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06 - Environmental Forces

VIEWS: 2 PAGES: 47

									      CHAPTER 6
ENVIRONMENTAL FORCES
ENVIRONMENTAL FORCES
       Demographic

       Economic

       Political

       Cultural

       Natural Disasters
DEMOGRAPHIC ENVIRONMENT

      Changes in Population

      Changes in Age

      Changes in Family Structure
CHANGES IN POPULATION
      U.S. Population

      State Population

      Rural/ Urban Population
U.S. POPULATION ESTIMATES

Category         2000    2050
White            69%     50%
Hispanic          13%     25%
Asian-American     4%      8%
Black             13%     15%
Other              1%      2%
                  100%    100%
             STATE POPULATION
                2000 CENSUS
                  (Millions)
                            % Change    %Change
State         Population   1990-2000   2000-2008

California      33.9       +13.8         +8.5
Texas           20.9       +22.8         +16.7
New York        19.0       + 5.5         +2.7
Florida         16.0        +23.5        +14.7
Ohio             11.4       + 4.7        +1.2
% OF POPULATION BY CENTRAL
CITIES, SUBURBS, AND RURAL


Area             1960   2000

Central Cities   32.3   30.3
Suburbs          30.9   50.0
Rural            36.8   19.7
PERCENT OF U.S. POPULATION
     LIVING ON FARMS

      1900         39%

      1930         25%

      1960          8%

      1990          2%
CHANGES IN AGE
   Age

   Cohort Groups

   Marriage

   Seniors
% U.S. DISTRIBUTION BY AGE


Age          1960       2000

Under 15     31.1       21.4
15-24        13.4       13.9
25-44        26.2       30.2
45-65        20.1       22.0
Over 65       9.2       12.4
COHORT GROUPS
GROUP           BORN

Generation Y    1978-2002
Generation X    1965-1977
Young Boomers   1954-1964
Older Boomers   1942-1953
Empty Nesters   Before 1942
  AVERAGE AGE OF FIRST
   MARRIAGE IN THE U.S.


Sex       1970     2003

Female    20.8     25.3

Male      23.2     27.1
       CHANGING IN FAMILY
          STRUCTURES


   Traditional Family Household

   Married Couples Working

   Married and Unmarried Households
TRADITIONAL FAMILY
   HOUSEHOLDS

   Working Father
   Stay-at-home Mother
   School-age Children

       % of Households
    1950             70%
    2000               5%
MARRIED COUPLES WORKING


Year   Single Earner   Dual Earner


1960      68%             32%

1980      44%             55%

2000      34%             66%
   MARRIED AND UNMARRIED
        HOUSEHOLDS


          Married     Unmarried
Year     Households    Households

1950       79%           21%
2000       52%           48%
2009                    Over 50%
DIVERSITY OF UNMARRIED
     HOUSEHOLDS

       Cohabitation

       Longer Life Spans

       Increased Divorces

       Gay/Lesbian
ECONOMIC ENVIRONMENT

     Two important economists

     Role of Competition

     Major Anti-Trust Laws

     Creative Destruction
TWO IMPORTANT ECONOMISTS
Adam Smith, Wealth of Nations.
“Self-interest of business people (profits) will
lead to the greatest economic wealth”.
Competition keeps sellers from making
excessive profits.

Joseph Schumpeter
Innovative and creative products will destroy or
replace many existing products. This is called
“creative destruction”.
ECONOMIC ENVIROMENT

       Inflation

       Unemployment

       Economic Growth (GDP)
      ROLE OF COMPETITION

Government Viewpoint
 Maintain healthy competitive economic system

Seller Viewpoint
  Achieve a sustainable competitive advantage

Buyer Viewpoint
  Wants perceived value for their money
MAJOR COMPETITION
      Direct Rivalry

      Buyers

      Suppliers

      New Entrants
    MAJOR ANTI-TRUST LAWS

Sherman Act-1890
 Monopoly is illegal

 Restraint of trade is illegal



Clayton Act-1914
 Predatory pricing and tying agreements are
  illegal if they substantially reduce competition
MARKET STRUCTURE

     Pure Competition

     Oligopoly

     Monopoly
PURE COMPETITION

   Many sellers and buyers

   Homogeneous product

   Perfect information

   Rational decision - makers
   CREATIVE DESTRUCTION

 E-Readers                Text Books



Mobile Phone               iPhone

Desktop        Laptop           Smart

Computer       Computer         Phones
CREATIVE DESTRUCTION
     MANAGERS

    Jeff Bezos

    Sergey Brin & Larry Page

    Steve Jobs
POLITICAL ENVIRONMENT

    Political Levels

    Political Conflicts

    Political Consequences
POLITICAL LEVEL
      Local

      State

      Federal

      International
    LOCAL POLITICAL
     ENVIRONMENT

   Health Department Regulations

   City Zoning Laws

   Nimby Concept
    STATE POLITICAL
     ENVIRONMENT
   Licensing for Professional Services

   State New Automobile Retail Laws

   Triple Distribution for Beer and Liquor
    FEDERAL POLITICAL
      ENVIRONMENT

   Security & Exchange Commission

   Federal Drug Administration

   Federal Reserve Board
INTERNATIONAL POLITICAL
     ENVIRONMENT

       Tariff Restrictions

       NAFTA

       Immigration Laws
POLITICAL CONFLICTS

   Business vs. Government

   Business vs. Business

   Business vs. Consumers
    BUSINESS VS. GOVERNMENT

   Federal Trade Commission regulates false and
    misleading advertising.

   OSHA, EPA, and the FDA are charged with regulating
    health and safety areas.

   Federal Reserve Board makes monetary and fiscal
    policy decisions for the government.
      BUSINESS VS. BUSINESS


   Sunday Blue Laws - many retail goods could
    not be sold on both Saturday and Sunday.

   Banking, Insurance, and Brokerage firms
    could not own each other.

   Out-of-State Wine Shipping Laws
      BUSINESS VS. CONSUMERS

   A home buyer has 72 hours to reject a sale
    made in the home.

   A check-clearing law requires banks to clear
    consumer checks within a number of days.

   A credit for women law requires credit card
    companies to give credit to women under
    similar conditions as men.
POLITICAL CONSEQUENCES
       Statutory law

       Administrative law

       Court rulings

       Unintended consequences
     UNINTENDED
CONSEQUENCES OF LAWS

        Catfish Farms

        Impact, Texas

        Hummer
CULTURAL ENVIRONMENT

    Changing American Values

    Business Culture Values

    Cultural Celebrations
     CHANGING
  AMERICAN VALUES
Traditional Values   Modern Values

Live to Work         Work to Live

Let the Buyer        Let the Seller
Beware               Beware

Single-Wage          Dual-Wage
Earner               Earner
BUSINESS CULTURE VALUES

       Time

       Space

       Business Etiquette
CULTURAL VALUE OF TIME
          Mexico

          Saudi Arabia

          Indonesia

          Belize
CULTURAL VALUE OF SPACE

       Business cocktail events

       Lining up at airports

       Location and status of office
    BUSINESS ETIQUETTE

   Don’t talk business on first meeting in
    China

   Don’t schedule a breakfast meeting in
    France

   Bargaining is expected in Latin America
CULTURAL CELEBRATIONS
        New Year

        Juneteenth

        Ramadan

        Quinceanera
NATIONAL DISASTERS

       Hurricanes

       Earthquakes

       Floods

								
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