Macro Environment = General/Remote Environment

The macro forces are generally more uncontrollable than micro environment. Success of an organization depends upon its adaptability to the environment. Example of cost of imported component going up because of depreciation of the domestic currency, solution may lie with domestic manufacture of the component.

THE MACRO ENVIRONMENT

The far or macro environment relates to: Political Economic
Global Environment

Socio-Cultural Technological Environmental Legal

These influences may impact your business, now or in the future.

Political

Political influences relate to government or constitutional policies that may affect your business. For example, potential government legislation may allow businesses to register that they do not want to receive unsolicited calls. This may restrict cold calling on a business to business basis. The expansion of EU boundaries may have an impact on certain businesses.

Economic

Economic influences relate to the economy as a whole.

Rates of interest have an impact for example on levels of borrowing. The strength of the stock market has an impact on types of investment made.

Socio-cultural

class age gender demographics issues such as culture -both local & international diversity.
For example drinking habits of people in France are different to those in the UK.

TECHNOLOGICAL

Technological influences include

use of the internet. advances in mobile phones. Bluetooth. wireless networks. data management. customer relationship management systems.

TECHNOLOGICAL FACTORS

Many businesses are impacted today by environmental issues.

Corporate social responsibility is now higher on the public's agenda. Organizations such as Shell and Nike have been affected by adverse publicity relating to environmental issues.

Legal
Legal constraints also affect business performance. The Working Time Directive, Paternity Leave and Minimum Wage are examples of this. In certain industries there are legal constraints imposed by regulatory or watchdog bodies.

The gaming industry is an example of one sector which has been impacted by changes in the far external environment. Traditionally betting shops such as William Hill have always been a 'horses and dogs' business. As recently as 1999 this made up 80% of its business. The proliferation of sports and topics that people can now place bets on has led to huge changes in the world of gambling. The twin forces of technology and deregulation have also altered things. Gamblers can now place bets on the internet, via interactive TV, on WAP-enabled mobile phones, via high street shops or call centers. Bookmakers now open on Sundays and in the

evenings to cater for different work and leisure patterns. There are
proposals on the table to further modernize the gambling laws in this country which relate back to 1960s license and regulate the industry.

Microsoft Antitrust Case

The government viewed Microsoft as a paranoid monopolist, someone who gets up in the middle of the night and shoots at any movement. - Harry Edwards, Chief Judge, US District Court for Appeals for the District of Columbia. "The Sun was definitely shining in Seattle. Today's ruling really does go a long way toward positively resolving this matter for Microsoft, for our customers, partners, and shareholders." - Steven Ballmer, CEO, Microsoft, commenting on the US Court of Appeals for the District of Columbia reversing the District Court ruling that Microsoft be broken into two companies.

MICROSOFT - A MONOPOLY?
In the late 1990s, as Microsoft was preparing to enter the new millennium, the company was fighting the anti-trust proceedings initiated against it by the US government. One of the main charges against Microsoft was that it was distributing its Internet browser software, Internet Explorer (IE), free of cost along with its Windows Operating System. Microsoft was a late entrant into the Internet software market. Subsequently, it adopted aggressive marketing tactics to catch up with the early entrant, Netscape Communications. Netscape protested against Microsoft's move calling it an attempt to shut out other software that competed on a stand-alone basis. Another important charge against Microsoft was that it had modified Sun Microsystems' Java language in order to make it Windows compatible.

 Some analysts argued that the overwhelming market share that Microsoft held was a major impediment to innovations in the software industry. Microsoft was not only a leading player, but also the standards provider for the industry. By controlling the standards, the company was in a position to curb innovations. Microsoft, however, maintained that its dominance of the market was due to its superior products and not because of any unfair market practices. In 2000, the US Department of Justice (DOJ) ruled that Microsoft be split into two smaller companies to prevent it from indulging in anti competitive practices. However, in June 2001, the US Court of Appeals reversed this ruling, but said that Microsoft did have a monopoly in the market and had violated US antitrust laws. In August 2001, Microsoft appealed to the US Supreme Court to overturn the ruling that Microsoft was an illegal monopoly. A final verdict on the case was expected by October 2001.

THE TRIAL BEGINS

In October 1997, the DOJ began antitrust investigations to determine whether Microsoft was violating a 1994 consent decree by compelling PC makers to ship its Internet browser free with Windows 95. Joel I. Klein, Assistant Attorney General for the antitrust division, remarked, "This kind of productforcing is an abuse of monopoly power--and we will seek to put an end to it." Justice Thomas Penfield Jackson of the US District Court heard the case and, in May 1998, gave both the parties five months to gather 12 witnesses each, and to fight the suit.

?? Questions to Ponder ??