CONCEPT OF BUSINESS AND

ORGANIZATIONAL BOUNDARIES
AND ENVIRONMENTS

Date: September 12, 2011

Environments
 Internal:various
departments
 Micro: suppliers,
marketing
intermediaries
 Macro: competitive,
demographic,
economic, natural,
technological,
political, and cultural
2
Major Forces in the Company’s
Macro Environment
Economic Environment
 The economic environment consists of factors that
affect consumer purchasing power and spending
patterns

 It is not enough to have people, the people must

have buying power
Economic Environment
The conditions of the economic system in which an
organization operates. Economic trends affecting
consumers buying power and spending pattern

 Change in per capital real income

 Savings & debt
 Consumer expenditures
 Change in interest rates and cost of living
Demographic Environment
 Demography is the study of human populations in
terms of size, density, location, age, gender, race,
occupation, and other statistics

 Demographics change over time and companies must

keep up with them
Demographic Environment
 Baby boomers – 77 Million post-World War II babies
born between 1946-1964

 Generation X – 45 million born between 1965-1976,

the “birth dearth”

 Generation Y (echo boomers) – 72 million born

between 1977-1994
Political and Legal Environment
The political and legal environment is made up of
laws, government agencies, and pressure groups
that influence and limit the activities of various
organizations and individuals in society. Trends in
the legal and political environment include:

 Increased legislation regulating business

 Changing government agency enforcement
 Growth of public interest groups
 Regional groupings
Technological Environment
Consists of forces that affect new technology, new
product development and market opportunities
 Pace of change

 Opportunities for innovation

 Varying R&D budgets

 Increased regulation of change

Social Cultural Environment
 The social cultural environment includes
institutions and other forces that affect society’s
basic values, perceptions, preferences, and
behaviors

 Persistence of cultural values

 Subcultures
Company’s Macro-Environment
 Relates to the larger forces having an impact on
society as a whole
 A company has little influence on these forces and
therefore can only adapt its marketing mix to
account for the resulting opportunities and threats