Economics and Macro Environment Essay
A macro environment comprises the external factors that can influence a business. These factors are often out of the control or management ability of a company. Factors typically include economic, demographic, political, and technological forces in business. Business owners and managers often spend copious amount of time and effort to assess the overall economic environment in order to determine the number and strength of each factor.
Strategies and performance reviews can help owners and managers use the macro environment factors to create a competitive advantage or their respective companies. General economic factors in the macro environment can include supply and demand, number of competitors in the market, availability of economic resources, and efficient production methods employed by companies. Each of these factors impact a company’s production output and potential profit margins when selling goods and services to consumers.
Free market economies often have more competition because more individuals and businesses can avail themselves to the raw materials, labor, ND facilities in the market. Demographics relates to information about the consumers in an economic market. This information includes statistics on consumer age, sex, race, religion, education, household size, marital status, and other similar information. Companies use this information to create products and marketing
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This information also plays a role into general economic factors. Companies must be able to determine consumer supply and emend by measuring consumer income and the desire to spend money on various goods and services. Ads by Google Forrester Marketing Paper Get This IBM White Paper & Connect The Dots For Your Digital Marketing Economics and Macro Environment By slammed Business Asset Finance Get DIB Finance up to DEAD 10 Ml. Fast turnaround time. Dib. Ay/business-asset-finance Project Management Degree Develop a career w/ AMP, PM course Improve your skills.
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Companies often make business decisions based on the tax liability or government involvement in a business industry r sector. Creating business divisions or departments in these areas can decrease a company’s profits and subject it to more compliance laws and regulations, which often increases operating costs. Technological changes in the last few decades have transformed the way companies do business in the macro environment. Websites, Internet-based software, and fulfillment centers allow companies to sell goods and services in national and international economic markets.
Companies can also improve production output and rower costs through technological additions to their company. Companies who implement business technology can force competitors in the marketplace to adjust their practices to meet new product improvements. Developing an in-house custom software package or application can also shift the macro environment if other companies cannot replicate this technology. Related Links Environment Leadership Business to Business Competition Pricing Training Materials Soft skills training materials to teach soft skills training courses.