Which of the Following Can Be Cited as an Example of Microenvironment as Well as Macroenvironment?
Learning Outcome
- Differentiate between macroenvironment and microenvironment considerations in strategic planning
Business (or Strategic) direction is the fine art, science, and craft of formulating, implementing and evaluating decisions that will enable an organization to attain its long-term objectives. It is the procedure of specifying the organization'southward mission, vision and objectives, developing policies and plans, oftentimes in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.
Strategic planning is an organisation'south process of defining its strategy, or management, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business assay techniques tin be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economical, Ecological, and Regulatory factors and EPISTELS (Environs, Political, Informatic, Social, Technological, Economical, Legal and Spiritual)
Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least 1 of iii key questions:
- "What practise nosotros exercise?"
- "For whom do we do it?"
- "How do we excel?"
In business organisation strategic planning, the third question is meliorate phrased "How can we crush or avoid competition?".[1] In many organizations, this is viewed as a procedure for determining where an organization is going over the next year or more—typically iii to v years, although some extend their vision to twenty years. In lodge to determine where it is going, the system needs to know exactly where it stands, and then decide where it wants to go and how it will get there. The resulting document is called the "strategic program".
Strategic planning may also exist a tool for finer plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market place will evolve and what bug will surface in the coming days in guild to plan your organizational strategy. Therefore, strategic innovation and tinkering with the 'strategic programme' have to be a cornerstone strategy for an organization to survive the turbulent business climate.
Strategic direction seeks to coordinate and integrate the activities of the various functional areas of a business organization in order to achieve long-term organizational objectives. A balanced scorecard is oft used to evaluate the overall performance of the business and its progress towards objectives.
No give-and-take of strategic planning can ignore the micro and macro factors that are relevant in the success and possible failure of the retail concern. Thebusiness surround is a marketing term and refers to factors and forces that affect a firm'southward ability to build and maintain successful customer relationships. The three levels of the environment are. We will focus on micro and macro factors in this module:
- Micro (External) surroundings – small forces inside the company that bear on its ability to serve its customers.
- Internal environment – tin be controlled, however, it can't influence an external environs.
- Macro (external) surroundings – larger societal forces that affect the microenvironment.
Micro Environmental Factors
Micro environments in retail is anything in the firsthand environment including suppliers, customers, competitors, and stakeholders. Whatsoever government and other regulating body can be thought of as a stakeholder. Typically the micro surround is local to the business concern and any business owner should exist well enlightened of those factors affecting the retail business.
Macro Environmental Factors
Macro environments are often outside of the retailer's command and are typically of a larger scale and are ordinarily of an economical and industry viewpoint.
SWOT Analysis
In understanding micro and macro environments a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is commonly used in retail. Strengths and weaknesses are those internal factors impacting an organization while opportunities and threats are external factors that are exterior of the organization'south control. Wait at these slides reporting on a so permit's walk through a SWOT analysis for the GAP below.
Some of the positive internal attributes are franchising opportunities and global brand recognition. Strengths respond question such every bit: What value do we bring to the client? What do we practice well? What is making a departure? Some of the weaknesses include a dependence on exterior vendors as well as long term debt. They also have a dependence on an older consumer. Weaknesses accost questions such as: What needs improving? What isn't working? What exercise our customers dislike? In looking at those external opportunity factors affecting Gap that are positive you can see they take a market place for plus size women'south clothes and they are growing the online business organisation. There is also an opportunity for growth in Asia. Opportunities address the following questions: What should exist inverse? What should the company start or stop doing? Finally, threats are those external factors that tin can't be controlled but are withal a consideration. The Gap has strong competition, slow economic recovery, and increased labor costs. Threats answer the post-obit questions: What are the threats to the concern? Are at that place whatever economic, political, or customer trends? Are in that location whatsoever financial threats such every bit cost or debt?
In addition, PEST (Political, Economical, Social, and Technological) also every bit Porter's v-Forces analysis is as well used as a way to empathize new competition, the threat of new contest, the bargaining power of suppliers and customers, and the level of competition.
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Source: https://courses.lumenlearning.com/wm-retailmanagement/chapter/microenvironment-vs-macroenvironment/
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