The Impact of Macro and Micro Environmental Factors on International B Case Study

The Impact of Macro and Micro Environmental Factors on International Business Activities - Case Study Example Macro environmental influences can better be explained by the use of the PESTEL framework. According to Johnson et al (2006), the PESTEL framework is a framework that can be used to categorise the factors that influence the business environment of an organisation into six main types including Political Influences, Economic influences, Technological influences, Socio-cultural Influences, Environmental influences, and Legal influences. The business environment of Inditex is indifferent as Inditex is affected by governmental laws, international laws, competition from other fashion distribution companies, change in interest rate, politics, technology (Dixon 2007) etc. Industria de Diseno Textil S.A (Inditex) together with its subsidiaries operates as a fashion distribution worldwide (Inditex Review 2008). The company's operations include various phases of the fashion process, such as design, manufacture, logistics and distribution to its own managed stores (Inditex Review 2008). The company offers eight commercial concepts including Zara, Pull, Bear, Massimo Donati, Besishka, Stradivarius etc. The company remains a strategic and a key player in the European fashion and distribution market. For example, despite the global economic crisis, the company announced flat same stores sales for 2008 (Inditex Review 2008). ... The company's operations include various phases of the fashion process, such as design, manufacture, logistics and distribution to its own managed stores (Inditex Review 2008). The company offers eight commercial concepts including Zara, Pull, Bear, Massimo Dolti, Besishka, Stradivarius etc. The company remains a strategic and a key player in the European fashion and distribution market. For example, despite the global economic crisis, the company announced flat same stores sales for 2008 (Inditex Review 2008). However, as part of the mega-environment in which the company depends on to effectively carry out its activities, the creator of the Zara fashion chain is not impervious to the global recession (Inditex Review 2008). 2.0 The PESTLE Framework According to Dixon (2007), the PESTLE framework is a way to understand the industry's external environment, which includes Political, Economic, and Social and Technological analysis. These factors will influence company long-term decisions in an industry. Today's business environment is increasingly becoming more turbulent, chaotic and challenging than ever before and to survive, it is vital that a firm can do something better than its competitors ( Wonglimpiyarat 2004:1). Globalization has not only altered the nature and the intensity of competition but has had to dictate and shape organisations in terms of what consumers want, how and when they want it and what they are prepared to pay for it (Hagan 1996:1). Kanter (1995:71) on his work of "Mastering Change" argues that success in the present day business is not for those companies that re-engineer the way they do things, or for those fixing the past. According to Kanter (1995), such an action will not constitute an adequate response. This is so because success is based on an organization’s ability to create, rather than predict the future by developing those products that will literally transform the way the world thinks and view itself and the needs.