The paper tells that macro-environmental analysis is the initial step when conducting a strategic analysis of a company and it is otherwise referred as pest analysis, external analysis or pestle analysis. The main goal of conducting macro-environment analysis is to help in identification of the opportunities and threats within a particular industry which cannot be controlled by the firm. In the macro-environment analysis, the areas of concern include the social-cultural trends of the market and its demographics, technology, political and legal environment, economic conditions and environmental factors. Looking at the social-cultural conditions and the demographics within which Harvey Norman operates points to various factors which continues to work in favor of the entire industry.
Firstly, the lifestyle of the people has changed and they now demand more equipment for entertainment which means that the electronics industry must continue offering superior products for the same. Additionally, various products which were previously a luxury such as computers have become a necessity to the lives of most people. According to Inma and Shelda, presently people are more conscious about the places they live in and they continuously seek to improve their houses and therefore they are constantly demanding for such products.
Demographically, the population is rising although at a slow pace and the majority of people especially with the Harvey Norman market is between 20 to 65 years. However, there is a significant chunk of the population which comprises of the old people especially those aged between 55 years and above. The economic trends within the market are also critical indicators as they help indicate the purchasing power of the customers. Presently, the economic status of a majority of people is improving given that the amounts paid are rising.
However, the interest rates are also high which makes acquisition of the needed capital through borrowing more expensive.
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