Question

what is analysis of the Macro environemnt? And

analysis of the micro environment

And how does that two analyzes work for the company or the industry?

Answer 1

Sol:

Analysis of Macro environment

Macro environment is Political, Economic, Social and Technological analysis. Many factors in the macro environment that affect the decision making of organization in this whole world. Changes in tax ,trade barrier, laws, demographic change and government policy.

Politics - Government policy, fundings, initiatives and grant. Political decisions impact on many important areas of business such as education of the workforce, the health of the nation and quality of the infrastructure such as the road system.

Economy - Inflation, deflation, interest rate, labour and energy cost. Economic factors includes economic growth, interest rate, tax changes, inflation and exchange rate.  High national income growth increase the demand for the comany's products.

Social - Population, education, media and culture. Changes in social trends is also impact the demand for company’s products.

Technological - Information & communication Emerging technology. Technology create new product and new processes. Technology is useful for reduce cost and improve quality and lead to innovation. Technology development can benefit for customers as well as the industry which providing the product.

Analysis of Micro environment

Micro environment analysis is about decision making, strategy and performance

• Portfolio analysis
• Corporate strategy
• Financial performance
• Innovation audit
• Organisational culture

The micro environment not affect all companies in an industry in same way, because of size, capacity and strategies are different. e.g. raw material supplies are giving more concessions to large sized firm but they may not give the same quantity to small firm.  Sometimes micro environment of the various firm in industry is almost the same. Response of these firms to their micro environment may vary each firm will attempt to achieve high success.