Question

Explain what macro industry is and why it is important to acknowledge.

Answer 1

Macro industries are those industries whose decisions are made focusing on the issues that arise outside the industries which reflect the economy as a whole eliminating the analysis of actions and decisions made by managers or management structure and product management. Exterior problems which are associated with the industry's overall businesses are analysed in the macro level.

Exterior forces and influences that affect the entire economy of a industry are analysed and discussed in macro environment. It is very important to understand and acknowledge the macro level forces associated with an industry in order to safe business from its downfall. It is very important for a business to understand the trend of customers' buying preferences of a particular product, their budgets and frequency of buying that product in order to increase their sales. In order to exist in the market in the long run, time to time analysis of economic factors inflation rate, taxes, unemployment rate, recession and market failure etc are very necessary in the macro level. Besides in order to build a industry, it is very important to understand the political forces which also influence on the longevity of an industry. Government's relation with neighbouring and foreign countries determine the possibility of carrying out trade with them by an industry. When the relation is good with foreign countries, an industry gets more benefits due to lower tariff rates for the import of raw materials and export of their end products in the foreign. But if the relation goes bitter, an industry faces lots of losses due to lots of trade barriers. Besides tax policies, legislative laws, health and safety laws incorporated by government also affect the stability of an industry. Social factors like demographic location, social status, standard of living, culture, ethnic background etc also influence on the economy of an industry which also needs to be acknowledged in the macro level.