This analysis is done to understand the macro environment of a company and is supportive to 5C analysis context part. This analysis includes some investigation in Political, Economic, Social, Technological and Environmental Legal spheres. Let us discuss them separately:
Political factors influence upon the regulation of businesses questions that should be discussed are:
· How stable is the political environment?
· Will government policy influence laws that regulate or tax your business?
· Does the government have a view on culture and religion?
· Is the government involved in trading agreements such as EU, NAFTA or others?
· Government and the health care
Economic factor has a great impact on a company and questions which should be discussed are:
· Interest rates
· The level of inflation
· Employment level
· Gross Domestic Product (GDP) per capita, etc.
Socio-cultural
factors vary from country to country:
· What is the dominant religion?
· Does language impact upon the diffusion of products onto markets?
· What are the roles of men and women within society? Family structures?
· Attitudes to health and food (eco, bio, diet etc. )
· Social impact on demographic change
Technological factors are vital for competitive advantage and are major drivers of globalization:
· Does technology allow for products and services to be made more cheaply and to a better standard of quality?
· How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc?
· Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?
Environmental & legal factors include several aspects which have important impact on a company
· Consumer protection laws
· Legislation on drugs
· Anti-Pollution law
· Availability of raw materials
· Social attitudes to the environment
This all aspects are vital for company survival and development that is why they should be carefully examined and included in a strategic planning process.
