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Macro environmentin which the firm operates

Five identifiable, though overlapping segments:

1.Politics and government 2.Macro economy 3.Technology 4.Socio demography 5.Ecology

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Historical Context
The Industrial Revolution to World War II
Rules of businesses were being developed Devotion of most energy towards creation

of new production technology


Inventions and new technologies were

continually creating, changing and improving products and processes

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Beginning of twentieth century


Age of mass production Minimal government intervention Environment for business had stabilized Business emphasized production efficiency

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The Postwar Era


Following World War II business entered the

mass-marketing era transportation

Radical changes in communication and Affluent customers stagnated with

standardized products
Consumer Behaviour was discovered Environment for business was changing,

but at slow pace

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The Postindustrial age


Oil producing nations of Middle East had all

the economic preconditions for cartel behavior markets and technology Information focus cumulative
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Radical Changes in macro environment, Shift from Product/market focus to Problems were not sequential but rather

Trends in Predicting the future


Characterist 1900 ics Familiarity of events Familiar 1930 Extrapolatio n of experience 1950 1970 1990 Discontinuo Discontinuo us but us and novel related to experience Comparable to firms response Forecast able by extrapolatio n Shorter than firms response Predictable Partially threats and predictable opportunitie weak s signals Unpredictab le surprises

Rapidity of Slower than Change firms response Visibility of Recurring future

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Evolution of Entrepreneurial Strategies


1900 1930 1950-70 1990 2000 Product Rounding Diversific Forward Resource rationaliz of ation/ Integratio invulnera ation product Multinatio n bility Backward line Life cycle Recycling nal Integratio Technolo expansio balance Surprise World n gical n prepared National evolution Technolo expansio ness expansio Annual gy n n Model substituti change on

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Population Ecological Model


Organizational birth, death and mechanism

involved

Resemblance of organization with ecology-

survival for fittest-equilibrium


Change in macroenvironment changes the

business ecology-new ventures are created to deal with the change


Explains the long run processes at work but

not covering the strategies entrepreneurs should use


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Entrepreneurial Choice Model


Analyze elements of choice Stages in models application-isolate the

effects of various parts of macro environment on a hypothetical business plan for a new venture government-Interaction of all variables

Demography-technology-politics and

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