DEMOGRAPHIC, TECHNOLOGICAL

AND NATURAL ENVIRONMENT.

International Business II

Luis Pachn

DEMOGRAPHIC ENVIRONMENT
Demography: Is the study of human
populations in terms of size, density, location,
age, gender, race occupation, and other
statistics.
Demography is very important because it
involves people, and people make up
markets.
The world population is growing at an
explosive rate. This population explosion has
been of major concern to governments and
various groups. Luis Pachn

DEMOGRAPHIC ENVIRONMENT
The less-developed regions of the
world currently account for 76% of the
world population.
The explosive world population growth
has major implications for business
due to:
Growing human needs to satisfy.
Growing market opportunities.

It is good to keep close track of

demographic trends and
developments in their markets, both
at home and abroad.

DEMOGRAPHIC ENVIRONMENT
Relevant variables:

Changes in age structure.

Changes in family structure.
Geographic population shifts
Migration.
Educational characteristics.
Population diversity.

Baby Boom: A major increase in the

annual birth rates. It started after
world war II and lasted until 1960s.
This segment of the market represents
an opportunity.
Luis Pachn

DEMOGRAPHIC ENVIRONMENT
By the mid-1970s the birth-rate had fallen
sharply due to the smaller family sizes
resulting from the desire to improve the
personal living standards, from the increasing
desire of women to work outside home and
from improved birth control.
The already mentioned facts had generated
changes in the family structure and the
market.
For the twenty-first century a decline of the
birth-rates is expected.
Luis Pachn

DEMOGRAPHIC ENVIRONMENT
Nowadays people tend to marry less and
have less children.
Changes in the value system and roles
assumed by the members of the family have
great impact.
The percentage of people living alone has
increased considerably in the past years.
The population shifts have been from rural to
urban areas.
Luis Pachn

DEMOGRAPHIC ENVIRONMENT
Another population shift has occurred from
less developed countries to industrialized
countries.
Movements from the cities to the suburbs.
In general terms the concern for education
has increased so the education itself has
improved.
Racial and ethnic diversity play a really
important role.
Luis Pachn

TECHNOLOGICAL ENVIRONMENT
Forces that create new
technologies, creating new
product and market
opportunities.
Technology has released
wonders and horrors.
The following technological
trends must be taken into
consideration:
Fast pace of technological
change.
Research & Development.
Luis Pachn
Concentration on minor

TECHNOLOGICAL ENVIRONMENT
Scientist today are working on a wide range
of new technologies that will revolutionize
products and their manufacturing processes.
Biotechnology, miniature electronics, robotics,
and materials science.
Investment on Research & Development is
higher every time governments and private
companies.
Many companies are making minor product
improvements instead of gambling on major
innovations.
Luis Pachn

NATURAL ENVIRONMENT
Involves natural resources
that are needed as inputs or
that are affected by
production activities.
Environmental concerns
have grown steadily during
the past two decades.
Many companies have
assumed a responsible
behaviour towards the
natural environment
because consumers are
demanding it.
Luis Pachn

90s Earth Decade.

NATURAL ENVIRONMENT
The pollution levels are a major concern as
well as the damage caused to the ozone
layer, the extinction of the species and the
renewal of resources.
Aspects take into account:

Shortages of raw materials.

Increased cost of energy.
Increased pollution.
Government intervention in natural resource
management.
Luis Pachn

NATURAL ENVIRONMENT
Water scarcity is a problem for many
countries.
Renewable resources, such as forests and
food, have to be used wisely Reforestation.
More of the worlds limited farmable land is
being developed for urban areas.
Non-renewable resources, such as oil, coal
and various minerals, pose a serious problem.
Luis Pachn

NATURAL ENVIRONMENT
The price of the renewable resources is higher
every day.
The search for other sources of energy is a
priority nowadays.
Contamination is being battled.
Recycling, the adequate disposal of waste,
among others is not only a responsibility of
companies but it represents an opportunity.

Luis Pachn