Dendro Macroeconomic Factors

There are a number of macroeconomic factors that will affect Dendros, but the most important one is the overall health of the local economy. The GDP is the most oft-cited measure of broad macroeconomic health. For some in the Dendros target market, arbor services are discretionary, meaning that purchases will either be cancelled or delayed in response to downturns in the economy. The Congressional Budget Office bases its projections on the policies that are currently in place. This means that its forecast for 0.5% decline in GDP over the year from Q4 2012 to Q4 2013 has built in the provisions of the so-called "fiscal cliff." It is expected that between the present moment and January 1, 2013, new laws and policies will be enacted to replace this scenario, so the actual forecast for GDP growth is more likely to be slow growth in the range of 1.7% (CBO, 2012). The California state budget has built in a forecast of 2.5% increase in GDP, above the national average, assuming that key elements of the Budget Control Act are ultimately not enacted.

Interest rates also could affect Dendros, depending on the company's debt structure. If the debt is floating, there is the risk that if inflation and interest rates move upwards, the cost of the company's debt would also increase. However, prospects for a slow increase, or even small decrease, in the GDP reflect an environment where there would be little need to increase interest rates. Therefore, neither inflation nor interest rates are expected to be a significant risk to Dendros in 2013.

Non-Economic Factors

The social and cultural environment is generally positive. Consumers tend to appreciate arbor services, and when these services are conducted in an environmentally-friendly manner there are...

The political environment will often follow the lead of the social environment in creating regulations. In general, licensed practitioners have little to worry about as they have a high level of familiarity with respect to the regulations governing the industry. Dendros will need to be aware, in particular, of legal guidelines with respect to the use of pesticides, as these guidelines can vary by city or county. In addition, Dendros must ensure that it complies with all of the legal guidelines surrounding the hiring and treatment of workers. These guidelines range from the patchwork of anti-discrimination laws to laws governing the use of illegal workers, of which there are many in San Diego County.
The technological environment is characterized by a moderate pace of change. The basic technology in the arborist trade changes at a slow pace, and with years of experience Bill and Sue are well familiar with the latest technologies. Marketing, however, is affected by a rapid pace of technological change. Marketing via social media is an emerging, rapidly-changing area, for example. The company must also consider the possibilities of technology with respect to taking orders, organizing workflow of its employees and managing finance and inventory. With a rapid pace of change and the two principles spending ample time in the field, there is the risk that they will be unable to keep pace.

San Diego has a growing population, so demographic changes can be seen as favorable to Dendros. The couple will expand their potential market if they have a good knowledge of Spanish, however, as the area has a large Spanish-speaking population. In addition, San Diego has a somewhat transient Navy population, and this transience creates opportunities for one-off residential customers. However,…