Stability and Growth in Industrial Economies
Industry: An industry or sector is the manufacturing of a good or service within a category. The word 'industry' comes from the Latin 'ndustrius' meaning "diligent, industrious".

There are three key sectors of industry:
the primary sector, largely raw material extraction industries such as mining and farming;
the secondary sector, involving refining and manufacturing;
and
the tertiary sector, which deals with services (banking, transportation etc) and distribution of manufactured goods.
Both Internal and External Environmental Factors affect the Stability and Growth of an Industry of a particular firm
1 . Internal Environmental Factors, these involve [5M]
• Management
• Manpower
• machine
• material and
• money.
2 . External Environmental Factors:
External Environmental Factors are sub-divided into Micro (Operating) and Macro (General) Environmental Factors.

Micro Environmental Factors:

1.Suppliers - the quality of Raw material and inputs supplied plays vital role with the amount of consistency they are supplied.

2. Customer - the bargaining power of customer in the form of Quantity demanded and level of income plays a vital role.

3. Market Intermediaries (wholesalers, Retailors)– the profit margin of wholesaler & retailor with their capacity of occupied marker share

Macro Environmental Factors:
P = Political Factors
E = Economic Factors
S = Social Factors
T = Technological Factors
E = Environmental Factors
L = Legal Factors

• Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation.
• Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy
• Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).
• Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.
• Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.
• Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.
By using the PESTEL framework we can analyze the many different factors in a firm's macro environment.
However, it is important not to just list PESTEL factors because this does not in itself tell about situation very much. What we need to do is to think about which factors are most likely to change and which ones will have the greatest impact on them i.e. each firm must identify the key factors in their own environment so they can maintain certain level of growth and stability essential for their profitability and survival.