By: Judy Webb
Professor Natalie Marsh
Business Administration Capstone – BUS 499
January 12, 2011
Perform an analysis of the Social/Demographic, Technological, Economic, Environmental/Geographic, and Political /Legal/Government segments to understand the general environment facing Great Lakes. Describe how Great Lakes will be affected by each of these external factors. Social/Demographic Segments – The primary consumers of the products produced by Great Lakes—especially lead additives—hail from developing countries. And while the case study does not specifically comment on the demographics of these countries or the social status of their people, it is logical to assume that clients from these locales would be large in number and reside in densely populated areas. These dynamics, complemented by the fact that most cars in developing countries did not have catalytic converters clearly indicates that social/demographic factors did not adversely Great Lakes. And the numbers appear to bear this out: as of 1996, leaded gasoline comprised 93 percent of all gasoline in Africa and 94 percent in the Middle East. The numbers were 30 and 35 percent respectively in Asia and Latin America (Hitt, Ireland & Hoskisson , 2011). Technological – Technological considerations could have a great impact on Great Lakes when and if the countries in which it does business take the plunge and move from leaded to unleaded gasoline. Since leaded gasoline use was banned in the United States and most other developing countries, segments of the world’s population—especially environmentalists—have insisted that Great Lakes stop manufacturing lead additives. To date, the company has not yielded to these demands because of the negative impact it would have on its profits as well as its customers who have not made the move from leaded to unleaded for their vehicles. Despite its production of lead additives, Great Lakes had indicated that it was committed to environmental responsibility (Hitt, et al. 2011). Economic Segment – This segment should not have any impact on the way Great Lakes conducts business, at least in the short term. The company’s customers have a number of other pressing issues that require attention more than a making the conversion from leaded to unleaded gasoline. They further indicate that even if the decision was made to convert to lead-free gasoline, the majority of customers would be at loss when it comes to grasping the complex elements associated with making such a transition. The other factor is that refineries in developing countries are often controlled by governments or ruling elites whose financial incentives are to stay with the status quo (Hitt, et al. 2011). In the long term, however, the economic segment could be of significant concern to Great Lakes. In a scenario where its customers decided to convert to unleaded gasoline on a large scale, Great Lakes would assist (economically) in the transition in order to be seen as a respectable corporate citizen both in the United States and abroad (Hitt, et al. (2011). Environmental/Geographic Segments – Great Lakes operations are greatly affected by factors in this segment. Environmentalist had for years campaigned for Great Lakes to cease its production of lead additives. According to Hitt, et al. 2011), numerous reports had chronicled the dangers associated with leaded gasoline including brain damage to children, respiratory problems in the elderly and damage to air quality. Hitt, et al. (2011) specifically said:
▪ Lead adversely affects the neurological system, kidneys and the cardiovascular system. ▪ In the adult population, exposure to lead causes elevated blood pressure, hypertension and an increased risk of cardiovascular disease. ▪ Most adversely affected by lead exposure are children. Those between the ages of one and two years of age absorb 40 to 50 percent of ingested lead...