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Analysis of The Macroenvironment
Analysis of The Macroenvironment
Macroenvironment
Chapter 6
Learning Objectives
External microenvironment
Porter’s 5 Forces Analysis
Resource-based Approach to Analysis
External macroenvironment
SPENT analysis
SPENT Analysis
Macroenvironment -
Internal
the “far” environment
(outside an Industry
organization’s Macro-
industry and Environment
markets)
Characteristics of the
Macroenvironment
Influences the microenvironment
(industry and market)
Will impact all organizations in an
industry, a market, or even all
organizations in an economy
Source of competitive advantage –
being able to predict changes in the
macroenvironment and take action
SPENT Analysis
Socio-demographic factors
Political factors
Economic factors
Natural environmental factors
Technological factors
SPENT: Socio-Demographic
Influences
Influences originating from changes in
society
Main influences
social culture (values, attitudes and beliefs)
demography
social structure
SPENT: Political Influences
Socio-demographic factors
Migration of population from countryside to
cities
Growing middle-class
Political factors
Government approach to property rights
Economic factors
Government policy on the RMB
Technological factors
Socio-Demographic Factors:
China’s Middle Class
2007 2025 (Forecasted)
Urban households Urban households
with yearly income of with yearly income of
less than 25,000 less than 25,000
RMB = 77% RMB =10%
Urban Chinese
households are one
of the largest
consumer markets in
the world
(20,000,000,000,000
RMB each year)
Data from The Value of China’s emerging Middle Class, McKinsey Quarterly,
June 2006
Socio-Demographic Factors:
China’s Middle Class
Forecasted lower-middle class of 290
million people by 2011 (yearly incomes
of 25,000 RMB – 40,000 RMB)
Forecasted upper-middle class of 520
million people by 2025 (yearly incomes
of 40,000 RMB – 100,000 RMB)
Both middle income classes are
forecasted to be larger than the urban-
rich segment of 40 million people (yearly
incomes of more than 100,000 RMB)
Data from The Value of China’s emerging Middle Class, McKinsey Quarterly,
June 2006
Socio-Demographic Factors:
China’s Middle Class
China’s middle-class will be unusually
young compared to international
averages
People will likely continue to migrate
from the countryside to the cities in
search of higher paying jobs
Political Factors: China
Source: FT.com
Analysis: Ginter and Duncan
Complexity
Speed of change
Uncertainty
Homework
For first class next week, research SPENT
factors that may influence Ctrip.com
Read handout, article titled “The Value of
China’s Emerging Middle Class”
Prepare to discuss Ctrip.com
That means:
Read the case carefully
Prepare to discuss your analysis of the case, the
problems, alternatives to solve problems, and
recommendation
BRING THE CASE TO CLASS
Homework (2nd Class Next
Week)
Read Chapter 9, Evaluation and
Selection of Strategies, pp. 182-191