In: Economics
Macro Environment
A macro environment is the condition that exists in the economy as a whole, rather than in a particular sector or region. In general, the macro environment includes trends in the gross domestic product (GDP), inflation, employment, spending, and monetary and fiscal policy. The macro-environment is closely linked to the general business cycle as opposed to the performance of an individual business sector.
The macro-environment can be affected by GDP, fiscal policy, monetary policy, inflation, employment rates, and consumer spending
In simple words, macro-environment refers to how the macroeconomic conditions in which a company or sector operates influences its performance. Macroeconomics deals with aggregate production, spending, and the price level in an economy as opposed to individual industries and markets.
The Macro Environment consists of 6 different forces. These are: Demographic, Economic, Political, Ecological, Socio-Cultural, and Technological forces. This can easily be remembered: the DESTEP model, also called DEPEST model, helps to consider the different factors of the Macro Environment.
Economic Factors
Economic factors affecting the macro environment relate to forces that affect how consumers spend and their purchasing power. It is important to understand a variety of metrics and data, including:
Every business should closely examine the above data regularly and be fully aware of such numbers before moving into new markets in different countries.
Socio-Cultural Factors
Socio-cultural factors relate to demographics in a sense but are more related to populations and how they behave based on preference and values. Different societies and cultural groups are characterized by different needs, which are often based on different core values and preferences.
Cultures are often shaped by a sort of group mentality, which passes along core values and general beliefs. It shapes how the individuals in such cultures shop and what they choose to spend their money on. A business needs to pay attention to socio-cultural variances, especially when moving into new markets.
There is a wide variety of social and cultural factors, some of them being:
WRAP UP
The final step of the macro environmental analysis is to summarize the identified opportunities and threats and determine if you should expect growth, stability or decline in the size of your industry. (SWOT ANALYSIS)
Macro environments have a significant impact on the success of marketing activities, and therefore such environmental factors must be considered in-depth during the process of creating a strategic marketing plan. Considering these factors will improve the product (CREATINE REDBULL) success of your organisation’s marketing campaign and the reputation of the brand in the long term.
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