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Group Reporting - 3

Political, technological, legal, economic, social, environmental, and demographic factors make up the macro environment influencing business operations and strategies. Regulations, trade policies, political stability, disruptive technologies, compliance, economic indicators, social trends, sustainability, and population characteristics all impact businesses. The micro environment comprises competitors, suppliers, customers, intermediaries, shareholders, employees, and media channels that directly interact with and affect a company within its specific industry.

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8 views14 pages

Group Reporting - 3

Political, technological, legal, economic, social, environmental, and demographic factors make up the macro environment influencing business operations and strategies. Regulations, trade policies, political stability, disruptive technologies, compliance, economic indicators, social trends, sustainability, and population characteristics all impact businesses. The micro environment comprises competitors, suppliers, customers, intermediaries, shareholders, employees, and media channels that directly interact with and affect a company within its specific industry.

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reynmaries
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PHILOSOPHY OF

BUSINESS
POLITICAL

ENVIRONMENTAL TECHNOLOGICAL

Business
in terms
SOCIAL
of LEGAL

ECONOMICAL
POLITICAL

Political factors encompass government actions, policies, and stability that


can affect businesses:
Regulations and Laws: Government regulations can shape how businesses
operate, affecting areas like product safety, labor practices, and
intellectual property rights.
Trade Policies: International trade agreements, tariffs, and restrictions can
impact a business's ability to access global markets and compete
internationally.
Political Stability: Political instability can lead to uncertainty, affecting
investments, supply chains, and market demand.

TECHNOLOGICAL

Technological factors refer to innovations and advancements that influence


business operations:
Automation and Efficiency: Technological advancements can streamline
operations, reduce costs, and improve efficiency.
Digital Transformation: The shift towards digital platforms and e-commerce
affects how businesses market, sell, and interact with customers.
Disruption and Innovation: Emerging technologies can disrupt traditional
industries and create new opportunities for innovation and growth.
LEGAL

Legal factors involve laws and regulations that govern business activities:
Compliance: Businesses must adhere to various legal requirements, such as
employment laws, data protection, and industry-specific regulations.
Contracts and Agreements: Legal agreements, partnerships, and contracts
define business relationships and obligations.
Intellectual Property: Protecting trademarks, copyrights, and patents is
crucial for safeguarding a business's innovations and assets.

ECONOMIC

Economic factors relate to the overall health and performance of the economy:
Economic Growth: A growing economy can lead to increased consumer
spending and business investment.
Consumer Confidence: Consumer sentiment and confidence in the economy
influence buying behavior and demand for goods and services.
Inflation and Interest Rates: Economic indicators like inflation rates and
interest rates can impact costs, pricing, and borrowing.
SOCIAL

Social factors encompass cultural, demographic, and societal trends:


Demographics: Understanding population characteristics, such as age, income, and lifestyles,
helps businesses tailor products and marketing.
Social Values: Changes in societal values and attitudes can influence consumer preferences
and demand for socially responsible products.
Consumer Behavior: Social trends and preferences shape how consumers make purchasing
decisions and engage with brands.

ENVIRONMENTAL

Environmental factors pertain to sustainability, environmental impact, and ecological


considerations:
Sustainability Practices: Businesses are expected to adopt eco-friendly practices, reduce
waste, and consider environmental impact.
Regulations and Activism: Environmental regulations and consumer activism drive businesses
to adopt environmentally responsible practices.
Resource Management: Businesses must manage resources efficiently to minimize
environmental footprint and ensure long-term sustainability.
MACRO-ENVIRONMENT vs.
MICRO-ENVIRONMENT
Macro-environment in business
refers to the broader external factors
and forces that influence an
organization's operations, strategies,
and decision-making.
ELEMENTS OF
MACROENVIRONMENT

POLITICAL - LEGAL SOCIO-CULTURAL


ECONOMIC ENVIRONMENT
ENVIRONMENT ENVIRONMENT
Refers to government It involves factors like It include societal
policies, regulations, and inflation, economic growth, values, attitudes, and
stability that can impact
and exchange rates. cultural trends.
operations.

TECHNOLOGICAL DEMOGRAPHIC
GLOBAL ENVIRONMENT
ENVIRONMENT ENVIRONMENT
Relates to advancements Covers the type, size and Refers to the external factors and
and innovations. growth rate of population in the area conditions that can impact a
in which the business operates. company's operations, strategies, and
performance on a global scale.
THE COMPANY’S MACRO ENVIRONMENT
What is Micro
Environmental?

Microenvironment in a business context refers


to the close and immediate factors that impact
an organization's operations, strategies, and
interactions within its specific industry.
7 Elements of Micro
Environment
Key Components of Micro-
Environment

Competitors ➖ Analyzing competitors helps a business identify its


strengths and weaknesses, anticipate competitive
moves, and differentiate its offerings.

Suppliers ➖ Relationships with suppliers influence the availability,


cost, and quality of inputs necessary for a company's
operations.

Customers ➖ Understanding customer needs, preferences, and


behaviors is essential for tailoring products, services, and
marketing strategies to meet their demands.
Intermediares ➖ Refer to entities that facilitate transactions between
a company and its customers, like distributors or
wholesalers.

Shareholders ➖ The real owners of the business who invest their funds
in the operations of the company by purchasing
shares, and in exchange for which they are given a
dividend payment each year.
Employees ➖ Individuals who are hired by the company to perform
various tasks, roles, and responsibilities in exchange

➖
for compensation.

Media Refers to the various communication channels and


platforms that companies use to convey information,
promote products or services, engage with customers,
and build their brand presence.
Created by:
REYN MARIE T. SANCHO
FINANCIAL MANAGEMENT - BLOCK A

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