Macro Environmental Analysis

Question 1

what are the 3 levels of environmental scanning?

Answer 1

1. internal environment: structure, culture, resources
2. task environment; stakeholders
3. societal environment; PESTEL

Question 2

what is the difference between market and non-market environment

Answer 2

market environment consists mainly of suppliers, customers, and competitors.
nonmarket environment involves primarily the social, political, legal, and ecological factors, but can also be impacted by economic factors.

Question 3

what is a scenario analysis?

Answer 3

a technique that develops plausible alternative views of how the environment might develop in the future

Question 4

How does scenario analysis differ from forecasting

Answer 4

it avoids predictions about the future; it is more about learning about different possibilities for environmental change.

Question 5

Political analysis defininition?

Answer 5

role of the state and other political factors in the macro-environment.

Question 6

what are the two variables of political analysis?

Answer 6

1. The role of the state - the state is often important as a direct economic actor, for instance as a customer, supplier, owner, or regulator of businesses.
2. Exposure to civil society organizations. Civil society comprises a whole range of organizations that are liable to raise political issues, including political lobbyists, campaign groups, social media, or traditional media.

Question 7

what are the two key dimensions of political risk analysis? 1a,b 2a,b

Answer 7

1) The macro-micro dimension
Macro dimension – political risks associated with whole countries
Micro dimension - political risk, relating to the specific risk of particular organizations or sectors within a country
2) The internal-external dimension –
Internal dimension – factors originating within countries e.g. government change or pressure from local campaigning groups.
External dimension - knock-on effects of events occurring outside particular countries’ national boundaries - analysis of economic, political, and other linkages between countries around the world e.g. changes in oil prices driven by the internal politics of an oil-producing country

Question 8

what are the 2 factors of economic analysis?

Answer 8

1. currency exchange rates, interest rates, and fluctuating economic growth rates around the world - how an organization’s markets are affected by the prosperity of the economy as a whole
2. Concept of the economic cycle – worldwide and for specific industries/ sectors

Question 9

2 Role of social factors?

Answer 9

1. influence the specific nature of demand and supply within the overall economic growth rate.
2. can shape the innovativeness, power, and effectiveness of organizations.

Question 10

4 Key aspects of the social environment that can shape demand and supply?

Answer 10

1. Demographics – Population characteristics
2. Wealth distribution – High, middle, and low-income categorization (affects the size of markets)
3. Geography – concentration of industries and markets in particular locations
4. Culture – Changes in cultural attitudes which can be linked to changes in demographics

Question 11

Organizational networks?

Answer 11

fields with significant implications for innovativeness, power, and effectiveness.