Question

Explain the effect of globalisation on the Financial Planning Environment. Include political, legal and other environmental factors within your explanation.

Answer 1

The marketing environment of a business consists of both internal and external environments. External environment is of 2 types : micro and macro environment.

MACRO ENVIRONMENT : It is also known as broad environment. It comprises of factors which affect the industry but do not directly affect the business. They are :

Demographic environment : It is made up of people who constitute the market. It is characterised based on the grouping of people according to their age, gender, race, location and occupation etc..

Technological environment : It comprises of innovation, research and development of new technologies. It is dynamic in nature. At the same time, it is the biggest threat as well as opportunity to the business.

Global environment : It takes the natural environment where the business operates into consideration like climate changes, natural disasters, pollution etc..

Social environment : It differs from place to place. It considers lifestyle, culture, beliefs, values etc of the people in that region.

Political and legal environment : It incudes the laws and policies of the government in the country. Some groups and agencies which affect the working of industry are also taken into consideration.

Economic environment : It is made up of factors which influence the customer's purchasing and spending manner. Some of them are GDP, interest rates, income distribution etc..