Answer to Question #34961 in Management for shailesh thajur

Question

Q1. Why is environmental analysis important for strategic decisions? What does macro environment comprise of?

Answer 1

The analysis of external factors helps to develop strategic solutions that provide algorithms of interaction with the environment of the company in the short and long term, that will support its potential at the level necessary to achieve the objectives will help uncover threats and opportunities.
Macroenvironment has six main groups of factors:
• political factors (political system, political structure, the parties and their influence, government legislation and law, etc.);
• economic factors (economic system , the state of the economy and market conditions, economic and tax legislation, government policy in foreign trade, etc.);
• demographic factors (size, composition and structure of the population, trends in the demographic structure of the population, the social composition of the population, the average level of income and the income of certain social groups);
• scientific and technical factors (scientific and technical discoveries, changes in production technology, the introduction of new products and materials, etc.);
• national-cultural factors (life values and traditions, religious regulations, the presence of small cultural and ethnic groups, etc.);
• natural and environmental factors (climate, availability of natural resources, environmental safety , environmental regulations) .
Analysis of the external environment is carried out by considering these factors and assessing their impact on the company's operation. Thus, the macrofactors are monitored , i.e. there is tracking their status and trends . The company can not directly influence actively the behavior of these factors.