To develop a successful business strategy, the management should not only carefully analyze internal resources and industry factors, but also have a great insight into the external macro-economic factors. And social factor is one of the most important aspects. According to a report from Vancouver Sun, the Northern Gateway project (an oil transmission project run by Enbridge) has encountered a strong resistance by six first nations. And the Nak’azdli , one of the six first nations, has swore that they will not let the pipeline enter their territory. It is not a surprise to see first nation’s opposition against this project. A great concern is that the oil spill will severely affect the fishing activity which is an important source of food and income for the community. In addition, the traditional territory has profound meaning for aboriginal groups. It is part of their culture, history and lifestyle. They don’t want it to be destroyed by those steel tubes. These social factors will pose some significant impacts on this oil transmission business that the management cannot ignore. First, it will directly affect the profit. To persuade the first nations to sign on the equity sharing agreement, Enbridge has to pay considerable amount of money to first nations for compensation, which actually increases the cost and reduce the profit. Another important thing to consider is that it may have long-term effects on the business. If the pipeline were built, as the environmental degradation become more and more serious, there would be more and more complaints about the project. This might influence the political factors that may have negative feedback on the business. For example, to eliminate the unrest among the first nations, the government will probably impose more tax on energy companies like Enbridge to compensate first nations.

Reference:

http://www.vancouversun.com/news/There+will+pipeline/10122968/story.html