Strategic Management ( 6 questions)
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strategic_management_2b.pptCopyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Social, Cultural, Demographic
Environment
Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors
Social, Cultural, Demographic & Environmental Forces
U.S. Facts
- Aging population
- 2025 = 18.5% population 65+ years
- Less Caucasian
- Widening gap between rich & poor
Social, Cultural, Demographic & Environmental Forces
Facts (as of March 9, 2015)
- World population approaching 8 billion
As of March 9, 2015 = 7,300,214,150 - World population = 8 billion by 2024
- World population = 9 billion by 2054
- U.S. population = 324,341,765
- Trends
- More American households with people living alone
- By 2021 Hispanics will be largest minority group
- Aging Americans – affects all organizations
- Population shift to the south and west
- Interest in fitness and exercise? Increasing obesity?
- Decimation and degradation of the natural environment
Social, Cultural, Demographic & Environmental Forces
Social-Cultural Environment
Race & Gender Issues
Cultural Values
Self-image
Views of others,
organizations, & society
International Issues
Demographics
The Company’s Macro-environment
Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics
Demographic environment is
important because it involves
people, and people make up
markets
Demographic trends include age,
family structure, geographic population shifts, educational characteristics, and population diversity
Demographic Environment
Age structure
The Company’s Macro-environment
Changing age structure of the population
Baby boomers include people
born between 1946 and 1964
Most affluent Americans
Demographic Environment
Note to Instructor
There are many Web sites targeted to boomers including this link to Boomers International. Before following the link it might be interesting to ask the following:
Discussion Questions
What type of information boomers might be seeking?
The Company’s Macro-environment
Generation X includes people
born between 1965 and 1976
High parental divorce rates
Cautious economic outlook
Less materialistic
Family comes first
Lag behind on retirement savings
Demographic Environment
Millennials (gen Y or echo boomers) include those born between 1977 and 2000
Comfortable with technology
Includes
Tweens (ages 8–12)
Teens (13–19)
Young adults (20’s)
Demographic Environment
Quarter-Life Crisis
Quarter Life Crisis
- The quarter life crisis is a term applied to the period of life immediately following the major changes of adolescence, usually ranging from the late teens to the early thirties. The term is named by analogy with the mid-life crisis.
- Characteristics of quarter-life crisis may include:
confronting one's own insecurity concerning ability to love oneself, let alone another, personal insecurity regarding present accomplishments re-evaluation of close interpersonal relationships lack of friendships or romantic relationships, disappointment with one’s job
Quarter-life Crisis
- tendency to hold stronger opinions
- boredom with social interactions
- financially-rooted stress, unexpectedly high cost of living
- loneliness, depression and suicidal tendencies
- a sense that others are doing better than oneself
- frustration with social skills
The Company’s Macro-environment
Generational marketing is important in segmenting people by lifestyle of life state instead of age
Demographic Environment
Changing Family
The Company’s Macro-environment
More people are:
Divorcing or separating
Choosing not to marry
Choosing to marry later
Marrying without intending to have children
Increased number of working women
Stay-at-home dads
Demographic Environment
Growth in U.S. West and South and decline in Midwest and Northeast
Moving from rural to metropolitan areas
Changes in where people work
Telecommuting
Home office
Divorcing or separating
Demographic Environment
Geographic shifts
The Company’s Macro-environment
Demographic Environment
Increased Diversity
Markets are becoming more diverse
- International
- National
- Includes:
- Ethnicity
- Gay and lesbian
- Disabled
Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors
Cultural Environment
People’s view of themselves
Yankelovich Monitor’s consumer segments:
Do-it-yourselfers
Adventurers
People’s view of others
More “cocooning”
Cultural Environment
Shifts in Secondary Cultural Values
Note to Instructor
Do-It-Yourselfers—Recent Movers:
- Active consumers also view the experience as a form of self-expression.
- They view their homes as their havens
- View their projects as personal victories over the high-priced marketplace.
Adventurers:
- Rarely follow a single path or do the same thing twice.
- View the experience as far more exciting than the entertainment value.
- They are more likely to engage in activities most think are too dangerous.
The Company’s Macro-environment
People’s view of organizations – Tea Party Movement
People’s view of society
Patriots defend it
Reformers want to change it
Malcontents want to leave it
Cultural Environment
Shifts in Secondary Cultural Values
Natural environment
The Company’s Macro-environment
Natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities
Trends
Shortages of raw materials
Increased pollution
Increase government intervention
Environmentally sustainable strategies
Climate Change – Extreme Variations
Natural Environment
Note to Instructor
This Web link connects to greenbiz.com. There are several Web sites like this that provide information on business as to how to practice green strategies including green marketing.
Occupation shifts
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
- Changes in the Workforce
- More educated
- More white collar
Communication & Promotion
Electronic Media / Social Media
Saturation Of Messages
Need for Differentiation
Struggle to Gain Attention
Trading Up - Emotional Satisfaction
& Scaling Down - Commodities
http://www.youtube.com/watch?v=MtwVQhEXCcc
Siri Commands
- Speedup of International Communication & Transportation
- Manufacturing Moving to Low Cost Producers
- Rise of Trade Blocs- BRIC + SA
- Severe Debt for Countries, International Companies
- Increasing Use of Barter
- Move to Controlled Market Economics - Russia, China
- Rapid Dissemination of Global Lifestyles
- Development of Emerging markets
- International Alliances / Global Expansion
- Increasing Religious & Ethnic Conflicts & Arab Spring Uprisings
Global Forces
Affecting Business
The Current Business Environment
What current major factors in a company’s external environment need to be addressed as part of the strategic planning process?
