- The level and nature of impact varies by industry, by business, and even by department of a business.
- Its change can change the competitive environment and internal environment.
- Each element of the macro environment can affect the business independently or in conjunction with other elements.
Analysis purpose:
Macroenvironmental analysis focuses on identifying and evaluating trends and events beyond the control of a single business. An assessment of external factors reveals the key opportunities and threats facing the business so that managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats.
Important macro-environmental influences include:
Table 2: Macro-environmental factors
[VI 2, ch.3, p.4]
Economic factors
Government and political factors | |
- Stage in the economic cycle. - GDP/GNP trends. - State price control policy. - Inflation rate. - Bank interest rates. - Financial policy. - Monetary policy. | - Regulations on consumer lending. - Competition and antitrust regulations. - Environmental protection law - Tax laws. - Special preferential policies. - Regulations on foreign trade. - Regulations on advertising and promotion |
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- Unemployment rate
- Balance of payments
trade - Political stability. | |
Cultural and social factors | Technology factor |
- Views on living standards - Lifestyle - female workers - career aspirations - Changing consumer habits - Cultural differences between regions of the country | - State budget expenditure level for Research & Development - Costs for research and development in the industry - Industry technology focus. - Copyright protection. - Transfer of new technology. - Automation trend. |
Population factor | Natural elements |
- Population structure: gender, age - Population growth rate - Population shift and migration | - Influence of geographical conditions - Environmental pollution - Energy deficiency - Waste of natural resources |
- Exchange rate
i) Economic factors:
The economic environment includes many factors, here only some factors are mentioned.
most important:
- Trends in gross national product (GNP) and gross domestic product
(GDP): figures on annual GDP and GNP growth rates tell us the growth rate
economic growth and per capita income growth rate. Based on that, we predict the market capacity of each industry and the market share of the enterprise.
- Interest rates and interest rate trends: These two factors will affect the trend of saving, consumption, and investment, thus affecting business operations. In general, rising interest rates will make it difficult for businesses to operate.
- International balance of payments : determined by the relationship between exports and imports. A deficit in the balance of payments can cause difficulties for the economy. For example, the deficit in the US's international balance of payments affects the global economy.
- Exchange rate trends : Exchange rate fluctuations directly affect import and export activities and can change the business results of enterprises. The government often adjusts exchange rates in a way that is beneficial to the economy, but can be harmful to certain enterprises.
- Inflation : The inflation rate has a great impact on the investment level of enterprises. High inflation makes people reluctant to save, creating risks for investment activities of enterprises, reducing the purchasing power of the economy, thereby causing the economy to stagnate. However, deflation is also not good for the economy. The goal of most governments is to maintain a moderate inflation rate to encourage investment of enterprises and stimulate economic growth.
- Fluctuations in the stock market
ii) Cultural and social factors:
Major social influences include: entertainment preferences, moral standards, views on living standards, business communities and female workers. Changes in socio-cultural factors are often the result of long-term impacts of other macro factors. Therefore, they often occur more slowly, have a wide range of impacts, are long-lasting, subtle and difficult to detect.
Aspects of the socio-cultural environment have a strong influence on
business activities such as:
- Concepts of ethics, aesthetics, lifestyle, and career.
- Customs, habits, traditions.
- Social concerns and priorities.
- General level of awareness and education of society.
It should be noted that, in reality, the socio-cultural environment changes constantly, albeit at a slow and difficult-to-detect pace. That requires managers not only to recognize the presence of socio-cultural factors but also to predict their changing trends, thereby proactively proposing anticipatory strategies.
iii) Population factors:
One of the environmental factors to monitor is population, because people make up markets. Marketers are keenly interested in the size and growth rates of populations in different cities, regions, and countries, their age distribution and ethnic makeup, education levels, household patterns, and regional characteristics and movements. We will examine the major demographic characteristics and trends and illustrate their implications for marketing planning.
- Domestic population growth rate: Population growth does not mean increased human demand, but it does not mean increased market unless there is enough purchasing power. If population growth puts excessive pressure on existing food supplies and resources, costs will skyrocket and profits will fall.
- The age structure of the population determines the needs : Each group has a certain need for products and services, preferences in media and sales forms, which will help marketers determine in more detail the goods they launch on the market.
- Education levels: People with low education levels have few opportunities to find jobs other than manual labor and domestic work. People with high education levels will create a market that meets the large demand for high-quality books, magazines, eating out and travel, etc.
- Household Types: Everyone thinks of a traditional household as consisting of a husband, wife, and children (and sometimes grandparents). Today's household types have changed a lot. Today's households include single people living alone, older people of the same or opposite sex living together, single-parent families, childless couples, and empty nesters. Each group has its own needs and buying habits. For example, singles, separated, widowed, and divorced people need smaller apartments, smaller and less expensive appliances, inexpensive furniture and home decor, and smaller packaged foods. Marketers must increasingly pay attention to the special needs of these nontraditional households, as their numbers are growing faster than those of traditional households.
Key aspects to consider include:
- Total population and population growth rate.
- Population structure and changing trends in terms of age, gender, ethnicity, occupation
industry, income distribution.
- Life expectancy and natural birth rate.
- Population migration trends between regions.
iv) Political and legal factors:
Legal, governmental and political factors increasingly influence the operations of businesses. Businesses must comply with regulations on hiring, lending, safety, pricing, advertising, environmental protection, etc. In general, businesses operate because social conditions allow them to. As long as society no longer accepts certain conditions and realities, society will withdraw.
that permission by requiring government intervention through regimes, policies or
through the legal system.
Major legal, governmental, and political influences include:
- Law: Makes provisions that allow or disallow certain things.
binding that requires businesses to comply.
- The Government: plays a major role in regulating the macro economy through its economic, financial, and monetary policies. In its relationship with businesses, the Government is both an important customer and a service provider (such as macro information, public services, etc.) for businesses. To take advantage of opportunities and minimize risks, businesses must grasp the policies, regulations, viewpoints, priorities, etc. of the Government, and must also establish a good relationship with the Government to create favorable conditions for business operations.
- Political and foreign trends : Contain the seeds for changes in the business environment. Complex fluctuations in a country's political and legal environment will create great risks for most domestic businesses.
v) Natural factors:
Natural conditions include: geographical location, climate, natural landscape, land, rivers, seas, underground minerals, oil, forests, water environment, air, etc.
Natural conditions always have a great influence on human life as well as business activities. It is also an important input factor of many industries such as: agriculture, mining industry, tourism, transportation. In many cases, natural conditions contribute to the formation of competitive advantage.
However, along with the rapid economic development, many
Our country's natural resources are seriously threatened. And the price must be
The cost of natural environmental degradation is huge. Therefore, the community and the State are tightening the law on natural resource protection.
vi) Technological factors:
Technology is a very dynamic factor, constantly changing, so it brings many opportunities as well as threats to businesses.
There are few industries and businesses that are not dependent on technology. There will certainly be more and more advanced technologies that will continue to emerge, creating opportunities as well as threats for all industries and businesses. The development of new technologies can create new markets, resulting in the proliferation of new products, changing competitive relationships within an industry and making existing products obsolete.
The emergence of new industries can pose threats to
Business:
- Increase the competitive advantage of alternative products or create favorable conditions for new competitors to enter, threatening businesses operating in the industry.
- Makes current technology obsolete, creating pressure for businesses to innovate
technology to avoid being eliminated.
- Shortens product life cycle, forcing businesses to shorten lead time
depreciation time, increasing costs.
However, new technology can also bring many opportunities to businesses.
festival:
- Can produce cheaper products with higher quality, increasing the ability
Product competitiveness.
- Create opportunities for production development and product improvement.
- Can create new markets for the company's products.
Be able to describe the relationship between macro-environmental factors and business strategy.
Industry through figure 5.
Figure 5: Relationship between macro-environmental factors and business strategy
industry [EN 5, pp.147]
(2) Working environment :
Research on the impact of the operating environment is extremely important content.
important in the process of analyzing the influence of the external environment.
The operating environment is defined for each specific industry and is directly linked to each business within the industry. Most of the business activities and competition occur here.
Since the operating environment determines the nature and level of competition in an industry, the key to developing a successful business strategy is for a business to analyze its effects. This is called industry structure analysis.
We will apply Michael E. Porter's Five Forces model to analyze the structure of the business industry. According to this model, the five basic factors that make up the competitive landscape of a business are: competitors, buyers, suppliers, potential competitors and substitute products.
The Five Forces model is shown in Figure 6: