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Environmental analysis is the evaluation of the possible or probable effects of external forcees and condition's on an organisation survival and growth

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Political factors analysis aims to identify the political environment within specific country, to assess the political stability, to review taxation and employment legislation, to assess government attitude to competition and monopolies, to identify relations between government and the company, to assess the level of corruption and bureaucracy, etc. For example, key mobile phone distributors such as Samsung, Nokia, Motorola faced with high import tariff for electronic devices while entering the Brazilian market (MarketLine, 2015c). This political factor has influenced their market entry strategy, as the companies had to establish manufacturing facilities in Brazil to provide competitive prices for mobile devices. Economic factors analysis allows the firm to evaluate major economic indicators of specific country, including: total country’s GDP and GDP per capita, inflation rate, unemployment rate, interest rates, consumer expenditure and disposable income, currency fluctuations, investment, energy costs, transportation costs, labour costs, raw materials costs, etc.

For example, while evaluating whether to enter a specific market the company needs to assess the purchasing capability of population in order to understand whether there will be sufficient demand in order to achieve a break-even point.

For example, before entering new market, Starbucks needs to evaluate what are the average consumer’s incomes and whether they will be willing to spend $3-5 per cup of coffee (MarketLine, 2015a). Socio-cultural factors imply analysis of social behaviour and cultural aspects in given country/region/state. This analysis should cover a broad range of issues including changes in lifestyle, shift towards “green” or environmentally-friendly consumption, education and health, demographic aspects, attitudes to leisure and work, distribution of income, etc. Thus, for example of Coca-Cola, it is possible to illustrate the importance of these factors in business.

With the shift towards increased concerns about obesity and sugar consumption problems, Coca-Cola diversified its produce adding such items as Coca-Cola Light. Technological factors include all technology-related factors related to the business context. These factors may cover such issues as government investment policy, new research initiatives, speed of change and adoption of new technology, level of expenditures on R&D by competitors, etc. For

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preview essay on Environmental analysis is the evaluation of the possible or probable effects of external forcees and condition's on an organisation survival and growth
  • Pages: 9 (2250 words)
  • Document Type: Essay
  • Subject: Management
  • Level: Undergraduate
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