Ecological/Physical Environmental forces - Global warming - Pollution - Energy and scarce resource conservation - Environmentally friendly ingredients and components - Recycling and non-wasteful packaging Example - Price of crude oil affecting airlines, increases pressure on product pricing - Governments can offer incentives to businesses operating under environmentally friendly practices. For most businesses its cheaper to pollute than it is to be environmentally friendly. - Natural disasters can have immediate and long term impacts on production - Adopting environmental policy through non wasteful packaging could affect packaging companies i.e. suppliers; these suppliers must adapt. Social/Cultural forces Demographic forces - World population growth - Age distribution (ageing population) - Household structure is changing Cultural forces - Subcultures - Attitudes to health (people want to be healthier) - Cash rich - time poor consumer - Cultural differences - Consumerism (formal grouping of people that act to protect the right of consumers) Example of influence: Developments in toy safety Lecture exercise (identify threat and opportunity for 1 of the above) Attitudes to health: opportunity for organic retailers as well as businesses providing healthy alternatives to increase their market share - proves a threat to large fast food organisations as more consumers adopt healthier lifestyles and make more informed decisions with regards to food choices (consumers have more information on the implications of eating junk food). Companies such as McDonalds may look to introduce new product ranges and improve the fat content of their products. Technological forces - Technological breakthroughs - Marketing-based technological innovation - Technological exploitation Microenvironment
- Customers (main source of revenue) - Competitors (must be monitored - in some cases there are competitor alignments which may help the business instead of threatening it) - Distributors - Suppliers (can seriously damage the brand - example: horse meat scandal, Finders unaware that their supplier was distributing product containing horse meat). Suppliers may also increase their prices; this will effect profit capabilities.