Question

Macro-Environmental Impact:

• Discuss how any four of the six macro-environmental forces will impact (positively or negatively) the success of Nike shoes product after it has been (hopefully) established in the market.

• Be as specific as possible in your description of the likely impact in each instance.

Answer 1

Macro environment are the environment which lies external to the organisation in which it operates. However, the external environment has a direct and indirect impact on the fuctioning of the organisation and the organisation needs to adapt to any changes in the external environement. There are six macro level environment forces:

a) Socio-Cultural Environment

b) Technological Environment

c) Economic Conditions

d) Ecological and Physical Environment

e) Political and Legal

f) Demography

If a product such as Nike shoes has been introduced in the market, there will be lots of such macro factors which will directly impact the success or failure of the product in the market.

a) Demography: One of the most important factor which impacts the success of the product is the demography of the population as the users of the product are estimates as per the demography. Suppose the market caters to the population consisting of old aged people who are geenrally recommended comfortable sports shoes for walking, this demography can boost the same of Nike shoes in the market. On the other hand, if the demography consists of lots of working population, both male and female, it can have negative impact on the sale of Nike shoes as they may prefer purchasing formal shoes and sandals.

b) Socio-Cultural Environment: The social and cultural environment of the market also plays a very important role in the success of the product. Suppose the population which the market caters, are habituated for regular workout or any kind of physical exercises, sports shoes will be high on demand. In such scenario, there will be high chances of success of the product.

c) Economy: The economy is one of the most important factors which guides the sale of the product in the market. In case of economic boom with more per capita income and higher marginal propensity to consume, the consumers may end up buying more. In such a scenario, if Nike could come up with expanded variets of shoes and footwear, the demand for their product may increase.

d) Ecological and Physical Environement: The Physical environment of the location defines the kind of product which might be demanded from the industries. In case of places near to beach, a person may not be willing to purchase shoes as it might not be convinient as per the physical environment of the place. In such places, people prefer wearing flat and comfortable slippers. Hence, Nike shoes might not be demanded. However, in mountaneous region, people will definitely be looking for good sport shoes for hiking and climing. Here, Nike has more scope to establish its market.

Therfore, before launching any product in the market, it is of utmost importance to have a strong market based research in order to be aware of the usability of the product as per the demand of the population and to know more about the specific group whom it has to cater.