Strategic Planning in the Small Business

Unit 2

HO 2-4

(continued)

environmental

analysis, they are engaging in a process of iden­

tifying

and examining key external factors and assessing and

evaluating the impact those

factors will likely have on the firm's

operations and success. Typically,

in environmental analysis,

managers concentrate not only on present forces, but attempt

to project trends and

anticipate changes. As such, environ­

mental analysis is future-oriented. The

business seeks to de­

termine what problems and opportunities will likely be created

by changes in its external environment.

Environmental analysis zeroes in on

a series of environ­

mental variables that are pertinent

to the business and its com­

petitive situation. These variables, emphasized

to varying

degrees, represent influences that

most businesses face. There

are

certain general environmental variables which are typically

necessary for analysis regardless of the business

or its particular

situation. These variables

are presented in the following dis­

cussion

on the nature of the macro environment.

NATURE OF THE MACRO
ENVIRONMENT

The macro environment

refers to environmental variables that

are not company specific. These apply to and affect

all firms,

although their impact:, may be felt differently

by each firm.

Four areas of macro environmental

variables need to be con­

sidered. These are

technological changes, political and legal

changes, social and demographic

changes, and economic

changes.

Technological Changes

First, consider

technological changes. Clearly, we live in the

midst of a technical revolution. The presence and continued

prolifertion of computerized

nformation sources and auto­

mation is revolutionizing organizational procedures, activities,

and communication. bNew technical processes are

rapidly

emerging and changing the nature and focus

of organizational

action. Key technological changes affecting the business

should

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