Which of the factors listed in Table 3.1 might have the most strategic relevance for your industry?

Table 3.1

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Component Political factors Economic conditions Soclocultural forces Technological factors Environmental forces Legal and regulatory factors Description Pertinent political factors include matters such as tax policy, fiscal policy, tariffs, the political climate, and the strength of Institutions such as the federal banking system. Some political policies affect certain types of Industries more than others. An example is energy policy, which clearly affects energy producers and heavy users of energy more than other types of businesses. Economic conditions include the general economic climate and specific factors such as interest rates, exchange rates, the Inflation rate, the unemployment rate, the rate of economic growth, trade deficits or surpluses, savings rates, and per-capita domestic product. Some Industries, such as construction, are particularly vulnerable to economic downturns but are positively affected by factors such as low Interest rates. Others, such as discount retalling, benefit when general economic conditions weaken, as consumers become more price-conscious. Sociocultural forces include the societal values, attitudes, cultural influences, and lifestyles that Impact demand for particular goods and services, as well as demographic factors such as the population size, growth rate, and age distribution. Sociocultural forces vary by locale and change over time. An example is the trend toward healthier lifestyles, which can shift spending toward exercise equipment and health clubs and away from alcohol and snack foods. The demographic effect of people living longer is having a huge Impact on the health care, nursing homes, travel, hospitality, and entertainment Industries. Technological factors include the pace of technological change and technical developments that have the potential for wide-ranging effects on society, such as genetic engineering. nanotechnology, and solar energy technology. They include Institutions involved in creating new knowledge and controlling the use of technology, such as R&D consortia, university- sponsored technology Incubators, patent and copyright laws, and government control over the Internet. Technological change can encourage the birth of new Industries, such as drones, virtual reality technology, and connected wearable devices. They can disrupt others, as cloud computing, 3-D printing, and big data solution have done, and they can render other Industries obsolete (film cameras, music CDs). These include ecological and environmental forces such as weather, climate, climate change, and associated factors like flooding, fire, and water shortages. These factors can directly Impact Industries such as Insurance, farming, energy production, and tourism. They may have an Indirect but substantial effect on other Industries such as transportation and utilities. The relevance of environmental considerations stems from the fact that some Industries contribute more significantly than others to air and water pollution or to the depletion of Irreplaceable natural resources, or to Inefficient energy/resource usage, or are closely associated with other types of environmentally damaging activities (unsustainable agricultural practices, the creation of waste products that are not recyclable or blodegradable). Growing numbers of companies worldwide, In response to stricter environmental regulations and also to mounting public concerns about the environment, are implementing actions to operate in a more environmentally and ecologically responsible manner. These factors include the regulations and laws with which companies must comply, such as consumer laws, labor laws, antitrust laws, and occupational health and safety regulation. Some factors, such as financial services regulation, are Industry-specific. Others affect certain types of Industries more than others. For example, minimum wage legislation largely impacts low-wage Industries (such as nursing homes and fast food restaurants) that employ substantial numbers of relatively unskilled workers. Companies in coal-mining, meat-packing, and steel-making, where many jobs are hazardous or carry high risk of injury, are much more impacted by occupational safety regulations than are companies in Industries such as retalling or software programming.