

● Critical global markets

● Newly industrialized countries

● Different cultural and institutional attributes

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