The Macro Environment - A PESTEL Analysis
For our purpose here we are scanning the wider external environment primarily to seek opportunities. Of course, this macro analysis will also highlight problems and constraints emanating from this environment. One useful way to highlight this complex interaction of environmental influences is by a PEST - political, economic, sociological , technological environmental and Legal - analysis, which will give us our checklist. It should act as an indicative aide-memoir and is not intended to be fully comprehensive.
This list can be quite extensive and very complex. The political environment includes such factors as:
The prevalent political ideology
Power blocks and interest groups
National or transnational sovereignties
Government policies and regulations towards commerce/trade
The legal framework including laws, codes or practice and regulations The degree of political stability conducive or otherwise towards business The degree of altruism in politics as opposed to pure greed and suchlike Nationalism
Health, safety, and so on
Government views/policies towards entrepreneurs and enterprise
The political dimension is very important, operating at various levels - international, national and local - and providing the context to the operation.
Political stability and ideology will add to the ‘feel’ of business, and laws will give a more formal context to enterprise. Political turbulence is the problem in some countries, while enterprise is strangled by red tape in other regions.
This part of the environment should be easier to understand and perhaps less volatile - depending upon the country. Some features include:
The dominant economic system (eg pro/anti nationalisation for example) Inflation/prices
Poverty/income and wealth distribution/standards of living
Global economic trends
Economic aid for enterprise development...
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