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Micro vs Macro Environment in Business

Sep 2, 2024

Academic Game Tutorials: Differences Between Micro and Macro Environment

Introduction

  • Overview of the business environment
  • Two main categories: Micro Environment and Macro Environment

Definitions

  • Micro Environment:

    • Directly interacts with the business organization.
    • Affects routine activities of the business immediately.

  • Macro Environment:

    • General environment within the economy.
    • Influences overall performance, decision-making, and strategy of all business groups.

Key Differences Between Micro and Macro Environment

DifferencesMicro EnvironmentMacro Environment
1. Contact with FirmImmediate contact with the firmNot specific to any particular firm
2. Analysis MethodCosmic Analysis (Competitors, Organization, Suppliers, Market Intermediaries, Customers)Vessel Analysis (Political, Economic, Socio-Cultural, Technological, Legal, Environmental)
3. Nature of ElementsVery specific elementsGeneral elements
4. ControlFactors are controllable by the business to some extentVariables are uncontrollable
5. Impact on FirmDirect and regular effects on the firmIndirect effects on the firm

Conclusion

  • Understanding these differences is crucial for strategic planning and decision-making in any business.

Full transcript