MACROENVIRONMENT

It affects the intensity of rivalry within an industry

MACROECONOMIC FORCES
Four important macroeconomic forces
1.
Growth Rate of the economy
2.
Interest rates
3.
Currency Exchange Rates
4.
Inflation(/Deflation) Rates

GLOBAL FORCES

Falling Barriers to International Trade & Investment

Increases the intensity of competition

Lowering profitability of domestic firms
Isolated domestic markets now a part of global market
place

TECHNOLOGICAL FORCES
The technological advancements:
Lowered down barriers to entry
Reshape of industry structure
DEMOGRAPHIC FORCES
These are the outcomes of changes in the characteristics of a
population
Age, Gender, Ethnic origin, Sexual orientation and Social
class

SOCIAL FORCES
Refers to how social values affect an industry

Trend towards Health consciousness

Low calorie beer(Miller Lite)
Diet colas, Fruit based softdrinks

This trend led to threat for tobacco industry

POLITICAL AND LEGAL FORCES

Refers to the outcomes of changes in law and regulations
There has been strong trend towards
Deregulation of industries previously conrolled by state
Privatization of organizations once owned by state

Airlines industry