Skip to content

What is a company’s macro environment?

February 1, 2020
What is a company's macro environment

There are many external variables that can interfere with the operation of the company, either for better or for worse. These factors do not depend on commercial activity, but on external factors that not only affect companies, but also the population as a whole. They are known as the microenvironment of the company, to encompass all of them. In this article, we will explain that it is the macro environment of a company.

Microenvironment Definition

The microenvironment of a company is the term used to encompass all those external variables that affect business activity. These variables generally not only affect the company, but also the whole of society and its activities, and include matters related to the population, legal or technological issues.

It is essential to perform a good analysis of the macro environment of a company, since knowing in which situation we develop our activity we can protect ourselves from those issues that may be harmful to us, and take advantage of those situations that allow us to increase sales.

Macro environment dimensions

Traditionally the business microenvironment has been divided into 7 dimensions to study and value, which would be the following:

  • Demography: population structure, age, migratory movements, birth rates, and mortality.
  • Economic: income, current GDP evolution, inflation, government monetary and fiscal policy, unemployment, interest rate, exchange rate.
  • Cultural and social: lifestyles, social groups, social concerns, changes in social values ​​, or drug use, among others.
  • Legal: barriers to entry and exit to a market, jurisprudence, or regulation of specific issues.
  • Politics: division into provinces / autonomic, lobbies, political system, groups with great power in the country.
  • Environment: level of degradation, social concerns, protected areas, protective legislation.
  • Technological: infrastructures, patents, and innovations, R&D, or productivity of industries.