Premium Essay

Macro Environment

In: Business and Management

Submitted By arunbaktha
Words 3752
Pages 16
2/27/12

Generic Competitive Strategies - eNotes.com

Generic Competitive Strategies
Generic Competitive Strategies
Three of the most widely read books on competitive analysis in the 1980s were Michael Porter's
Competitive Strategy, Competitive Advantage, and Competitive Advantage of Nations. In his various books,
Porter developed three generic strategies that, he argues, can be used singly or in combination to create a defendable position and to outperform competitors, whether they are within an industry or across nations.
Porter states that the strategies are generic because they are applicable to a large variety of situations and contexts. The strategies are (1) overall cost leadership; (2) differentiation; and (3) focus on a particular market niche. The generic strategies provide direction for firms in designing incentive systems, control procedures, and organizational arrangements. Following is a description of this work.

OVERALL COST LEADERSHIP STRATEGY
Overall cost leadership requires firms to develop policies aimed at becoming and remaining the lowest-cost producer and/or distributor in the industry. Company strategies aimed at controlling costs include construction of efficient-scale facilities, tight control of costs and overhead, avoidance of marginal customer accounts, minimization of operating expenses, reduction of input costs, tight control of labor costs, and lower distribution costs. The low-cost leader gains competitive advantage by getting its costs of production or distribution lower than those of the other firms in its market. The strategy is especially important for firms selling unbranded commodities such as beef or steel.

Figure 1
Competitive Advantage
Through Low Cost
Leadership
Figure 1 shows the competitive advantage firms may achieve through cost leadership. C is the original cost of production. C is the new…...

Similar Documents

Premium Essay

Macro

...such as total employment & national income. Henderson & Quanat Macroeconomics deals with large scal economic activities of environment. G. Akle Macroeconomics examines economy in wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation & price level. Finally, macroeconomics is the study of broad economic activities & trends, is possibly the largest subfield in economy which consider the performance of the economy as a whole. Microeconomics | Macroeconomics | Microeconomics is the study of the individuals economy of a person, a company or a country. | Macroeconomics is the study of the economy as a whole. | Microeconomics is also known as price theory. | Macroeconomics is also known as income theory. | All kinds of requirements of an individual or a company can be identified. | All kinds of forces that affect the firms, consumers, or workers can be identified. | The demand & supply of the society individually are identified. | The aggregate demand & aggregate supply that are calculated on the basis of all firms demand & supply. | The word ‘Micro’ of microeconomics is derived from the Greek word ‘Micros’. | The word ‘Macro’ of macroeconomics is derived from the Greek word ‘Macros’. | ‘Micro’ means small or part. | ‘Macro’ means big or whole. | The area of microeconomics is relatively small limited. | Macroeconomics deals with the wide area of the economy. |...

Words: 447 - Pages: 2

Free Essay

Micro&Macro Environment

...Landscape Ecol (2009) 24:375–390 DOI 10.1007/s10980-008-9312-x RESEARCH ARTICLE Effects of macro and micro-environmental factors on the species richness of terrestrial tardigrade assemblages in an Iberian mountain environment ´ ´ Noemı Guil Æ Joaquın Hortal Æ ´ nchez-Moreno Æ Annie Machordom Sara Sa Received: 1 November 2007 / Accepted: 20 November 2008 / Published online: 4 December 2008 Ó Springer Science+Business Media B.V. 2008 Abstract Tardigrade communities are affected by micro and macro-environmental conditions but only micro-environmental variables, and altitudinal gradients have been studied. We review previous reports of altitudinal effects and evaluate the influence by interacting macro- (climate, soils, biome, and others) and micro-environmental (vegetation, moss and leaf litter) factors on tardigrade assemblages at the Sierra de Guadarrama mountain range (Iberian Central System Mountains, Spain). Terrestrial tardigrade assemblages were sampled using standard cores to N. Guil (&) Zoological Museum, Natural History Museum, University of Copenhagen, Universitetsparken 15, Copenhagen DK-2100, OE, Denmark e-mail: nguillopez@gmail.com J. Hortal NERC Centre for Population Biology, Division of Biology, Imperial College London, Silwood Park Campus, Ascot, Berkshire SL5 7PY, UK J. Hortal Á A. Machordom ´ Departmento de Biodiversidad y Biologıa Evolutiva, Museo Nacional de Ciencias Naturales (CSIC), Madrid, Spain ´ S. Sanchez-Moreno ´ Departamento de......

Words: 9404 - Pages: 38

Premium Essay

Impact of Macro Environment Forces on the Components of the Core Marketing System.

...Objective of the Assay: Impact of Macro environment forces on the components of the core marketing system. I have defined some objectives in this assay: • To define Macro Environment. • Classification of Marketing Environment • Elements of macro environment • Impact of macro environment on marketing system. Macro- Environment: A factor that influence a company's or product's development but that is outside of the company's control is known as macro environment. The company and all of the other actors operate in a large macro environment of forces that shape opportunities and pose threats to the company is known as macro environment. Six largely uncountable external forces influence an organization’s marketing activities and shape opportunities is known as macro environment Forces. These factors include the economic, demographics, legal, political, and social conditions, technological changes, and natural forces are known as macro environment. Elements of Micro-Environment: Demographic Environment Demography is the study of human populations in terms of size, destiny, location, age, gender race, occupation and other statistics. The demographic environment is of major interest to marketers because it involves people. Economic Environment Marketers require buying power as well as people. The economic environment consists of factors that affect consumers’ purchasing power and spending power/ patterns.......

Words: 902 - Pages: 4

Premium Essay

Micro , Macro Business Environment

...A – Micro business Environment: This is also known as internal business environment because business has power to control them. In this environment, factors can be divided with following way. 1st Supplier A supplier provides raw material to business. This is also main factor of business environment because, it affects business very closely. If supplier delay to supply raw material or stop to supply. At this time production of business can be stopped due to not getting raw material. So, for controlling this factor, it is the duty of businessman to make good relation with more than one supplier so that, if one stop or delay at this time, goods can be purchased from other supplier. 2nd Customers Customers are those people or companies which buy goods from our business. Business sells them his finished product. But time to time tastes of customers also change. So, according to the taste of business customers, new products must be supplied by business. That is the formula for living long life of business. 3rd Market Intermediaries For promoting sale, it is required to ads by different way, so market intermediaries include sales man and middle man. This environment is under control of business because, if business starts selling with more ads, his selling will surely increase. 4thCompetitors Competitors of business also create internal business environment. According to competitors, policies, business changes his policies for winning in......

Words: 686 - Pages: 3

Premium Essay

The Macro Environment Factors

...The Macro Environment factors are: 1) Demographic Environment 2) Economic Structural Environment 3) Technological Environment 4) Political Environment MACRO-ENVIRONMENTAL FACTORS A business and its forces in its micro environment operate in larger macro environment of forces that shape opportunities and pose threats to the business. It refers the major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces. The important environmental factors are; (1) Economic Environment (2) Political and Governmental Environment (3) Socio-cultural Environment (4) Natural Environment (5) Demographic Environment (6) Technological Environment (7) International Environment. 1. Economic Environment: - Economic environment of business has reference to the board characteristics of the economic system in which the business operates. The business sector has economic relation with the government, capital market; household sector and global sector. These sectors together influence the trends and structure of the economy. The form and functioning of the economy vary widely. The importance external factors that affect the economic environment of a business are; (i) Economic Conditions: - The general Economic conditions prevailing in the country viz. national income, per......

Words: 1028 - Pages: 5

Premium Essay

Macro Environment Analysis

...Trade occurs when citizens from one country can buy from another country or sell to another country what they can produce. This allows a country to specialize in the manufacture and export of products that can be produced most efficiently in that country. Trade between Bangladesh and India is playing a vital role in both the countries’ economy.  This report will give you some idea about the current scenarios of the trade between these two countries. To complete this report we have tried to analyze different strategies these two countries have been following. Here we discussed the trade theories. We also tried to analyze how the macro environmental factor affects this trade, the effects of the WTO policies, and the strategic management of this type of trade and also the international human resource management in these two countries. Today’s trade scenarios are also described here. The description of all the above-summarized information is written in the report from which one might be able to get a good idea about the Trade between Bangladesh & India. Contents Si. No. | Topics | Page No. | 01. | Introduction | | 02. | Product Brief | | 03. | Company Brief | | 04. | Country Information | | 05. | Economic Analysis | | 06. | Political and Legal Analysis | | 07. | Cultural Analysis | | | | | INTRODUCTION Our respected teacher Mr. Reyad Ahmed Chowdhury asked us to select two countries to......

Words: 2830 - Pages: 12

Premium Essay

Macro-Environment Factor in Emerging/Developing Market

...In your opinion, what is the most relevant macro-environment factor (legal, political, cultural and economic differences) for an international business when choosing to internationalise into an emerging/developing market? Discuss any international business concepts or theories that could be used to help justify your answer. In the past few decades internationalisation has been a phenomenon in being a main subject in international business research. Globalisation has allowed countless commercial opportunities to occur over the border of their national country by maintaining competition and the continuing growth of international firms (Tikhonova, 2012). In foreign countries, legal and political systems as well as the economy are essential to have knowledge in as it explains how political systems, laws and regulations and economic differences affect international business opportunities. Although these factors are vital in understanding the foreign environment, it is not as broad as culture. Culture is a factor that includes several aspects that range from different dimensions which on a broad level includes linguistic, regional, religious and ethnic dimensions (Reference for Business’s website, 2014). Fundamentally for an international firm to endure success in emerging markets it is relevantly important to have full understanding of consumers and their cultural differences. In order for a firm to reach their full potential and succeed in an emergent market they need to......

Words: 1834 - Pages: 8

Premium Essay

Analysis of a Macro Environment

...describe and explain the macro environment of a company in the marketing setting, and to outline the macro environment of Cadbury Chocolate. In their book Principles of marketing (Armstrong 2010), the authors give six factors that are the macro environment of a trading entity. They are 1. the demographic environment, 2. the economic environment, 3. the natural environment, 4. the technological environment, 5. the political and social environment and 6. the cultural environment. The demographic environment. Demogrophy refers to the science of vital and social statistics (Delbridge 1997) These statistics of a population will determine the products that the population need or desire, and the type of marketing that will be effective. Australia and other first world countries that are the target market for Cadbury, are countries with a large middle class, that earn a good wage or salary and have a reasonable amount of disposable income. Cadbury chocolate produce a product that is a delicacy and is affordable by a large portion of that population. The economic environment Australia has a strong economy, compared to other first world countries. Unemployment remains in the low five percent range. Confidence in the future, although not high, is not dismal. People who have disposable income are prepared to spend it rather than save. Cadbury Choclate have marketed their product such that it is desirable by, and affordable, to most Australians. The natural environment Everything that......

Words: 841 - Pages: 4

Premium Essay

Macro and Micro Environment

...There are two kinds of external marketing environments; micro and macro. These environments’ factors are beyond the control of marketers but they still influence the decisions made when creating a strategic marketing strategy. micro and macro environments Micro Environment Factors The suppliers: Suppliers can control the success of the business when they hold the power. The supplier holds the power when they are the only or the largest supplier of their goods; the buyer is not vital to the supplier’s business; the supplier’s product is a core part of the buyer’s finished product and/or business. The resellers: If the product the organisation produces is taken to market by 3rd party resellers or market intermediaries such as retailers, wholesalers, etc. then the marketing success is impacted by those 3rd party resellers. For example, if a retail seller is a reputable name then this reputation can be leveraged in the marketing of the product. The customers: Who the customers are (B2B or B2C, local or international, etc.) and their reasons for buying the product will play a large role in how you approach the marketing of your products and services to them. The competition: Those who sell same or similar products and services as your organisation are your market competition, and they way they sell needs to be taken into account. How does their price and product differentiation impact you? How can you leverage this to reap better results and get ahead of...

Words: 656 - Pages: 3

Premium Essay

Mcdonald's Macro Environment

...Macro environment/Remote Environment Analysis A firm’s macro or remote environment consists of the factors that originate beyond and usually irrespective of a single firm’s operating situation and consists of economic, social, political, technological, and ecological factors (Pearce and Robinson, p87). McDonald’s, a global leader in the fast food industry, remote environment contains many of these factors. Economic Factors: Markets require purchasing power as well as people. The available purchasing power in an economy depends on current income, prices, savings, debt, and credit availability (Kotler, 2000). Changes in income and changes in consumer spending patterns can affect the industry. McDonald’s and other global competitors also face different scale of tax and revenue measurement in different countries. International currency fluctuations especially in global food distribution are also a factor. Social Factors: Current customers are much more health conscious than previous generations and thus are switching to healthier and greener food like salads. In addition, customers are trying to associate themselves with good organizations that they feel are concerned for the environment. Fast food shops are now trying to improve their brand image by portraying their concerns for the environment. Political Factors: Even in stable countries with no political unrest, political trends may have a significant impact on business (Jain, 2004).  Different governments may focus on......

Words: 788 - Pages: 4

Premium Essay

Macro & Micro Environment

...Macro and Specific Environment Macro and Specific Environment 2011 Mohd Haizam Bin Idris (ZP00942) Masters of Business Administration 5/1/2011 2011 Mohd Haizam Bin Idris (ZP00942) Masters of Business Administration 5/1/2011 1.0 Introduction In today’s organisation, responding accurately to the factors that may affect the organisational performance. In this case, analysis on macro and specific environment has been analysed to identify the elements of the macro and specific environment that may have an impact to the organisations. Examples of how an organisation responding to the environment has been put together to distinguished from the two environmental factors. Literature review have been made through text book, online portal and journals as well account of company’s experience in responding to such environments. 2.0 Specific Environment Specific Environment refers to forces or institutions outside the organisation in which that the organisation interfaces in the course of conducting its business. In other words, specific environment refers to elements outside the organisation that have direct impact to an organisation. Such forces or institutions are directly relevant to the organisational goals because they have direct and immediate impact to the decision and actions of the managers. The specific environment in each organisation is unique and changes with conditions. The common elements are customers, suppliers, competitors and pressure groups. ...

Words: 2928 - Pages: 12

Premium Essay

Apple Micro and Macro Environment

...1) A Public limited company is runned by a board of directors who are appointed by the shareholders of the company. This is done during the general meeting through voting by each shareholder. The average members of board of directors are 9 in most of the companies. They are legally responsible for company’s record accounts and performance. They also can hire other people to manage the day-to-day activities of the company. They can however be disqualified from being accompany director if they don’t meet the legal responsibilities such as keeping proper company accounting records. 2) Management is the coordination of the business activities in order to meet the objectives set by the shareholders of the company. The public limited companies are managed in two ways: I. The traditional management system with the board of directors. The board of directors is the executive organ carrying out the management and administrative duties of the company. II. The dual management system. It is divided into two that is: * The management board which is in charge of managing the company. * The supervisory board that is permanently monitoring e management of the company work. Board of Directors Public limited company has a minimum of three directors. The board of directors are appointed in the general meeting by the shareholders for a maximum term of 6 years as stated in the articles of association. A director can resign on his or her own free will but will be......

Words: 288 - Pages: 2

Premium Essay

Macro

...MACRO ENVIRONMENT The Coca Cola Company and other organizations have their own weaknesses and strengths that can both affect the future performance of their respective business. Analyzing the future constraints is an advantage for the companies since they can identify the possible factors that tend to leave an impact on their business. PESTLE analysis is a popular method that focuses in the external factors of the business and the environment where it operates. PESTLE stands for Political, Economic, Sociological, Technological, Legal, and Environmental. All of them examine the changes in the marketplace. Political Analysis Political analysis examines the current and potential influences from political pressures. The non-alcoholic beverages falls in the category under the FDA and the government plays a role within the operation of manufacturing these products. In terms of regulations, the government has the power to set potential fines for the companies that did not meet their standard law requirement.  The changes in laws and regulations, such as accounting standards, taxation requirements and environmental laws and foreign jurisdictions might affect the book of the company as well as their entry in foreign country. Other than that, the changes in the nature of business as non-alcoholic beverages can gain competitive product and pricing pressures and the ability to improve or maintain the share in sales in global market as a result of action by competitors. The......

Words: 687 - Pages: 3

Free Essay

Diageo - Macro Environment

...Macro-Environment The British premium drinks company ‘Diageo’ founded in 1997, is the largest multinational company in terms of alcoholic beverages. Therefore, it is inevitable that Diageo has had to, and will continue to find ways to adapt to various factors that are external and overwhelming. These factors are known as the macro-environment, and will be discussed further. The activities of Diageo’s direct competitors, such as the Carlsberg Group, will affect how Diageo prices some of its products. For example, if Carlsberg decide to lower the price of their beer, Diageo will have to react, as beer is a price elastic product. Therefore, Diageo will have to either lower their price, or further market their product to illustrate to customers why they charge a more premium price through a more premium service. Although beer is a huge revenue generator for Diageo, it is under constant pressure from the government’s pint duty tax which is currently at 52 pence a pint. This was reduced from 2014's duty tax by 1%. With many pub landlords struggling to keep their businesses a float during these tough economic recovery times, this led to many pubs shutting down as they were not being profitable. This would have a devastating effect on major beer brands that Diageo owns such as Guinness, as they will lose the income streams they once had from many pubs. Another uncontrollable factor is that some cultures and religions do not consume alcoholic beverages. For example, in the......

Words: 570 - Pages: 3

Free Essay

Brazilian Macro Environment

...I. The Brazilian Macro-Environment Investment Climate Analysis Brazil is quite interesting place for investment and many companies are entering this developing market. Its high GDP growth, large economy, developed infrastructure, liberalisation of public sector and many Foreign Direct Investments have turned this struggling country into developing nation that holds 2nd place (China is 1st) in amount of foreign capital invested into the economy. In last 5 years, Brazilian government has been quite stable and it seems that Brazil has a sound strategy when it comes to taking its economy into top performing ones. Government is introducing new, more liberal competition laws and it is introducing new forms of investments, such as PPP, or Private Public Property, where both the investor and government share the risks by holding equal stakes in the investments. But, let us not be blinded by the Brazilian marketing skills and their portraying of real investment climate. There is for sure a lot of space for improvement. We will perform a few analyses, which will give us precise insights into the environmental conditions for investing in Brazil, and through analysing this country; we shall decide what type of investment is the most suitable for Red & Green. PESTL Analysis Investment climate is the economical, institutional, policy, and regulatory environment in which firms operate. A PESTL analysis is an analysis of the external macro-environment that affects all firms....

Words: 1113 - Pages: 5