The objectives for this Presentation are to help the reader understand o the role played by each of the

6 environments in business o that these 6 environments can in turn influence each other o that being aware of changes in the environments can help one do business effectively When the reader has completed this Presentation it would expected that they could read information about a marketing, business or international business situation and analyze this in terms of what environments are involved and how they exerted influence

 the 6 environments that effect business are not things you can change they are things you react to o Competitive Environment o Economic / Financial o Physical / Geographic o Political / Legal / Regulatory o Sociocultural / Ethnic / Linguistic o Technological

 How you react to the influences of the 6 environments is the key to your success. You can monitor the changes in an environment and plan accordingly, or you can just react as each situation develops and hope to survive. Successful companies are the ones who see trends developing and plan in advance to deal with the anticipated changes. Understanding the effect of the environments, that influence business, is a major part of a good marketing education

environment includes considerations such as the GDP Gross Domestic Product the financial health of a region
are companies making profits able to hire a lot of workers, so employees have money and they can spend this money on consumer items

currency exchange rate

can the currency of the country be used to purchase required imports currency convertability (relates to "economic sovereignty")

rate of inflation / deflation rate of minimum wage ability of the government to finance infrastructure
fiscal policy (the government's use of taxation) monetary policy (the money supply)

national balance of payments

deficit / surplus

is the region attracting investment In many countries, the economic / financial environment is heavily influenced by the political environment in the context of government rules and regulations as to how businesses make money, as well as how businesses are taxed.

Political / Legal / Regulatory environment

The Political / Legal / Regulatory environment is often a direct consequence of the political parties in power, which represents the popular opinion of the citizens of the region. If the citizens are, for example, pro-Big Business then probably taxation will be modest and there will not be a lot of stringent rules about environmental considerations.If the citizens are very concerned about safety issues, for example, then there will be a lot of rules and regulations governing things such as transportation safety, which will make it more expensive for some companies that have big shipping costs. The rules and regulations created by the politicians, have significant influence on the cost of running a business and the way it can market products and services - for example in Canada there are severe regulations about advertising for alcohol and tobacco

 Examples of influences of the political environment include regulations governing how businesses can interact with overseas companies regulations and laws limiting or restricting importing regulations limiting the operations of foreign companies how the national government is influenced by larger governments or special interests outside the country laws and rules reflecting social/cultural changes in the demographic make-up of the citizens

Sociocultural / Ethnic / Linguistic environment

The Sociocultural / Ethnic / Linguistic environment is more and more influential especially in multi-cultural urban areas such as Toronto, New York, London, etc. For companies selling industrial products, which are often simply marketed by dimensions (size, weight, height etc.) there is not a strong requirement for documents and packaging material to be "culturally sensitive". For companies selling consumer products, particularly food and clothing, it is increasingly important to use all the languages of your customers in your promotion campaigns and communicate effectively with your target demographic.

 Examples of influences of the socialcultural environment include regulations about language use in publications and broadcasts rules and laws about equality based on considerations of gender, race, sexual orientation, maritial status etc. relationships between people of difference faith, ethinicity, language etc. how companies used people in commercials to focus on a "target market segment" cultural/demographic changes and the effect on national symbols, structures uses of colour, slogans, music, slang expressions in marketing promotions business ethics is highly infleunced by changes in cultural norms democracy vs theocracy

 When most people think of the Technological environment the first thing that comes to mind is whether or not they "have the Internet". This is only one part of the world of business. The technological environment could be something as simple as whether or not vendors use Interac to receive payment, or do you have to pay cash. The technological environment also covers road and rail and ocean transportation as well as communications. The ability of a company to be competitive also includes access to high speed communications - some parts of the world have highly developed fiber optic cables, other parts don't even have land lines for phones.

 In some parts of Africa, technology has been delayed for decades, but when it did arrive, they skipped directly to cell phones without even bothering to put in telephone poles and land lines. One of the key characteristics of the technological environment is that the infrastructure is very expensive. It is usually a national government who funds the projects that allow telephone and cell phone networks to be constructed. The degree to which a region has an advanced technological environment is often related to the health of the economic environment which would contain the companies that are making money, and paying taxes, to support the government funds spent on the infrastructure.

 The Physical / Geographic environment includes o weather and the effect on agriculture, travel, building design o distance, distance to travel, time zones o topography - mountains, flat land and the effect on transportation systems o latitude, is it tropical or arctic, number of days and hours of sunshine In some courses we refer to only 5 of the environments; leaving out geography, because most people think the Web transcends geography. In reality, it is not so simple.

 Geography has a big place in e-commerce, especially when you think about the influences of distance to ship products sold online, and when you think about how geography influences the social-cultural environment (language, customs, etc.) Geography also effects weather and weather has an effect on the internet from a technological point of view. Weather situations can cause disruption of communication lines which means the "web is down" in parts of the world effected by a crisis. In some places effected by an earthquake, or tsunami, it can takes days or weeks for telecomm services to be restored and in that time period web based services cannot be accessed in the effected region.

 The geographical environment also includes topographical challenges and advantages. Challenges apply when the land is very steep, which limits the available acreage of arable land so you cannot grow enough crops (like n the sides of steep hills or old volcanoes as in the case of Japan). Advantages take place when the land is flat, and the soil is rich in nutrients, like in our prairie provinces of Manitoba, Saskatchewan and Alberta. This land Canada has in the middle of our country gives us an incredible advantage in terms of being able to grow our own food. Countries who have geographic environmental limitations have to import massive quantities of food which is expensive and, to some extent, effects the national sovereignty.

 While the Competitive Environment is perhaps the most powerful environment in terms of influencing whether we do, or don't do certain things, it should be understood that the Geographic environment is also powerful in the sense that negative things effecting the planet can have long term negative consequences for the ability of companies to sustain their activity examples include New Orleans and the time spent recovering from the hurricane and as well as regions in South Asia effected by the massive tsunami in December 2004

 The Competitive Environment is, perhaps, the most important of the 6 Environments that influence a company involved in marketing, business, International Business or ecommerce. The degree to which one attends to the "other" environments is a consequence of the intensity of the Competitive Environment.

 If the Competitive Environment is intense, meaning, you have a lot of companies trying to - copy your product and knock off your designs, - sell below your price, - use your same themes for advertising, - paying better wages to employees, - sell a slightly different product that can be substituted for your's, it will be necessary to o utilize every resource in the technological environment, o attend to all the considerations of the social/cultural environment o carefully analyze trends in the economic environment o monitor political movements and upcoming changes in the regulatory environment o prepare contingencies for threats from weather extremes and the geographic environment

 .. if the Competitive Environment is NOT intense, then you don't have to use the latest technology, because your customers will not be drawn to anybody else, you do not have to worry about the language considerations of the Social/Cultural Environment, because you have no competition who will provide better service, etc.

 To assist in understanding the importance of "applying" an understanding of the 6 environments, we will analyze a 2003 story in the context of what environments are influencing this particular trade situation. In 2003 Nov 3rd, a story appeared in The Toronto Star. The story came off the Canadian Press feed and was about the current problems Canadians are having resurrecting the Canadian beef export market to Japan

Title: "Don't ship Canadian beef, Japan to tell U.S."

"TOKYOJapanese Agriculture Minister Yukio Hattori will ask the United States to ban the exportation of Canadian beef bound for Japan via the United States, citing continued concerns over mad cow disease, according to media sources in the Japanese capital. The Japanese request comes in response to the American intention to start importing veal from Canada early next year....According to the sources, the Japanese Ministry of Agriculture, Forestry and Fisheries will be requesting that the U.S. start certifying the origin of all its beef products intended for export to ensure that nothing has come from Canada. ...Both the United States and Japan closed their borders to Canadian cattle and beef products after a single animal was diagnosed with mad cow disease in Alberta last May [2003]. The U.S. and Canadian cattle industries were highly integrated up until the mad cow scare. Canada has traditionally sold more than 70 per cent of its live cattle to the United States.

 As a result of losing export sales to U.S. processors, (because of limitations in exporting to Japan) and a high Cdn dollar, Canadian cattle producers may be challenged by beef exporters from Argentina and Australia - two other countries which are international competitors in beef exports. Japanese declines in importing beef may effect the competitiveness of other Canadian meat product exports such as pork or chicken since meat importers usually handle all three of those products. This is a good reminder that sometimes your ability to do business internationally can be effected by the success or failure of other companies in your business sector who are selling slightly different products

 Laws and regulations are a consequence of what the government wants to control, which is a consequence of politics - meaning what is the government doing, or not doing, to maintain the confidence of the people and get reelected. The Political Environment in this situation is influencing the Canadian Beef exporters through the new regulations that the Japanese government has established. These Japanese regulations (which are a consequence of the Sociocultural Environment - people in Japan fear Mad Cow) will mean that U.S. beef producers cannot send beef products to Japan if some of that beef came from cattle they imported from Canada. Example - frozen hamburger patties manufactured in the U.S. for export to the McDonald's outlets in Japan.

 As a result of losing export sales to U.S. processors, Canadian cattle producers will be economically constrained and this will have a negative effect on the economic environment in the province of Alberta and Saskatchewan. The high value of the Canadian dollar from Q2 of 2003 through to Q3 in 2004 will make it further challenging for Canadian beef exporters to sell their product at a competitive price since importers will have to pay more.

Geographic Environment - distance to travel - weather - temperature ?

Distance - Canada is much farther way from the markets in Tokyo and Osaka than Australia. Australia's close distance to Japan gives it an advantage in quoting prices because their shipping costs will be lower and the time the product is "in transit" is less than a Canadian export. If the time "in transit" is less, then the product is more fresh. Canadian exporters are at a disadvantage when the distance to the customer is farther than another source in Australia or New Zealand. Canada is a northern country. We have winter!! American cattle producers have less weather extremes to contend with than Canadian cattle producers, therefore it is more costly for Canadian cattle producers to feed their herds. Because it is colder in Canada, you have to feed the cattle more grain because these animals burn more calories in colder weather. Overall, it costs more to bring animals to market due to the challenges of the weather and our colder climate.

 Agriculture products (a consequence of the richness Geographic environment) are effected by developments in bio-sciences such as hormones which make animals mature faster and gain muscle mass. Technological developments also produce variations in breeding that allow for animals and plants to grow faster and more quickly with varying nutrients. For example: - Canadians have used biotechnology to develop strains of grains that will grow in colder soil and mature in a shorter growing season. Future developments in bio-sciences may mean an end to BSE bovine spongiform encephalopathy [Mad Cow disease] and therefore we might see the removal of restrictions on beef exports since there would no longer be fear of this disease effecting humans.

Technological Environment - bio-science - hormone supplements - DNA analysis of breeding

Environment - languages - lifestyles - diet and food preferences - ways of cooking

Despite great marketing efforts by the Canadian government and the CBEF - Canada Beef Export Federation, Japanese people still do not eat a lot of beef as part of their diet. While the younger generation in Japan eat western style fast foods - the per capita consumption of beef is not as large as in North America and Europe. Japanese protein sources are mostly from the marine products (fish, squid, whale meat, seaweed), pork and poultry they eat. This is a part of Japanese culture which is hundreds of years old and unlikely to change in a short time. Raising cattle in the grasslands of Alberta is also part our Canadian sociocultural environment. If this lifestyle is lost due to problems exporting beef, it will be a big problem to the thousands of families in Western Canada who are 2nd and 3rd generation cattle farmers. These people are not easily converted into website designers or other new millennium workers and it would be heartless to expect them to make such a sacrifice