Macro environment refers to forces outside an organization that are not within its control. These factors influence the industry and the organization within the industry.
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Macro environment analysis is an important component of strategic management. This is because it produces much of the information required to assess the outlook for the future. The macro environment factors are technology, legal, economy, social cultural and political.
According to the company website, the mission of AT&T is “to exploit technical innovations for the benefit of AT&T and its customers by implementing next-generation technologies and network advancements in AT&T’s services and operations” (Phillips, 2012)
AT&T aims at closing the gap in its marketing goals. This is by focusing more on human experiences. AT&T has a brand flagship whose main goal is on services provided rather than the handset itself. The firm also aims at mobile applications.
It has made use of television marketing and it aims at establishing itself in the market. They claim to have the largest coverage in North America. They use Television to show their cell phone models, promotions by giving free phones, billboards across the country and social media Hooley, Piercy & Nicoulau (2008).
This refers to exchange rates applied, the rate of interests, inflation, taxation, and level of economic growth. High economic growth boosts the demand for AT&T products, while high rates of interest reduces the level of investment due to high prices. Inflation leads to higher wage demands from employees and this raises costs. Strong currency is detrimental as it makes exports expensive.
The economic debt crisis and the US levels of debt have forced AT&T’s clients to cut their spending on the firm’s products. AT&T survived the economic downturn, and the business is booming after the recession. The currency is performing well compared to other major currencies, which makes export cheaper for the company Hooley, Piercy & Nicoulau (2008).
Laws characterize the political environment and regulations set out by the government that show the extent to which government can intervene in the industry. AT&T is subject to American laws and regulations. The regulations that they make affect the other factors such as economic and technological environment.
The laws include taxation policy, environmental friendly policy and, product manufacturing policy. The taxation of telecommunication gadgets is another intervention made by the government, which hurts the industry.
Law is an important component of the macro environment. AT&T makes sure that it complies with all the laws that govern the industry as set out by the country. Law has the effect of rendering some services obsolete. Changes in legal position can stop certain services and this can make a firm to have huge losses.
The company may be facing legal battles in courts, which if they were successful would lead to huge cash outflow, which would affect the company’s balance sheet position (Cravens and Piercy, 2009).
This refers to the shared beliefs of the population. When there is a change in social trend, it affects the total demand for a company’s products.
Consequently, it affects the willingness and availability of people to work. AT&T is a leader in social trends as it not only follows trends, but it starts them. People may have beliefs that use of telecommunications gadget leads to health complications such as cancer. This erodes the revenues of AT&T.
With a rapidly changing technological environment, AT&T has managed to move with the change. Development and introduction of new technologies has led to revolution in new product development, reducssed costs, and improved quality. Technology reduces costs incurred by reducing wastage, it improves quality of work done, and it leads to innovation.
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The technological development helps the organization as well as the consumers. AT&T, being more of an electronic industry has succeeded in technology, and it has a competitive advantage because of its revolutionary products such as 4G technology and wireless growth (Cravens and Piercy, 2009)..
The macro environment affects the firm’s operations positively and negatively. The firm needs update on macro environment. AT&T is in a dynamic environment with many players. The rapidly changing factors like level of technology, demographics, and economic conditions have not spared the firm.
However, the firm has managed to stay aloof of others due to its strategic decisions concerning macro environment. Therefore, analysis of macro environment factors is necessary for the success of the business.
Cravens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). New York, NY: McGraw-Hill.
Hooley, G., Piercy, N. F., & Nicoulau, B. (2008). Marketing strategy and competitive positioning (4th ed.). Upper Saddle River, NJ: Pearson.
Phillips, J. (2012, February 25). Mission & Vision. Retrieved from AT&T Enterprise: https://about.att.com/innovation/technology_research_museum