The macro and micro business environment

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12th Jun 2020 Business Question Reference this

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Question

What is the difference between the macro and micro business environment?

Answer

The macro environment refers to the wide general environment of a country, region or the entire world which affects all business, whereas the micro environment is narrower and is the specific environment that an individual business operates in. On one hand, the macro environment consists of things such as political factors such as political stability, economic factors such as interest rates and GDP, cultural factors such as trends in society, the legal environment such as laws and regulations and the environment in general such as pollution levels. On the other hand, the micro environment consists of factors such as how many suppliers there are, how many customers there are, and how many competitors there are. This allows for an assessment of the intensity of competition in a particular industry. One of the key differences between the two environments is that the macro environment factors are beyond the control of a business, but the micro factors can be controlled by a business. Another key difference is that macro factors will have an indirect and distant impact on a business, whereas micro factors will have a direct and regular influence on a business.

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