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Analysing an organizations macroenvironment

An organization's macroenvironment consists of nonspecific aspects in the organization's surroundings that have the potential to affect the organization's strategies. When compared to a firm's task environment, the impact of macroenvironmental variables is less direct and the organization has a more limited impact on these elements of the environment. Macroenvironmental variables include cultural, technological, political, economic, demographic and natural. A firm considers these variables as part of its environmental scanning to better understand the threats and opportunities created by the variables and how strategic plans need to be adjusted so the firm can obtain and retain competitive advantage. The macroenvironment consists of forces that originate outside of an organization and generally cannot be altered by actions of the organization. In other words, a firm may be influenced by changes within this element of its environment, but cannot itself influence the environment.

The economic environment consists of factors that affect consumer purchasing power and spending patterns. Nations vary greatly in their levels and distribution. Rapid technological progress in information and communication technologies (ICTs) along with their widespread diffusion have led to speculation about “frictionless” economies in which transaction costs are nearly zero, barriers to entry and contestability disappear, and markets clear instantly. Some think that electronic commerce, with producers selling directly to consumers over computer networks such as the Internet, will eliminate existing intermediaries (disintermediation) and drastically reduce transaction costs. For example, Japan Fashion is a company that selling clothing and some accessories to the consumer though the computer network such as website. These lower production costs will encourage the entry of new businesses and thus increase competition and pressure to pass lower costs on to consumers as lower prices. In addition, consumers will be able to search among thousands of merchants for the lowest prices, thereby increasing the downward pressure on prices and leading to a shift in market power from producer to consumer. In general, it is thought that electronic commerce can significantly improve the efficiency of economies, enhance their competitiveness, improve the allocation of resources, and increase long-term growth.

Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics. The demographic environment is a major interest to marketers because it involves people and people make up markets. The world population is growing at an explosive rate. Changes in population demographics have many potential consequences for organizations. As the total of population changes, the demand for products and services of the electronic commerce also changes. Many companies that traditionally marketed their products toward youth are developing product lines that appeal to an older market. So, electronic commerce which is selling their company clothing and accessories over the Internet was traditionally popular among young adults. For example, Pinky Shop is selling the cloths that are following the trend of the younger. Many young adult which are busy in studying or working don’t have time go to shopping. So they will think that electronic commerce are an easy way to shopping and can save many time to do other things.

Cultural

The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors. The cultural dimensions of the environment consist of customs, lifestyles, beliefs and values that characterize the society in which the firm operates. Cultural components of the environment influence the ability of the firm to obtain resources, make its goods and services, and function within the society. Cultural factors include anything within the context of society that has the potential to affect an organization. The major cultural values of a society are expressed in people’s views of themselves and others, as well as in their views of organization, society, nature and the universe. Population demographics, rising educational levels, norms and values, and attitudes toward social responsibility are examples of cultural variables. Norms (standard accepted forms of behavior) and values (attitudes toward right and wrong), differ across time and between geographical areas. Lifestyles differ as well among different ethnic groups. As an example, Customers have also come to expect increasing quality in products though the internet. Many firms have found it necessary to reexamine production and marketing strategies to respond to changes in consumer expectations.

Technology

Technology is another aspect of the environment a firm should consider in developing strategic plans. Changing technology may affect the demand for a firm’s products and services, its production processes, and raw materials. Technological changes may create new opportunities for the firm, or threaten the survival of a product, firm, or industry and innovation continues to move at an increasingly rapid rate. Technology will impact the electronic commerce by change the lifestyle and buying patterns of consumers. Recent developments in the field of microcomputers have dramatically expanded the potential customer base and created innumerable opportunities for businesses to engage in business via Internet. For example, now a day got many shop that are selling cloths over the computer network such as Internet like LuvFashion shop, Ann Inn shop and so on. Similarly, new developments in technology led to a reduction in prices for cloths and expanded the potential market. Lower prices allow the cloths to be marketed to the general public rather than to business, scientific, and professional users that is the initial market. Technology also changes production processes. The introduction of cloths and accessories based on new technology often requires new production techniques. .

Philip Kotler & Gary Armtrong, Principle of marketing, Pearson Education International

http://www.enotes.com/management-encyclopedia/macroenvironmental-forces

http://www.oecd.org/dataoecd/3/12/1944883.pdf

http://unpan1.un.org/intradoc/groups/public/documents/UN/UNPAN001213.pdf


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