One method used to analyze trends in the macro environment is the PEST (political, economic, social, technological) analysis. Some variations of the PEST analysis method add additional categories for the legal and ecological environments, and may be referred to by other acronyms such as STEEP or PESTEL.
Bounsoussan and Fleisher (2012) recommend the following process: begin by defining the environmental boundaries in terms of: breadth (topical coverage), depth (level of detail), and forecasting horizon (short, medium, or long timeframe) based on the organization's current strategic plan, geographic reach, and product or service scope.
The following sources provide additional information on environmental scanning and a variety of analytical tools including the PEST Analysis technique.
Here are a few key intelligence sources that provide information regarding multiple aspects of the macro environment in Canada and many other countries.
Key factors or variables associated with the political environment often include:
nature and type of government
political views of governing parties
voting rates and trends
lobbying efforts by interest groups
public opinion
In addition to the general sources listed previously, you may need to consult additional or more domain-specific sources (listed below) to gather data on current events and trends.
The economic environment includes factors related to the health of the economy such as fiscal or monetary policy, GDP growth rates, exchange rates, interest rates, inflation, employment rates, spending patterns, and other indicators. Most Canadian economic data is available at the national or provincial level. Some economic data may be available for smaller levels of geography such as municipalities.
An analysis of the social environment at the general or macroenvironmental level will examine factors related to characteristics of a country's population. In some cases, you may be able to locate data on smaller geographic areas. These social factors may include information on:
An analysis of the technological environment may involve gathering information on patent activity, research & development budgets, the pace of technological change, and telecommunications infrastructure (such as bandwidth capacity).
According to Fleisher and Bensoussan, "The analytical task is to identify monitor the effects of technological change as it affects competitive strategy...not only in the final goods market, but also in new product and process innovation, and even communication, human resource attraction, and marketing methods" (2007, p.90).
Source: Fleisher, C.S. & Bensoussan, B.E.(2007). Business and competitive analysis: Effective application of new and classic methods. Upper Saddle River, NY: FT Press.
Many organizations monitor the technological environment on a regular basis including think tanks, consulting firms, stock market analysts, trade and industry associations. Journalist and news organizations who cover technology issues will also be good sources of information on recent events, trends, and forecasts.
As it would not be possible to list all such sources, the guide will point to a few examples.
The ecological environment includes variables such as climate, sustainable development and recycling capacity as well as pollution (air and water quality), energy sources, etc.
Many organizations monitor the ecological environment on a regular basis including think tanks, watchdog groups, and news organizations. As it would not be possible to list all such sources, the guide will point to a few examples.
The legal environment includes laws, regulations, and public policy (at all levels of government) that may affect an organization's ability to act. . Key factors or variables associated with this category often include:
In addition to the general sources listed previously, you may need to consult additional or more domain-specific sources (listed below) to gather data on current events and trends in the legal environment. Many large Canadian law firms (such as Blakes) monitor legal developments, generally, or within specific specialties (e.g. environmental law).