Scribd
Upload
3 views

The Macroenvironment

The macroenvironment encompasses various forces that influence an industry, including macroeconomic, ecological, technological, demographic, social, and political/legal factors. Changes in these forces can directly impact the competitive dynamics of an industry, affecting profitability and market attractiveness. Understanding these forces is essential for companies to navigate opportunities and threats effectively.

Uploaded by

Raj Dharod
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
3 views

The Macroenvironment

The macroenvironment encompasses various forces that influence an industry, including macroeconomic, ecological, technological, demographic, social, and political/legal factors. Changes in these forces can directly impact the competitive dynamics of an industry, affecting profitability and market attractiveness. Understanding these forces is essential for companies to navigate opportunities and threats effectively.

Uploaded by

Raj Dharod
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

STEEPLED ANALYSIS

Social, technological, ecological, economic, political, legal, ethical, demographic

The Macroenvironment
A. The macroenvironment refers to the broader economic, technological, ecological,
demographic, social, and political environment within which an industry is embedded. It is
apparent that changes in this macroenvironment can have a direct impact on any one of the
Five Forces in Porter’s model, thereby altering the relative strength of these forces and
with it, the attractiveness of an industry.
B. There are six important forces in the macroenvironment.
1. Macroeconomic forces include changes in the growth rate of the economy, interest
rates, currency exchange rates, and inflation rates; these are all major determinants of
the overall level of demand. Adverse changes in any of these can threaten
profitability in an industry, whereas positive changes tend to increase profitability.
2. Ecological forces include environmental regulations on industry
3. Technological forces are characterized by an accelerated pace of innovation and
change. Technological change can make established products obsolete overnight, but
at the same time, it can create new products and processes. Thus technological
change is both an opportunity and a threat; it is creative and destructive.
4. Demographic forces consist of any trends related to population, such as the aging of
the population and the movement of people across boundaries. Changing
demographics create both opportunities and threats, spawning new industries and
products while eliminating others.
5. Social forces consist of changes in societal preferences and values. New social
movements also create opportunities and threats. For example, the impact of the trend
toward greater health consciousness has been a boon to the fitness equipment and
organic foods industries, while it has hurt the meat and cigarette industries.
6. Political and legal forces are shaped by changing laws and regulations. Factors such
as deregulation, reform, and even the political party makeup can create opportunities
and threats for companies in many industries.

You might also like