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Business strategy involves seeking a position within an environment or industry that generates a sustainable competitive advantage (implying that a diversified company should have as many business strategies as it has businesses)

Analysing Macro - Environmental Factors:
There are many factors that will effect the strategies and decisions of managers of any organisation. Tax changes, new laws, trade barriers, demographic change, etc are some of the examples. To help analyse these factors, we can categorise these micro - environmental factors using PESTEL model. PESTEL abbreviates Political, economical, social, technological, environmental and legal factors.

Political Factors: These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Etc

Economical Factors: These include interest rates, taxation changes, economic growth, inflation and exchange rates etc.

Social Factors: Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. For example, in UK, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees because their staff are living longer.

Technological factors: Technology is growing very fast nowadays. New and fast machineries are introduced every now and then. New technologies create new products and new processes. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing the products.

Environmental factors: Environmental factors include weather and climate change in macro factors. Change in climate, temperature can impact on many industries. These can benefit one industry and can make other industry down at the same time. For example in hot sunny days, people love to go out and visit beaches instead of going to restaurants and places like them. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider.

Legal Factors: These are related to the legal environment in which firms operate. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisation's actions.

Generally, the model assumes that industry growth follows an 'S' shaped curve. The flat introductory phase reflects the problems of establishing the new product. Once proven, growth becomes explosive until market saturation is reached. Sales now are limited by the rate of replacement sales and the rate of growth of the population in the market. Eventually the industry will come under pressure from newer technologies and substitute products with super论文英语论文网提供整理,提供论文代写英语论文代写代写论文代写英语论文代写留学生论文代写英文论文留学生论文代写相关核心关键词搜索。

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