What Is Legal Forces in Macro Environment

If you want to analyze the situation in which a company finds itself, environmental analysis is a good place to start. This combines a number of different techniques – PESTLE analysis is one of them – to identify and evaluate the different external factors that influence a company. How does a company prepare for macro-environmental factors? Is there a way to hedge against these risks so that they have less impact on the business? Incidents such as natural disasters cannot be predicted, making them very difficult to plan. The only way to rely on insurance and hope that a disaster is not catastrophic for a company? Families are also changing, which means that marketing strategies for them need to be adapted. This is how new household formats are emerging in many countries. While in traditional Western countries a typical household consisted of husband, wife and children, nowadays there are more married couples without children as well as single parents and singles. Another factor is the increasing number of women working full-time, especially in European countries. With other strengths, changed family structures require a change in marketing strategy. This external environmental category often overlaps with others in PESTEL, as concern for the environment is also a sociocultural trend as more and more consumers seek recycled products and buy electric and hybrid cars. Politically, companies around the world are facing increased regulation of their carbon emissions and the use of natural resources. While SWOT characterizes these factors as opportunities or threats, PESTEL simply identifies them as aspects of the external environment that companies need to consider when planning for their future.

All businesses are affected by the state of the national and global economy. The increasing interdependence of the economies of different countries has made it more difficult to assess economic factors in a company`s macroeconomic environment. Companies analyze economic indicators to make decisions about entering or leaving geographic markets, investing in expansion, and hiring or firing employees. As discussed in this chapter, employment rates affect the quantity, quality and cost of employees available to firms. Interest rates affect the sale of large items that consumers usually finance, such as appliances, cars and homes. Interest rates also affect the cost of capital for companies looking to invest in expansion. Exchange rates present risks and opportunities for all companies operating across national borders, and the price of oil affects many industries, from airlines and transportation companies to solar panel manufacturers and plastics recycling companies. Again, each scenario can be a threat to one company and an opportunity to another, so economic forces should not be seen as good or bad in themselves. Probably the largest category of macro-environmental factors that an analyst could look at are sociocultural factors. This broad category includes everything from national demographic change to fashion trends and much in between. Demographic data, a subset of this category, includes facts about a population`s income, education, age groups, and ethnic and racial composition. All these facts pose challenges and opportunities in the market.

Companies can target products to specific market segments by looking at the needs and preferences of demographic groups, such as, .B. working women (they may need daycare but not daytime TV), students (who would be interested in affordable textbooks but could not afford to buy new cars), or seniors (who would be willing to pay for mowing services). lawn, but which might not be on the market Adventure tourism is interested). One technological force that everyone can think of nowadays is the development of wireless communication technologies, smartphones, tablets, etc. This can mean that opportunities arise for a company, but beware: each new technology replaces an old one. .


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