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The market environment refers to the various external factors that can affect a business’s operations and performance, including economic, social, technological, legal, and political factors. Understanding the market environment is critical to making informed business decisions, and there are several layers of analysis that businesses can use to gain insight into these external factors.
1- Market macro environment
The first layer of market environment analysis is the macro environment. This layer involves analyzing the broad economic, social, and political forces that can impact a business. Tools that businesses can use to analyze this layer include PESTLE analysis, which stands for political, economic, sociocultural, technological, legal, and environmental analysis. This type of analysis helps businesses to identify trends and changes in the market environment that could impact their operations.
How Google implemented Market macro environment analysis?
Google is an excellent example of a company that has successfully analyzed and adapted to changes in the macro environment. As technology has evolved, Google has adapted its business model to stay ahead of the curve.
For example, when mobile devices became more popular, Google developed mobile-friendly versions of its products and services. When concerns about online privacy increased, Google implemented new privacy features and made changes to its data collection practices.
2- Market Industry Environment
The second layer of market environment analysis is the industry environment. This layer involves analyzing the specific industry in which a business operates, including competitors, suppliers, customers, and regulations.
Tools that businesses can use to analyze this layer include Porter’s Five Forces analysis, which looks at the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and the intensity of competitive rivalry within the industry.
How IBM Implemented Market Industry Environment Analysis?
IBM is an example of a company that has successfully analyzed and adapted to changes in the industry environment. As technology has evolved, IBM has shifted its focus from hardware to software and services. This shift has allowed the company to differentiate itself from competitors and stay relevant in a highly competitive industry. IBM has also developed partnerships with other companies, such as Apple and Salesforce, to expand its reach and offer more comprehensive solutions to customers.
3- Market Micro Environment
The third layer of market environment analysis is the micro environment. This layer involves analyzing the specific factors that can impact a business’s operations, such as suppliers, customers, and competitors.
Tools that businesses can use to analyze this layer include SWOT analysis, which looks at a business’s strengths, weaknesses, opportunities, and threats.
How IBM & Google Implemented Market Micro Environment Analysis?
Both Google and IBM have conducted micro-environment analyses to gain insight into the specific factors that impact their operations.
For example, Google regularly collects and analyzes customer feedback to improve its products and services.
IBM conducts regular competitor analyses to stay informed about changes in the market and to identify potential threats and opportunities.
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