Chapter 3 Flashcards
(18 cards)
To adapt you must study the environment:
- breakdown the environment (into manageable components)
- monitor critical trends (try to predict changes)
- foresee future threats
- identify new gaps and markets
Why is information important?
Information enables you to adapt to the dynamic environment, find opportunities to grow and navigate potential threats.
2 broad response strategies to a changing environment:
- respond to the change
- don’t react but continue to observe
Marketing environment (definition)
The actors and forces that affect the company’s ability to build and maintain successful relationships with target customers.
Micro-environment
- actors close to the company that affect its ability to serve its customers
- unique to the company
Microenvironment consists of: company, competition, corporate partners and customers in the core
Macro-environment
- broad societal forces in the environment that affect all companies
- common to several companies
Macroenvironment consists of: Social, technology, economic, political and legal, culture and demographics
company
- the company’s microcosm - has a direct effect on company’s ability to deliver on their promise to its customers
- Are departments (e.g., R&D, operations, finance) working in an integrated way to deliver on the company’s promise?
corporate partners
- people the company does business with or have some degree of association (suppliers, retailers)
- retailers often become the face of a new company to customers (spillover effect) – associate with the right partners
competitors
- monitor the competition (top and upcoming) closely. E.g., Fido and Koodo
demographic forces
- track and predict meaningful changes in these statistics
- create segments based on the meaningful changes
- rise in the senior population (health care, senior homes, vacations)
- market research agencies (simulation, wearing a body suit, hazy visors while trying products)
economic forces
Factors:
* inflation, interest rates (cost of borrowing money), unemployment
* business cycle (growth, recession)
* index of consumer sentiment
* international trade
o economics in other countries
o exchange rates
* labor availability (e.g., growth of labor-driven industries in China)
What happens if there is a speculated recession?
less money spent on leisure, less travel, necessities will stay the same
social/natural forces
- factors related to the physical environment (i.e., climate, access to rare minerals)
For instance: - Tim Hortons in Dubai might sell or add more cold than hot beverages to their menu
- Pima cotton-based products are cheaper in Peru than elsewhere
technological forces
- every new technology hurts an old one…
- tech. improvement vs. tech. adoption
- privacy concerns
Political environment
- nationalism
- free trade
- consumerism
- environmentalism
Legal environment
- CRTC, Industry Canada, Competition Bureau
- consumer protection
- provincial and local regulations
cultural forces
= institutions, ideas, belief systems, etc. that influence society’s basic values, perceptions, attitudes, and preferences
* core beliefs (stable) vs secondary beliefs (can change)
Can you identify some cultural forces at play today? How are those forces affecting businesses?
- men’s mental health, remote work, veganism, LGBT+ rights
