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This Report describes the evaluation and the changing business environment over the last five years about a Brazilian Multinational Company, Braskem.
However, The mainly focus on this report is identify, analysis and understand the highlights points which influencing the Micro and Macro environment business, A SWOT analysis is used to compreenchian the internal factors (Strenghts and Weakness) and the external factors (Opportunitis and Threats), on the other hand, it is import to analysis and understand some factor that affect a business such as Political, Economy, Social, Technoly, Environment and legal, as called PESTEL analysis.
Business Environment can be defined such as everything that composes a business system.
Business managers should be able to read the environment and understand how the aspects can be influence the business today but how will influence in the future business.
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Literature Review (1000 words approx.)
According to Lancaster (2008) companies are inserted in a macro environment composed by different factors or forces which have an impact on their operations. Some of these factors are closer to the company such as suppliers, intermediaries, distributors and so on, which he denominate proximate macro environment. There other factors have a wider prospect, such as legal, cultwural, economic, so on, but can also impact companies' results. I don't know if this part should be here!!!!
According to Worthington and Britton (2003), Most of business operations have the same type of commodities, which is converting inputs (resources such as labour force, technology, finance and materials) in outputs such as goods (products that can be touched such as foods, cars son on) or services (products that can not be touched such as insure services). Moreover, according to Palmer and Hartley (2009) Macro environment is complicated for a company because are forces that company can not directly affect by the relationships with the costumer, suppliers and intermediaries, furthermore, macro environment it is important part of the business and sooner or later the macro environment can change and can change all the business environment, and all of these relationships with the customer and can be affect over all the business. The macro environment is complex and independent and to better understand it is used a PESTEL analysis to understand the mainly factors. (1 - Page 7 and 8))
There are many factors from the external environment which have an impact on companies' activities therefore managers need to know how to identify and evaluate them in order to take better decision. One tool which helps them on this is the PESTEL model which is divided on the following factors:
According to Palmer and Hartley (2009) Politicians are responsible to create and passing the legislation to companies and occasionally the legislation can direct affect some types of business, such as, customer protection law, employees' protections law, and controls on pollution and so on. In addition, According to Lancaster (2008) Political decision can affect many areas for the business, such as the workforce education, health, and environment and occasionally even the economy infrastructure.
Economic factors are very import for an organization because it is directly related with costs, demand, prices and profits. These economy factors are macro-environment and there are outside the control of the company, but their influence the managers' decisions. An example was the Oil Crisis during the Middle East War in 1973 which generation economic crisis in whole world, generation rose increase in the crude oil prices, thus, all the chain were affect such as energy cost, oil-based raw material, plastic and synthetic fibres. This factor makes company monitor all the economy, either nationally or internationally to understand the opportunities and the threats to be always prepared to protected theirs business. (Lancaster 2008)
Social and Cultural Environment
The socio-cultural environment maybe is the sector most difficult to measure in macro-environment because it is about the people behaviour change, religion, values, priorities, attitudes, beliefs and social change. (Lancaster 2008), on the other hand, according to Palmer and Hartley (2009) it is a crucial part for business understand the cultural value of a society, companies should be all the time monitoring the culture change to always being attending well the customers.
According to Lancaster (2008) Technology is an import macro-environment factor which is presented in many products that we use on our daily live, as television, calculators, video records, computers and so on. Companies play an important role on generating more technologies due to this some of them has their own research and development department.
This is a topical that increasingly every day more principal in multinationals companies because influence in business behaviour, socially responsible, communities and the natural environment. Worthington and Britton (2009)
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I need to write something friendly first~
Companies should work following the law otherwise the companies will be suffering a significant impact on the business. Some law are created to protected the customer and suppliers. Sometimes some kind of law influence market structure and behaviour. Worthington and Britton (2009)
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Microenvironment (Customer, Competitors, intermediaries, others stakeholder and suppliers)
Lancaster (2008) argues that one of the main objectives of marketing is to attend the necessities of the consumers. In order to achieve this, companies can make use of their internal resources and capabilities, their micro-environment, because they can control and use them as a base of knowledge to construct the better strategies to satisfy costumer's needs
The microenvironment is better to be understood because are all the organizations or individual who is directly or indirectly affect the company. But all these areas have a major impact on the business, furthermore, a lot of these individual or organization may feel enthusiastic to become a stakeholders. Below there is some groups that can be identified such as microenvironment. (Adrian Palmer and Bob Hartley, 2009) what's the mean?!?! I didn't understand anyword.
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Customers are a vital part of a microenvironment, because if there is no customer there is any business, companies must be focus on customer changing necessity and always need to keep in touch with the necessity. In other words, companies should well know what the customers wants and preview what they need for future and satisfying them. But companies need to think beyond this simple model because sometimes customer do not know what is better from themselves and companies should help this kind of customer to identified what is the best product from them. (Adrian Palmer and Bob Hartley, 2009)
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Suppliers supply raw material, goods and services that are transformed into value-added to product for customer. Suppliers are very important for a microenvironment (Adrian Palmer and Bob Hartley, 2009)
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Intermediaries are the connection between companies and customer, large companies generally find it some difficult to attender the every final consumer, so they choose to sell their products through intermediaries because they can be more effective in distant places and small supermarkets. Some companies suffered because they failed in work together with intermediaries. (Adrian Palmer and Bob Hartley, 2009)
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When the business is highly competitive, Companies should keep their eyes on competitors and trying to understand what will be the next steps. But exist two different types of competitor; the first one is Direct competitor is that sell the similar products and the second is the Indirect competitor this is a highly difficult to know who is. because they appear in different form. For example, who is the indirect competitor for a cinema? Is it another cinema? A home rental movie? (Adrian Palmer and Bob Hartley, 2009)
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