Knowing all the factors that surround the company is a fundamental factor in developing a serious market analysis.
In many occasions the factors that are out of the control of the company directly affect it, so the knowledge and evaluation of external factors is a priority when making any business decision.
Following is a brief summary of the so-called "MARKETING ENVIRONMENT".
WHAT IS THE ENVIRONMENT?
There are several notions of what the company environment is, here are some (it is planned to generate a notion, not a definition)
- Environment is the environment, environment, macro environment, environment or context within which a company operates. Companies depend on the resources they obtain and the results they obtain in relation to the environment that surrounds them.
- Important: Any evaluation of the company's performance will take into account the external situations it faces.
- For example: A company with reduced earnings in a difficult environment will be better evaluated than a company with the same results in a boom period.
- Any business decision that is made within a company depends on the context in which it lives, that is, on its environment.
CHARACTERISTICS OF THE ENVIRONMENT:
The notion of environment has the following characteristics:
- It is ambiguous: This means that it can be susceptible to various interpretations.
Environment: Positive Negative, time to buy, time to sell, acceleration, deceleration etc…
- It is changing: It follows the logic of the cycles, the conditions change. It is complex: It depends on infinity of variables that act randomly on it. It is Random: Since it does not follow natural but social laws. It is "generally" unpredictable: It is important. It should be noted that market analyzes are generally based on growth assumptions and projections, which means that reliability is never 100%. It is sometimes turbulent: The environment is always subject to the risk of unexpected situations.
FACTORS AFFECTING THE ENVIRONMENT:
There are two types of factors that affect the environment:
INDIRECT ACTION FACTORS:
It is the set of factors that influence the operation of the company and the decision-making of managers. (EXTERNAL) DIRECT ACTION FACTORS: These are the factors that condition the operation and development of the company. (INTERNAL)
FROM THE COMPANY'S POINT OF VIEW, THE INDIRECT ACTION FACTORS ARE:
Physical means: Infrastructure, communications Demographic factors: Population, Economic factors Recession boom, Financial: Confidence, interest rates, inflation etc… Technology: Technological competence and progress, Social: Acceptance and culture. Political: Type of Government, guidelines regarding the company sector, Legislative: Obstacles or facilities for the development of the company. Union: Trends in the sector.
DIRECT ACTION ENVIRONMENT OF THE COMPANY:
Client: Preferences, ability to pay, Competition: Ways to face your initiatives.
Substitutes: Search for alternatives, Suppliers: Management of purchasing policies and inventories Capital Market: Capacity of internal indebtedness, own sources of financing, Employee: Management of internal HR situations, personnel management, etc.
In short, the idea is that an appropriate analysis of the environment will be essential in determining the company's long-term policies, and such analysis should be the basis of future forecasts for the firm's portfolio management.
