1. Explain how the trends in the political segment affect the operation of a business.

The Political or Legal Segment The political system, tax laws, government programs and priorities, and other variables under the political or legal segment directly affect a business or the industry where it operates. For example, Executive Order No. 28, series of 2017, which banned the use of fireworks in households or places of residence nationwide, adversely affected businesses producing firecrackers. Similarly, Executive Order No. 26, series of 2017, which banned smoking in public places nationwide, has reduced the consumption of cigars and cigarettes which negatively affected tobacco companies. However, the Build, Build, Build Program of the Duterte administration favorably contributed to the growth of businesses manufacturing construction materials. These recent developments are clear manifestations that strategic managers must constantly take proactive steps in monitoring government directions and priorities so that their strategies fit accordingly to the demand of the existing political landscape.The Other Segments The other segments, which are of equal importance and must also be critically considered when conducting a societal environment analysis, are the demographic and global segments. The changes Scanned with CamScanner 24 Unit 1 / Environmental Analysis in the demographic segment are often caused by changes in the other segments. In a similar manner developments in the global market have contributed to the restructuring of the operations of businesses from domestic to international. Demographic segment. This segment refers to the observable characteristics of a population including age distribution, sex, race, ethnicity, religion, and income. Businesses must design and offer their products appropriately to fit the demographic profile of their expected market. Businesses that disregard the influence of the demographic segment do not endure or last in a competitive environment For example, a restaurant that offers a high-priced menu in a low-income population will suffer losses in its operations. The same thing will happen to a business that sells a product made of pork to a population whose predominant religion considers it as taboo. Global segment. Nowadays, businesses are operating across geographic borders, and almost all products are present worldwide. The variables included in this segment are the global trade liberalization, trade agreements among regional blocks (e.g., NAFTA, APEC, and ASEAN), and emerging economies like those of China and India. Even Philippine tertiary school curriculums and course offerings have to be designed in a way that the graduates will fit the demands of the ASEAN integration and global labor market. In the past few years, schools and colleges that concentrated mainly on nursing courses have suffered tremendously when the demand for nurses worldwide has decreased The adoption of the K-12 educational system in the Philippines is the result of the changes and demands of the global segment.CONDUCTING A SOCIETAL ENVIRONMENT ANALYSIS The commonly used strategic management tool to conduct a societal environment analysis is the STEEP or PESTEL analysis. STEEP stands for sociocultural, technological, economic, environmental, and political forces. On the other hand, PESTEL stands for political, economic, sociocultural, technological, environmental, and legal forces. This tool is intended to determine the trends happening in the industry to which a company belongs. The mechanics on how to use the STEEP or PESTEL analysis are discussed in Chapter 6. To conduct a societal environment analysis, the following steps should be performed: 1. List down the most important elements or variables that are applicable to the company under each environmental force. The number of variables varies from company to company and from industry to industry. 2. Evaluate the current trend of the listed elements, either locally or globally, by gathering historical data. Make sure that all information comes from reliable sources. 3. Project the possible future trend of the variables using the historical trend as the basis A quantitative or qualitative approach or both may be adopted when making projected trends. 4. Adjust the projected trend based on the possible effects of other environmental forces. 5. Quantify the possible effects on the company. 6. Draw strategic actions to minimize the effects of the identified environmental forces