Business Studies
Business Studies
How Macrolevel Factors In an External Environment Could Have (Or Already Have) Impacted the Structure of the Online Social Networking Industry in the Global Marketplace
Macrolevel factors in the external environment are those factors beyond the control of an organisation. This is because the position of such factors is outside the organisational system. However, they are imperative in the determination of the objectives for the respective organisation. Such factors include political, economic, social, technological and competitive factors (Greenspan, 2008). This proposal focuses on the impact of such factors to the structure of online social networking industry within the global marketplace. It is necessary to break down each of these factors and discuss how each affects the social networking industry.
Political Factors
Political factors cut through the governmental permissible features of a business. Such factors have a significant impact on the social networking industry since the federal, state and foreign governments form a substantial body in regulation, deregulation, subdivision, and employment of people within any organisation. There is a lot of interdependence among economies, markets and government concerning business activities. The social networking industry would face many transformations based on the different government-directed tax regulations, trade quota, regulatory framework and bureaucratic processes among governments (Nambisan, 2009). Based on such complexities, the social networking strategists would have to spend more time, resources anticipating, and manipulating free policy actions. It would imply that the industry ensures that it holds meetings with different government officials and policymakers to get updates on the political advances.
Economic Factors
Economic analysis is an imperative phase in the social networking industry for strategy development. This is because such factors have a direct influence on the latent attractiveness of the industry’s business activities. There are many indications in the economic analysis of the global market. For instance, the US shifting to a service economy may pose an exceptional opportunity for the social networking industry. However, it is notable that the spending propensity for most people around the world is transforming due to the economic recession. Globally, the interest rates and inflation rates are high. As a result, few people opt to spend time in the social networks like MySpace and Facebook. Individuals usually consider productive activities that are income generating and reduce their leisure time to work on those activities. The ultimate impact on the social networking industry is the reduction in profitability (Greenspan, 2008). A clear example of economic recession in the world is the US and other key world economies that suffer relentless misrepresentation. The impact is investors resorting to work force cutback. The social networking industry should consider an analysis of the economic forces every now and then.
Social Factors
The social network involves an analysis of people’s culture, their demographic disposition as well as the environmental profiles (Fleisher, 2007). Such factors affect the way people live, work and consume. Cultural values vary from one society to another. This also affects the way they hold views about the social networking industry. Some countries like the US, more people are growing older and less interested in activities like Facebook and MySpace. Research indicates that the social networking industry affects more youth, as opposed to the elderly generation. The moment global demography shifts to the older generation they receive fewer services from the social networks. This eventually reduces profitability of the industry. The industry should consider conducting social factors analysis. This will establishes what impresses older people especially for a country like US where there is demographic shift.
References
Greenspan, A. (2008). The Age of Turbulence: Adventures in a New World. New York: Penguin Adult
Fleisher, C.S. (2007). Business and Competitive Analysis: Effective Application of New and Classic Methods. Chicago: FT Press.
Nambisan, S. (2009). Information Technology and Product Development. New York: Springer.
