External environment scanning for a business
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1. Market Analysis and Strategies
1.1 Market Analysis:
The market analysis of WRSX group would involve PESTEL analysis to understand its external environment, where it exists. A firm exists in layers of environment, which involves markets, competitors, industry, and finally external environment (fig 1). Any change in any of the layer, directly or indirectly affects the firm.
Figure 1: Layers of business environment
Source: (Jhonson, et al., 2006, p. 64)
PESTEL Analysis
Any changes in the external environment, it is being observed that the most affected is the marketing budgets of the companies. Companies cut their marketing budget first if there is any change in the environment, which is not suitable for WRSX’s group being an advertising and marketing company.
Figure2: PESTEL Analysis
Source: (Jhonson, et al., 2006)
Political: Stringent laws of government to protect employees affecting employment practices of the companies. The data protection laws introduced in the US and Western Europe have made the industry susceptible to litigation and as such most marketing communications groups have introduced a strong regulatory policy on the use and disposal of personal data (Carnelley, n.d.).
Economic: World economy is very unpredictable and it has become risky and difficult to attract clients due to fluctuating growth rates, interest rates and currency exchange rates (Carnelley, n.d.).
Social: In global environment, there exist different cultures, so WRSX need to focus in understanding varied cultures to expand. Muslim community is growing very fast, and due to conflicts and terrorist activities there has been a gap between Western and Muslim community. The demographics and values are also changing.
Technological: Internet revolution has given prominence to interactive agencies and digital media. Currently the advertising companies those are providing specialised advertising and marketing services for digital space (Mitcham & McLiver, 2011).
Environmental: Rise of Asian market, is a challenge for US market dominance (Carnelley, n.d.). There is a growth in non-American multinationals especially China, Japan and India.
Legal: Changes in the regulatory and legal environment for advertising and marketing companies around the world (Carnelley, n.d.).
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