The Macro Enviroment
CHAPTER 3: THE MACRO ENVIRONMENT
MGMT 488 – STRATEGY AND POLICY
OVERVIEW
The macro environmental analysis is the first step in creating the Environmental Analysis. The macro environment examines the general business climate as it relates to the organization, but has nothing to do with the organization itself. The macro environment is primarily concerned with major issues and upcoming changes in the environment. The acronym for the macro analysis is “STEEP.” The five areas of interest are Socio-cultural and demographics; Technology; Economic conditions; Ecology and physical environment; and Political and legal.
SOCIO-CULTURAL AND DEMOGRAPHICS
Societal values and lifestyles change over time, and the most important of these should be discussed. For example, over the past generation, it has become acceptable for women to work outside the home – or not; smoking is not as acceptable as it once was; people are not retiring at 65; students going to college are older; and people are more aware of the environment and healthful living styles. The changes in values and lifestyles may come from many sources: medical (smoking, healthy eating, exercise); science (global warming, going “green”); economic (people working longer, women in the workforce); cultural diversity (music preferences, foods, living accommodations, medicine); and technologies (Internet dating, biodegradable plastic) are just a FEW examples. Some changes in values and lifestyles will be important to the industry, but not to your business. For example, the current trend is to adopt pets from a shelter, rather than from a pet store; this has an impact on the pet store industry. However, if a pet store is located in a town that does not have a shelter or the store does not sell pets (just supplies – like PetSmart), then the change does not affect the business. When discussing demographics do NOT discuss the target market. This section deals with changes to the population and demographics as a WHOLE and those
MGMT 488 – STRATEGY AND POLICY
OVERVIEW
The macro environmental analysis is the first step in creating the Environmental Analysis. The macro environment examines the general business climate as it relates to the organization, but has nothing to do with the organization itself. The macro environment is primarily concerned with major issues and upcoming changes in the environment. The acronym for the macro analysis is “STEEP.” The five areas of interest are Socio-cultural and demographics; Technology; Economic conditions; Ecology and physical environment; and Political and legal.
SOCIO-CULTURAL AND DEMOGRAPHICS
Societal values and lifestyles change over time, and the most important of these should be discussed. For example, over the past generation, it has become acceptable for women to work outside the home – or not; smoking is not as acceptable as it once was; people are not retiring at 65; students going to college are older; and people are more aware of the environment and healthful living styles. The changes in values and lifestyles may come from many sources: medical (smoking, healthy eating, exercise); science (global warming, going “green”); economic (people working longer, women in the workforce); cultural diversity (music preferences, foods, living accommodations, medicine); and technologies (Internet dating, biodegradable plastic) are just a FEW examples. Some changes in values and lifestyles will be important to the industry, but not to your business. For example, the current trend is to adopt pets from a shelter, rather than from a pet store; this has an impact on the pet store industry. However, if a pet store is located in a town that does not have a shelter or the store does not sell pets (just supplies – like PetSmart), then the change does not affect the business. When discussing demographics do NOT discuss the target market. This section deals with changes to the population and demographics as a WHOLE and those