Macro Environment

Topics: SWOT analysis, PEST analysis, Environment Pages: 3 (296 words) Published: August 11, 2013
Marketing managers are confronted with many environmental concerns, such as those posed by technology, customers and competitors, ethics and law, the economy, politics, demographics, and social trends. One technique used by organizations to monitor the environment is known as environmental scanning. It allows marketers to understand the current state of the environment, so that the organization can predict trends.

The Macro Environment
There are a number of common approaches for how the external factors, which describe the macro environment, can be identified and examined. These factors indirectly affect the organization but cannot be controlled by it. One approach is the PEST analysis.

The PEST analysis is a political, economic, social, and technological analysis that describes the framework of macro-environmental factors used in the environmental scanning component of strategic management. Some analysts added legal and rearranged the mnemonic to SLEPT; inserting environmental factors expanded it to PESTEL or PESTLE, which is popular in the United Kingdom.

PESTEL Analysis
The six environmental factors of the PESTEL analysis are the following:

Political factors
-Taxation policy
-Trade regulations
-Governmental stability
-Unemployment policy

Economical factors
-Inflation rate
-Growth in spending power
-Rate of people in a pensionable age
-Recession or boom
-Customer liquidations

-Age distribution
-Education levels
-Income level
-Diet and nutrition
-Population growth
-Life expectancies
-Social class
-Expectations of society about the business

Technological factors
-Social media
-Level of Automation

Environmental factors
-Competitive advantage
-Waste disposal
-Energy consumption
-Pollution monitoring

Legal factors
-Unemployment law
-Health and safety
-Product safety
-Advertising regulations
-Product labeling labor laws

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