The framework allows a business to identify and analyze the important forces that determine the profitability of an industry. It is these forces that determine how much competition will exist in a market and consequently the profitability and attractiveness of this market for a company. Through sound corporate strategies, a company will aim to shape these forces to its advantage to strengthen the organizations position in the industry. For the purpose of this model, industry attractiveness is the overall profitability potential of the industry.
Part 2 P4 some positive and negative impacts of the macro environment on the business operations. Macro environment includes those external factors which are uncontrollable and also affects decision makin g, performance and strategies of the organisation.
These external factors include economic, legal, cultural and social factors, technological changes and natural forces. Change in consumers taste and preferences, change in interest rates, change in government policies are the example of macro environmental factors.
In the external environment new risk factors are arises regularly and they difficult to identify for the managers of the business. Macro environment factors include: Ikea micro environment and legal factors: Political and legal factors include change in the government activities and changes in the legal policies and regulations.
Political and legal factors affect marketing decisions of the company.
For example government provide subsidy or low rate of taxation of retailer business then it impact positively on the marketing decisions of the organisation. Political forces include possibility of election and the possible outcomes whether environment will peaceful or there will be chances of political transition.
Economic factors are broad in range it is the mixture of national and international environment. Organisation should take decision after considering the availability of these resources. These factors include new technologies, skills and knowledge required for production of goods or services.
Social and cultural forces: If business produces goods as per customer taste and preferences than it affects organisation positively. Big and major changes in the macro environment factors are usually outside the control of business so it is necessary that management of the company should be able to analyse the effect of these factors so they could make good decisions.
P5 Conduct internal and external analysis of specific organisations in order to identify strength and weakness. External environment factors and internal environment factors affects thebusiness organisation. Before making any business decision internal and external analysis should be conducted because environment in which business operates is an important part of planning.
With the help of internal and external analysis organisation can identify their strength and weaknesses and plan their activities accordingly.
Under internal analysis company ensures that it has proper amount of resources for carrying the working activities and processes. Resources include financial resources, physical resources like plant and machinery, human resources, intangible assets resources and cultural resources.
With the analysis of resource availability organisational capability can easily identified. External analysis is a process of analysing the environment in which organisation operate.
External analysis use to identify current market trends and events that affect the strategic decisions of the organisation Schirone, D.
External analysis can be done through SWOT method.IKEA makes most of its furniture from wood but the image of IKEA is an environmental responsible company and takes the necessary initiatives to ensure that the operations doesn’t have any adverse affect on the environment. IKEA - NUTID, Microwave oven, 5-year Limited Warranty.
Read about the terms in the Limited Warranty initiativeblog.com the Cook program, specific times and cooking power. Micro and Macro Environments - Download as PDF File .pdf), Text File .txt) or read online. Ikea Entry to Indonesia.
Ikea SWOT. Micro Environment of a Destination The Destination Publics Local destination management organisations Related and supporting industries Suppliers Tourism And Hospitality companies Marketing InterMediaries And. Environmental Analysis of IKEA Essay Words 6 Pages Environmental analysis is integral to understanding how the organization operates within the organization itself, with in the industry and within the macroeconomic environment.
Ikea Micro Environment. CHAPTER 3: THE MICRO ENVIRONMENT MGMT – STRATEGY AND POLICY OVERVIEW The micro environmental analysis is the second step in creating the Environmental Analysis.
The micro environment examines the general business climate as it relates to the organization within its industry. These forces, termed as the micro environment by Porter, influence how a company serves its target market and whether it is able to turn a profit.
Any change in one of the forces might mean that a company has to re-evaluate its environment and realign its business practices and strategies.