Macro-Environment
When studying the macro-environment, I found it essential to recognize the factors that may in turn change a number of critical variables, which are likely to sway an organization's supply and demand levels. Often the major ongoing changes that are taking place in society produce an unclear environment and could have a negative influence on the organization. Checklists have been developed as a way of sorting through the vast number of possible issues that could affect an industry. There is the Porter's Five Forces Model, which is merely a framework that analyzes macro-environmental influences by potential competitors, intensity of rivalry, bargaining power of buyers and suppliers, and closeness of substitutes to an industry's products. Analyzing these five forces, examines the impact of each on the switching costs and government regulation. The results can then be used to take advantage of opportunities and to incidentally plan for threats when preparing business and strategic plans (Hill, Jones Seventh Edition 2007).
It appears the Porter Five Forces Model is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The categories for this model are a framework for reviewing a situation, and can in addition to SWOT and the areas of the macro-environment, be applied by organizations to review strategic directions, including marketing proposals. The use of this model can be seen as effective for business and strategic planning, marketing planning, and research and development. The Porter Five Forces Model can also ensure a company's performance is associated with the powerful forces of change that are affecting business environment. This model can also be useful when a company decides to enter its business into new markets or new countries. In this case, the model helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment....
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