Impact of Macro Environment on Business: An In-depth Analysis

This report provides a comprehensive analysis of the macro environment and its impact on business organizations. It begins by introducing the importance of business performance and the different types of organizations. The report then delves into the impacts of macro environmental factors, including political, economic, social, technological, legal, and environmental factors, on business growth. For each factor, it discusses both positive and negative impacts, with specific examples. The analysis covers how these factors influence business strategies, customer behavior, and overall stability in the market. The report concludes by summarizing the key findings and emphasizing the significance of understanding these factors for business success. Desklib offers more resources like this to aid students.

BUSINESS
ENVIRONMNET

Introduction
Performance of the business plays very important role to compete
in the market. It helps to business organisation to maintain its
stability in the market. There are different types of organizations
which runs to earn profit maximization. In this present files it
explains the types and scope of organization like there are three
types of organization private, public. And voluntary organisation

Impacts of macro environment
Macro environment factors are impact
on the entire business. Macro factors are
the external factors includes political,
economical, social, technological,
environmental. These all factors
influenced the working of the business.
Company has to control on these factors
to minimize the future risk. Macro
environment either give positive or
negative impacts too.

Political factors
Political factors impacts on business growth in great extent.
Political factors are the external factors controlled by
government. These factors may affects from increase or decrease
the tax rates(Steurer, 2013). These political factors is predictable
because of the changes in political parties. Political factors
includes the population ratio, demographic factors. These all
factors affect the company negatively or positively.

Positive impacts
• It helps to minimize the future risk.
• Political factors helps to decide the product expansion strategies.
• It aids to improvise in business ethics.
• It mange the working environment by giving quality services to
the customers.
• Government also helps to develop new industries in the market.

Negative impacts
• It may decrease the purchasing power of the customers.
• Due to high interest rates customers are not able to
purchase costly services.
• It gives low productivity in the organisation.
• It decreases the business expansion scope.

Economical factor
Due to changes in inflation rates, interest rates impact on negatively or
positively on the businesses. Due to increasing the inflation rates
apparently business have to increase the prices of product and services.
Through this situation customer are not getting interest in heavy prices
of product. It decreases the sales of the company Mark & Spencer.
Economic factors are influenced by external factors.

Positive factors
• Economic factors helps to make new strategies.
• Low inflation rates help to increment the demand of the products.
• Devalued interest rates helps to increase the commodity expansion.
• Stable economic condition helps to identify the customer needs and
wants.
• In smooth market condition helps business to take new marketing
strategies to attract the customers.

Negative impacts
• It may desecrate the purchasing power of the customer.
• It decreases the sales revenue of the company.
• Diminish the future growth.
• It creates crisis in the business.

Social Factors
Social factors are those factors who influenced by the customers.
It is the another macro factor which impacts business
organization(Carrió-Pastor, and Calderón, 2015.). It involves
customer age, income, culture, religion. Social factors affect the
demand and supply of the product. It may increase or decrease
the sales of the business due to unemployment customer cannot
afford high cost services.

Positive factors
• Stable economy increase sales of the products.
• Increasing the purchasing power.
• It helps organisation to take new product expansion.
• Analyse the needs and wants of the customers.

Negative factors
• Due unemployment decrease the sales revenue of the
product.
• Decrease the profit revenue of the company.
• Diminish the business future stability in the market.
• Negative impacts on business plans.