Unit 3 Marketing Understanding macro and micro environments

Unit 3: Marketing Understanding macro and micro environments Porter’s five forces 9/13/2021 Fda Business 1

Objective ► Understand how macro and micro environmental factors influence marketing decisions and strategies ► Over the next 2 weeks we are going to investigate and apply Porters five force analysis and PESTLE analysis 9/13/2021 Fda Business 2

The macro environment ► The macro environment is concerned about broad trends and patterns in society and help identify opportunities/threats 9/13/2021 Fda Business 3

Macro environment factors: PESTLE analysis Q: What does ‘pestle’ stand for? ► POLITICAL ► ECONOMICAL ► SOCIO-ECONOMICAL ► TECHNOLOGICAL ► LEGAL ► ENVIRONMENTAL 9/13/2021 Fda Business 4

The micro environment ► The micro environment considers all factors that have a direct impact on a business and what it does in a given business market. It also considers internal factors which may influence marketing strategy. 9/13/2021 Fda Business 5

Micro environment factors ► Stakeholders (internal and external) ► Direct and indirect competitors ► Porter’s five forces analysis 9/13/2021 Fda Business 6

Exercise 2 ► Think of as many internal and external stakeholders that can exist in a medium to large size private sector business ► How do you think these different categories of stakeholders can influence the marketing strategy of a business? 9/13/2021 Fda Business 7

Porter’s five forces analysis ► Developed by Michael Porter in 1979 to help analyse the competitive environment a business exists in ► Def: “is a means of identifying the forces which may affect the level of competition in an industry” ref: Johnson & Scholes (1999) Exploring Corporate Strategy 9/13/2021 Fda Business 8

PORTERS FIVE FORCES 9/13/2021 Fda Business 9

Porter’s five forces analysis Porter identified five competitive forces which should be analysed in any given industry: ► The threat of new entrants to the industry ► The threat of substitute products/services ► The bargaining power of customers ► The bargaining power of suppliers ► The rivalry amongst competitors in that industry 9/13/2021 Fda Business 10

Activity Case study and application ► Working in pairs you are to research the supermarket industry using the linked keynote report and apply Porters Five force analysis to your findings. ► You will be expected to present a seminar to your fellow students on your findings next session 9/13/2021 Fda Business 11

Further research ► BPP book chapter 4 ► In particular, read/research the in depth contents of Porter’s Five Forces 9/13/2021 Fda Business 12