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When manipulating a business’s strategy, it is important to focus on the external factors in the environment. An external analysis is where a business conducts environmental scanning that present a company with the key external forces influencing the organization. The facets of external forces examined are the business environment, remote environment, or the competitive environment. A business environment is all of the external factors in the general environment that a firm cannot control, but can affect their strategy. The remote environment is the forces that affect most firms. Lastly, a competitive environment is the firm’s specific industry and its entirety. The external analysis is pertinent to a company called Dick’s Drive- In; without it, Dick’s would not be a thriving popular business today.

An organization’s external environment is terribly important and must be studied and understood for the organization to truly succeed. Through such study and understanding, a manager would be able “mitigate threats and leverage opportunities” that are caused by the six segments identified as macro-level external forces: (1) political, (2) economic, (3) sociocultural, (4) technological, (5) ecological, and (6) legal (Rothaermel, 2013, pp. 56-57). Since the manager’s decisions, or firm effects, have a greater impact than those external forces mentioned only when the manager accounts for them and builds a strategy around them, the manager must be aware of and understand these forces to be

1. Macro environment analysis: the major externals which affect company’s decision making, marketing strategy and performance. It includes:

Ben is a 22 year old and works as a photographer. He drinks a lot and goes to parties every single weekend with his friends. Ben has also started using heroin and became addicted to it while trying it out because of his friends. He grew up with his mum and had tough childhood as his mum is a single mum and also was addicted to alcohol. He grew up being exposed to alcohol ever since he was a child and he thinks that drinking alcohol excessively is normal. However, Ben got to the point that he no longer can live without alcohol and heroin and it started to affect his job and

The Remote Deposit Capture Project team is working hard to ensure that the new system meets expectations. Even though you have a detailed scope statement, schedule, and so on, you want to be sure that the project will please key stakeholders, in particular Harold, the project sponsor, and Tricia, the VP of Marketing. Both of these senior managers are very aware of customers’ needs, so it is important that the new service is stable, secure, and easy to use. They both want the remote deposit capture capability to be ready as soon as possible so the

Macro environment or macro forces consists of the larger societal factors that have the potential to affect an organization’s strategies. According to Phillip Kotler, these variables include demographic, economic, natural, technological, political, and cultural outside forces. (“Josbd”, n.d, para. 7)

Macro environment are the external and uncontrollable factors that influence an organization’s decision making and affects its performance and strategies.

Previously, you read about the industry analysis of the beer, wine and liquor industry and the five forces that affect a firm’s ability to serve consumers and turn a profit. Next, successful companies must recognize and respond to the major forces affecting our macro environment, for example; stock market decline, increase in unemployment and global warming. Companies must now consider several external environmental forces while running their business, in particular, demographics, economics, social, natural, technological and political.

A competitive strategy, or business-level strategy, is the way a business used to successfully enter and penetrate into a market (Eastwood et al, 2006), and also, to succeed in this chosen market against its competitors (Johnson et al, 2014). A company needs to develop and apply appropriate strategy to help the company to generate distinctive competences (David, 2007). Compared with the strategies implemented in other levels of operation, competitive strategy is more focused on the competition against other competitors and strategic choices to better attain market share (Harrison and St. John, 2009). According to

A macro business environment is inclusive all elements, that are out of the business’ control, that has direct and relative influence on strategic planning and goals. The microenvironment, includes current and any changes in local, state, federal and international laws and regulations. Laws and regulations literally dictate how a business regardless, of its sector, the guidelines of its operations. The state of the economy, consumer market and spending trends are also a major factor in the macro environment equation. The purchasing power, of the consumer, is vital for any business sector to succeed. In today’s technology driven society, it is utmost importance, that a business is, within the established perimeters of technology for their industry, or on the cusp of the cutting edge of technology. If a business has effective and efficient technology, across the board, in force, it can potentially cut costs and drive consumers to them. A business’ demographics

Identifying influencing factors of a company’s macro-environment helps in the strategic development and management within a company. The macro-environment outlines an industry and the competitive environment as seen in figure 3.1, (Gamble, Peteraf, Thompson, 39). Within the macro-environment there are the political factors, economic conditions, sociocultural forces, technological factors, environment forces, and legal/regulatory factors. All of these factors blanket the habitat an industry and its competition thrive in. Inside the industry and competitive environment there are five factors that influence an individual company. The five factors are suppliers, rival firms, new entrants, buyers, and substitute products. The biggest impact on a company are these five factors. For example, Under Armour focuses on their industry and competitive environment to survive and grow. Their strategy to win over the market share from Nike and Adidas consists of expanding a stable and original brand within record time, taking an innovative approach to their product line-up and brand-name appeal where the market seemed to be barren, and lastly, the company enters in the foreign market early on to establish its brand and influence markets outside of the US.

“Competition is not only the basis of protection to the consumer, but is the incentive to progress” – Herbert Hoover. The environments that today’s firms operate in are not static. The competitive environment they are operating in is constantly changing due to the entry or exit of competitors, changing technology and the demands of consumers. In order to maintain their market share and profitability, firms must continually assess and evaluate their competitive environment. Evaluating the various market forces firms’ face, and their effect on the competitive market ensures that an organization retains a proactive stance to the competitive environment. Instead of just accepting the status quo, organizations that actively examine and analyze their environment can then make choices and develop strategies that take advantage of the competitive situation or affect it to the firm’s benefit. This proactive stance to the market allows organizations to create value and position themselves for long term success. Firms that do not remain proactive and continually scan the competitive environment run the risk of being blindsided by innovation in the environment or significant changes undertaken by the competition.

The general environment is composed of segments that are external to the firm. Although the degree of impact varies, these environmental segments affect all industries and firms competing in them. The

The environment is like a double-edged sword, providing companies opportunities but threats as well. Therefore, in an increasingly hostile marketplace, a systematic and careful environmental analysis is supposed to be considered by companies (Johnson et al, 2011). The macro-environment of a company can be analysed by the framework of PESTEL, which includes six categories: political, economic, social, technological, environmental, and legal (Johnson et al, 2011, Appendix A ).

Macro environment consist of those major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies.