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Week 6 External analysis: the macro environment (rushed this week) -…
Week 6 External analysis: the macro environment (rushed this week)
macro, meso and organisational – at which a strategic analysis is conducted.
Marco
external factors such as economic and political contexts.
Meso
industry level, or ‘meso environment - industry specific
Organisation
internal environment
organisational level
STEEPLE
sociological factors
technological factors
economic factors
Environmental factor
polictical factors
Legal factors
Ethical factors
some factors trigger and influence other factors
combined together to make macro environment
Flaws
difficult to draw all the trends and factors in the same diagram
does not suggest which factors are more salient
serves as a snapshot of a macro environment; yet, it does not show its dynamics
not static
challenges of application
how to draw all elements in 1 diagram
does not detail which factors are more important
doesnt show dynamics
VUCA (U.S. Army Heritage and Education Center, 2019)
Volatile
exchange rates
response to the volatility challenge is to create agility (Bennett and Lemoine, 2014)
managers will need to create resource slack
Uncertain
lack of knowledge
Complex
moving into china market
Ambiguous
is a lack of knowledge about the rules of the game
2 purposes
helps to understand challenges – volatility, uncertainty, complexity and ambiguity – in macro environment.
four responses – agility, information, restructuring and experimentation – to the four challenges.
flaws
assumes all macro environments exhibit these challenges
more relevant in emerging economies
less significant in advanced economies
assumes organizations must adapt to the macro environment
reshape the macro environment. - Apple inc
structuring the analysis: External macro environment , external industry environment, internal org environement
A note on using reports
Is the information relevant?
Is the information sufficient?
Is the information recent?
Is the information correct?