The macro environment and business
With the help of PEST analysis we can be able to evaluate the macro environment. The analysis consists of four elements which include political, economic, social-cultural and technological. The political environment favour the performance of business as most countries are reducing both tariff and non-tariff barriers to trade. Increasing liberalization of various global markets means that the company has an opportunity to expand business. The economic environment does not look favourable due to global financial crisis which has caused consumers around the globe to cut on spending 5 and this will affect the company earning.
However reduction in interest rate means that the cost of servicing debt will be lower and considering that the company is financed to a large extent using debt then lower rate will favour the company. The consumers are turning away from printed copies and photos and this will affect company’s earnings. Technological changes are making new innovation absolute within a short period therefore the company may not be able to enjoy full benefit of new product due to a shorter life cycle (Mazzarol & Soutar, 2001). Opportunities and threat Opportunities still exist for the company to grow.
One of the area where the company can still expand is film business is the developing nations since they are still used by many. Technological changes though create opportunity seem to be a threat to the business as new innovation quickly becoming absolute and therefore the company should try to forecast both the present and future need of consumers in developing new product through extensive research. To tackle the problem of decreasing income from film business the company can also venture into development of personal computers as most peoples are now using computers both in developed and developing nation.
As the company seem to be in a financial difficulty it may not be able to take full advantage of opportunities which arise therefore it should consider forming alliances with others. Conclusion Based on the porter analysis the company have preformed fairly well in managing it environment however considering the PEST analysis it is too early for the company to celebrate as more need to be done to ensure future survival and success of business. 6
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