Swot Analysis and Macro External Environment - Essay Example

The social elements are crucial for any business and hence should be taken into account and business policies should be adapted according to such changes in the lifestyle of people to sustain their competitive positioning in the industry. The businesses on the other hand should also take into consideration the implications of their products and develop them accordingly. For instance, the increasing trend of environmental protection and global warming has led to the manufacturing of environmentally friendly products such as Toyota’s hybrid car – Prius.

Question #2  In conducting a SWOT analysis, you have now reached the area of the macro external environment. Please discuss the nature and importance of the political element in such an environment.

Political elements such as government legislation in favor or against a particular good/service can greatly influence the manufacturing and marketing of that product causing severe damage to its profitability. These political elements are likely to have a more significant impact on industries that are highly dependent on government aid such as budgets and subsidies. For instance, the Aerospace and Defense industries are highly influenced by defense budgets allocated by the government as well as the political relations between certain countries. This can affect the major players in the industry such as Boeing, EADS, Dassault Aviation, etc.

Question #3 In conducting a SWOT analysis, you have now reached the area of the macro external environment. Please discuss the nature and importance of the technological element in such an environment.

The advancement in technology brings about several changes in the marketing of products of a company. The various technological tools available offer different ways to approach the same needs and demands of the customers making the competition extremely fierce. Increased technological advancement also often leads to faster obsolescence of products. The demand for a particular technology is dictated by the markets and hence required to be adopted by companies providing such products in order to sustain their revenue flows. The sheer number of players available in the market would lead to customer switching and hence the companies resisting such technological change would be forced to exit the industry.

 Question #4  In conducting a SWOT analysis, you have now reached the area of the macro external environment. Please discuss the nature and importance of the demographic element in such an environment.

Demographic elements consist of a mix of the composition of the population at large such as age, sex, educational background, tastes, preferences, culture, etc. These factors also play a crucial role in influencing industry trades. The composition of the population of the geographical area where the product is targeted or marketed by the businesses also has a significant impact on the sale of goods and services offered. For instance, if the population consists of a majority of people belonging to ethnic backgrounds, the products demanded by them would find wider markets, such as the demand for Asian foods in the U.S and U.K where the concentration of the Asian population is high is an example of the significance of demographic elements in marketing of products and its impact on businesses.