Page 33 - DMGT401Business Environment

Business Environment

Notes Some management gurus believe that in today's turbulent business environment the best scanning
method available is continuous scanning. This allows the firm to act quickly, take advantage of
opportunities before competitors do, and respond to environmental threats before significant
damage is done.

1.3.6 Scanning the Macro Environment

When we refer to environmental scanning, we usually refer just to the macro environment, but
it can also include industry and competitor analysis, consumer analysis, product innovations,
and the company's internal environment. Macro environmental scanning involves analyzing:

1. Economy
(a) GDP per capita
(b) Economic growth
(c) Unemployment rate
(d) Inflation rate

(e) Consumer and investor confidence
(f) Inventory levels
(g) Currency exchange rates

(h) Merchandise trade balance
(i) Financial and political health of trading partners
(j) Balance of payments
(k) Future trends
2. Government
(a) Political climate – amount of government activity

(b) Political stability and risk
(c) Government debt
(d) Budget deficit or surplus
(e) Corporate and personal tax rates

(f) Payroll taxes
(g) Import tariffs and quotas
(h) Export restrictions
(i) Restrictions on international financial flows
3. Legal

(a) Minimum wage laws
(b) Environmental protection laws
(c) Worker safety laws
(d) Union laws

(e) Copyright and patent laws

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