case study of nokia micro and macro environment

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Ecommerce · Strategy · Consulting

PESTLE Analysis: The Macro-Environmental Analysis Explained

by Martin Heubel

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Unstable market conditions are one of the biggest threats to the success of any company. For decades, managers have used the PESTLE framework to assess the opportunities and risks of their organisation’s macro environment.

Events such as the Brexit referendum or the coronavirus pandemic have had a significant impact on the way companies operate. But even smaller changes such as the introduction of new laws or technologies can pose a significant threat and force companies to react quickly.

If political and macro-economic changes are not recognised by businesses and included in their strategic planning process , attentive competitors can easily take advantage of this shortcoming.

But worry not! Today, you’re going to learn how to analyse your businesses macro environment with the PESTLE framework.

This article will cover:

Political Factors

Economic factors, social factors, technological factors, legal factors, environmental factors.

• How to do a PESTLE Analysis (incl. Template)

What is PESTLE Analysis

The PESTLE analysis is a concept first mentioned by Harvard Business School professor Francis J. Aguilar. He introduced the framework back in 1964 in his book “ Scanning the Business Environment “.

Since then, the PESTLE analysis has become a popular strategic tool to assess the macro environment of organisations worldwide.

The framework categorises the six forces of p olitics, e conomics, s ocio-culture, t echnology, e nvironment and l aw.

The PESTLE framework begins with an analysis of the political landscape. That’s because the political stability of a country is probably the biggest priority for any commercial organization.

Unstable conditions or extreme changes in government direction pose a major threat to ongoing operations. They can also lead to a dependency on political goodwill, making it almost impossible to operate economically.

While this is less likely to be the case in democratic states, totalitarian states often have centrally controlled economic systems. These severely restrict any form of business activities or even make them impossible in the first place.

For example, in conflict regions where civil wars prevail, or political power changes are frequent, companies are better off building local distribution networks than setting up nationwide production facilities.

But also relatively stable political conditions can pose challenges:

Take the European Union as an example:

Different legislative, anti-trust, and tax guidelines apply in each country. German domestic and foreign policies will differ widely from the ones in France or Poland.

Organisations need to be aware of the political movements in countries they operate in to minimise the risk of becoming the target of government action.

Typical political factors of a PESTLE analysis, include:

• Government policies
• Political stability
• Foreign trade policies
• Tax policies
• Labour laws
• Trade restrictions

In addition to the political situation, economic aspects play an important role when assessing a company’s macro environment.

The factors to be considered are manifold:

Currency stability, wealth and income distribution, unemployment rates, economic growth rates, wage costs or inflation rates are only a small excerpt of what managers should consider when analysing macroeconomic factors.

These factors can have a direct impact on the growth and profitability of a company.

Before entering a market, decision-makers must ask themselves whether the market is economically attractive and suitable for the intended operation.

Typical economical factors of a PESTLE analysis, include:

• Economic growth
• Exchange rates
• Interest rates
• Inflation rates
• Disposable income
• Unemployment rates

Following on from the economic analysis of a market, the analysis of socio-cultural characteristics provides an insight into the existing values, norms, institutions, education levels and consumption patterns of a population.

Put simply, this information allows businesses to outline the structures and values of a society.

However, managers need to take extra care in this part of the PESTLE analysis:

That’s because they often fall victim to predefined stereotypes when analysing geographically-distant markets.

The socio-cultural factors should always be assessed by several stakeholders with different backgrounds to ensure an objective evaluation of a market.

Typical social factors of a PESTLE analysis, include:

• Population growth rate
• Age distribution
• Career attitudes
• Safety emphasis
• Health consciousness
• Lifestyle attitudes
• Cultural barriers

In today’s age, almost every company is dependent on modern technologies.

Whether it’s due to the use of digital sales channels or the precise manufacturing of products with modern production facilities.

The rise in technological complexities also increasingly influence strategic decisions in companies.

When assessing environmental factors with the PESTLE framework, decision-makers must consider the technological progress of their time.

Managers can do this by asking a set of questions, like:

• Does the technological progress and infrastructure of a region meet the requirements of the plans to build a new manufacturing plant?
• Do specific technological standards exist with the entry into a new market, which must be met to build an effective supply chain?
• Are there any emerging technologies posing a threat of substitution ?

Typical technological factors of a PESTLE analysis, include:

• Technology incentives
• Level of innovation
• R&D activity
• Technological change
• Technological awareness

The legal framework is a central component in the analysis of a company’s macro environment. Even though this area is ranked at the lower end of the PESTLE framework, it is the most important for many companies.

For example, organisations within the EU have to consider at least three legal systems :

• The legislation in the country of the headquarters or production,
• The respective legal system of the country or countries in which the products are sold.
• Additional laws from the European Union that facilitate (or limit) business activities.

These legal systems often deprive managers of the flexibility they seek.

Advertising bans for certain product categories or special requirements for product design must be considered and taken into account on a country by country basis.

The resulting challenges often affect the entire marketing mix and can be costly to solve.

Typical legal factors of a PESTLE analysis, include:

• Discrimination laws
• Antitrust laws
• Employment laws
• Consumer protection laws
• Copyright and patent laws
• Health and safety laws

Environmental factors not only assess the climatic and topographical conditions of a country. They also evaluate a country’s availability of resources.

This is important, as products in regions with extreme climatic conditions have to meet different requirements than in their country of origin.

A car in the desert of Dubai has to meet different criteria than in Germany. European carmakers had to adjust their production to ensure their cars would stop catching fire in the UAE, following multiple reports back in 2005.

Geographical distances also pose a challenge for the distribution of products.

Mountains, rivers or other geographical conditions can quickly become a hurdle for transporting raw materials or goods.

Managers must carefully consider whether the ecological-geographical conditions of a region match their organisation’s strategic ambitions.

Typical environmental factors of a PESTLE analysis, include:

• Environmental policies
• Climate change
• Pressure from NGO’s

How to do a PESTLE Analysis (Free PDF Template)

Conducting the PESTLE analysis can be overwhelming. But with my easy-to-use template, it becomes a lot more manageable!

Simply print out the below template and start researching your industry.

A couple of great places to start your research are:

• statista.com
• ec.europa.eu

Free PESTLE Template

Simply click on the image to get redirected to the high-res PDF.

Over the past decades, the PESTLE Analysis has proven to be an effective concept to assess an organisation’s macro environment.

Its simple setup allows managers to anticipate future business threats and to take action to avoid or minimise their impact by incorporating them into their organisation’s strategic decision-making.

As with any analysis, it reflects the moment and is based on the current knowledge of those carrying it out. That’s why it is recommended to conduct the PESTLE analysis regularly.

Need help analysing your macro-environment?

If you want to better understand the factors that affect your business, get in touch . I offer tailored advice to help you assess your macro environment.

Enjoyed this article? Here are more things you might like:

What is Business Strategy? – Increase your chances of success and understand what it takes to build an effective business strategy.

Porter’s Five Forces Analysis – A complete guide to Michael E. Porter’s 5 Forces Analysis to help you assess your competitive landscape.

The Product Life Cycle – A complete breakdown of the individual stages of the product life cycle to plan your next marketing moves.

Macro Environment Analysis vs. Microenvironment Analysis

What's the difference.

Macro environment analysis and microenvironment analysis are both essential components of a company's strategic planning process. Macro environment analysis focuses on external factors that are beyond the control of the organization, such as economic conditions, political stability, and technological advancements. On the other hand, microenvironment analysis examines the internal factors that directly impact the company, such as customers, suppliers, competitors, and stakeholders. While macro environment analysis provides a broader perspective on the overall business environment, microenvironment analysis allows companies to identify specific opportunities and threats within their industry. Both analyses are crucial for developing effective strategies and staying competitive in the market.

Further Detail

Introduction.

When it comes to analyzing the external factors that can impact a business, two key approaches are often used: Macro Environment Analysis and Microenvironment Analysis. Both of these methods are essential for understanding the external forces that can influence a company's operations and success. In this article, we will compare the attributes of Macro Environment Analysis and Microenvironment Analysis to highlight their differences and similarities.

Macro Environment Analysis

Macro Environment Analysis focuses on the broader external factors that can impact an organization. These factors are often beyond the control of the company and include economic, social, political, technological, environmental, and legal forces. By analyzing these macro-level factors, businesses can better understand the overall market conditions and trends that may affect their operations.

One key attribute of Macro Environment Analysis is its focus on the external environment as a whole. This approach allows businesses to gain a comprehensive understanding of the various forces at play in the market. Additionally, Macro Environment Analysis helps companies identify potential opportunities and threats that may arise from changes in the external environment.

Another important aspect of Macro Environment Analysis is its emphasis on long-term trends and developments. By looking at macro-level factors, businesses can anticipate future changes in the market and adjust their strategies accordingly. This proactive approach can help companies stay ahead of the competition and adapt to changing market conditions.

Overall, Macro Environment Analysis provides businesses with a broad perspective on the external forces that can impact their operations. By understanding these macro-level factors, companies can make informed decisions and develop strategies that are aligned with the overall market trends.

Microenvironment Analysis

Microenvironment Analysis, on the other hand, focuses on the specific external factors that directly impact a company's operations. These factors include customers, suppliers, competitors, and other stakeholders that have a direct influence on the business. By analyzing these micro-level factors, companies can better understand their immediate environment and make strategic decisions accordingly.

One key attribute of Microenvironment Analysis is its focus on the specific relationships and interactions that a company has with its stakeholders. By examining these micro-level factors, businesses can identify key opportunities for collaboration and partnership that can drive growth and success.

Another important aspect of Microenvironment Analysis is its emphasis on the immediate environment in which a company operates. By understanding the specific dynamics of their industry and market, businesses can tailor their strategies to meet the needs and expectations of their stakeholders.

Overall, Microenvironment Analysis provides businesses with a detailed understanding of the specific external factors that can impact their operations. By focusing on these micro-level factors, companies can develop targeted strategies that address the unique challenges and opportunities present in their immediate environment.

While Macro Environment Analysis and Microenvironment Analysis focus on different levels of external factors, they both play a crucial role in helping businesses understand and navigate the complexities of the market. Macro Environment Analysis provides a broad perspective on the overall market trends and forces, while Microenvironment Analysis offers a detailed understanding of the specific relationships and interactions that impact a company's operations.

• Macro Environment Analysis focuses on the broader external factors that can impact a company, while Microenvironment Analysis looks at the specific external factors that directly influence a company's operations.
• Macro Environment Analysis emphasizes long-term trends and developments in the market, while Microenvironment Analysis focuses on the immediate environment in which a company operates.
• Both Macro Environment Analysis and Microenvironment Analysis are essential for businesses to make informed decisions and develop strategies that are aligned with the external forces that can impact their operations.

In conclusion, both Macro Environment Analysis and Microenvironment Analysis are valuable tools for businesses to understand and respond to the external forces that can impact their operations. By utilizing both approaches, companies can gain a comprehensive understanding of the market dynamics and develop strategies that are tailored to meet the challenges and opportunities present in their external environment.

Comparisons may contain inaccurate information about people, places, or facts. Please report any issues.

Module 1: Introduction to Retailing

Microenvironment vs. macroenvironment, learning outcome.

• Differentiate between macroenvironment and microenvironment considerations in strategic planning

Business (or Strategic) management is the art, science, and craft of formulating, implementing and evaluating decisions that will enable an organization to achieve its long-term objectives. It is the process of specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.

Strategic planning  is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors and EPISTELS (Environment, Political, Informatic, Social, Technological, Economic, Legal and Spiritual)

Strategic planning is the formal consideration of an organization’s future course. All strategic planning deals with at least one of three key questions:

• “What do we do?”
• “For whom do we do it?”
• “How do we excel?”

In business strategic planning, the third question is better phrased “How can we beat or avoid competition?”.  [1] In many organizations, this is viewed as a process for determining where an organization is going over the next year or more—typically 3 to 5 years, although some extend their vision to 20 years. In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the “strategic plan”.

Strategic planning may also be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Therefore, strategic innovation and tinkering with the ‘strategic plan’ have to be a cornerstone strategy for an organization to survive the turbulent business climate.

Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives.

No discussion of strategic planning can ignore the micro and macro factors that are relevant in the success and possible failure of the retail business. The  business environment  is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful customer relationships. The three levels of the environment are. We will focus on micro and macro factors in this module:

• Micro (External) environment – small forces within the company that affect its ability to serve its customers.
• Internal environment – can be controlled, however, it can’t influence an external environment.
• Macro (external) environment – larger societal forces that affect the microenvironment.

Micro Environmental Factors

Micro environments in retail is anything in the immediate environment including suppliers, customers, competitors, and stakeholders.  Any government and other regulating body can be thought of as a stakeholder.  Typically the micro environment is local to the business and any business owner should be well aware of those factors affecting the retail business.

Macro Environmental Factors

Macro environments are often outside of the retailer’s control and are typically of a larger scale and are usually of an economic and industry viewpoint.

SWOT Analysis

In understanding micro and macro environments a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is commonly used in retail. Strengths and weaknesses are those internal factors impacting an organization while opportunities and threats are external factors that are outside of the organization’s control.  Look at these slides reporting on a  SWOT analysis of GAP Inc  then let’s walk through a SWOT analysis for the GAP below.

Some of the positive internal attributes are franchising opportunities and global brand recognition.  Strengths answer question such as:  What value do we bring to the customer?  What do we do well?  What is making a difference?  Some of the weaknesses include a dependence on outside vendors as well as long term debt.  They also have a dependence on an older consumer.  Weaknesses address questions such as:  What needs improving?  What isn’t working?  What do our customers dislike? In looking at those external opportunity factors affecting Gap that are positive you can see they have a market for plus size women’s apparel and they are growing the online business.  There is also an opportunity for growth in Asia.  Opportunities address the following questions:  What should be changed?  What should the company start or stop doing?  Finally, threats are those external factors that can’t be controlled but are still a consideration.  The Gap has strong competition, slow economic recovery, and increased labor costs.  Threats answer the following questions:  What are the threats to the business?  Are there any economic, political, or customer trends?  Are there any financial threats such as cost or debt?

In addition, PEST (Political, Economic, Social, and Technological) as well as Porter’s 5-Forces analysis is also used as a way to understand new competition, the threat of new competition, the bargaining power of suppliers and customers, and the level of competition.

Additional Resources

• A PEST to Infest your Analysis

practice questions

• (Bradford and Duncan, Simplified Strategic Planning.  Chandler House, 2000. page 1). ↵
• Business Strategy/Overview of Strategic Planning. Provided by : Wikibooks. Located at : https://en.wikibooks.org/wiki/Business_Strategy/Overview_of_Strategic_Planning . License : CC BY-SA: Attribution-ShareAlike
• SWOT Analysis. Authored by : Xhienne. Provided by : Wikimedia Modification by Lumen Learning. Located at : https://en.wikipedia.org/wiki/File:SWOT_en.svg . License : CC BY-SA: Attribution-ShareAlike
• PEST Analysis. Authored by : BronHiggs. Provided by : Wikimedia. Located at : https://commons.wikimedia.org/wiki/File:Pest-analysis.jpg . License : CC BY-SA: Attribution-ShareAlike
• Market Environment. Provided by : Wikipedia. Located at : https://en.wikipedia.org/wiki/Market_environment . License : CC BY-SA: Attribution-ShareAlike

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Community resilience evaluation and construction strategies in the perspective of public health emergencies: a case study of six communities in nanjing.

1. Introduction

2. literature review, 2.1. resilience theory, 2.2. resilience assessment, 3. materials and methods, 3.1. evaluation system, 3.2. weights, 4. samples and results, 4.1. study area.

• Suojin Village Community (I) is established in the 1980s, the community covers an area of 0.45 square kilometers and has a population of 12,000. It located in the central part of Xuanwu District, bordered by Xuanwu Lake Street to the east, Taipingmen and Houzaimen Street to the south, Xuanwu Lake and Xuanwumen Street to the west, and the Shanghai–Nanjing Railway and Hongshan Street to the north.
• Bancang Community (II) was established in the 1980s, covering an area of 0.28 square kilometers with a population of 6800. It is bordered by the Purple Mountain to the south, Jiangwangmiao Community to the east, Xuanwu Lake to the west, and is adjacent to Suojincun Street.
• Zixincheng Community (III) was established in the 1980s, covering an area of 0.35 square kilometers with a population of 6000. It is bordered by Purple Mountain to the east, Xuanwu Lake to the west, Baima Park and Bei’anmen Street to the south, and Ningxi Road to the north.
• Jiangwangmiao Community (IV) was established in the 1990s, covering an area of 0.32 square kilometers with a population of 6000. It is bordered by Ningxi Road to the south, National Highway 312 to the west, and Huaxin West Road to the north.
• Huayuan Road Community (V) was established in the 1990s, covering an area of 0.47 square kilometers with a population of 13,700. Garden Road runs through the community, which is bordered by Huaxin West Road to the east, Nanjing Forestry University to the west, Garden Road Neighborhoods 5 and 8 to the south, and Xuanwu Avenue to the north.
• Yingtie Village Community (VI) was established in the 1990s, covering an area of 0.57 square kilometers with a population of 13,000. It is bordered by the Jingwu Overpass to the east, Yingtuo Huayuan Road Community to the south, the East Long-Distance Bus Station to the west, and Xuanwu Avenue to the north.

4.2. Resilience Evaluation Results

4.2.1. first-level indicator, 4.2.2. second-level indicator, 4.2.3. third-level indicator, 4.3. validity and reliability of the empirical results.

• Suojin Village Community (I) established an efficient information communication mechanism to ensure that residents were kept up to date with the latest pandemic developments. Among the interviewed residents, there was widespread satisfaction with the community’s pandemic prevention and control performance. However, it performs poorly in pedestrian and bicycle lane (B1). Thus, it is advised that the walking and cycling systems be improved, the public transit system be made more accessible, the transportation network and transfer facilities be laid out sensibly, and the environment for slow traffic be improved in the ensuing resilience enhancement construction. Furthermore, the community slow traffic road system’s design and optimization must be combined in order to offer adaptable motor vehicle management plans, such as restricting parking during public health emergencies to lower safety risks.
• Bancang Community (II) performs well in public service facilities (B9) and recovery adaptability (B14). Residents expressed universal satisfaction with the community’s pandemic prevention and control performance: during the pandemic, the town plaza was rapidly converted into an emergency center, significantly slowing the spread of the virus. However, it performs poorly in open space (B4). Thus, it is advised that open green spaces be used for more purposes and that outdoor activity areas be planned with consideration for the local climate and the demands of the occupants throughout the ensuing resilience enhancement construction. In addition, it may guarantee comfortable slow traffic by improving the accessibility and connection of public areas like parks and block green areas. Simultaneously, adjust the spatial layout in accordance with the requirements of the inhabitants, such as by including rest spaces and lights in the park, to provide a better open area for everyday community activities.
• Zixincheng Community (III) performs poorly in emergency support facilities (B10). The majority of the citizens were dissatisfied with the community’s pandemic prevention and control performance. It is recommended to improve the configuration of medical equipment to ensure meeting various medical needs. Balanced layout and adding facilities to fill gaps and expand service coverage are essential. Additionally, establishing a 15-min disaster prevention and epidemic prevention zone and increasing facilities such as health stations can enhance epidemic prevention capabilities.
• Jiangwangmiao Community (IV) performs poorly in transportation space (B3). It is recommended to optimize the punctuality of public transportation and integrate non-motorized transportation, increase the density of bus stops, and reduce waiting times. Additionally, it is crucial to strategically allocate public transportation, medical facilities, and open spaces, establish a network of slow traffic and life services covering the community, and promote the development of a healthy community.
• Huayuan Road Community (V) performs poorly in emergency defense space (B7). It is recommended to optimize emergency shelters to respond to public health emergencies. It is suggested to establish construction standards that match the community, renovate public buildings to meet disaster response needs, and consider public and commercial facilities as potential shelters. Establishing and updating relevant databases for the rapid conversion of space use is also recommended.
• Yingtie Village Community (VI) performs poorly in supply storage space (B6). It is recommended to improve community emergency material reserves by establishing dedicated storage facilities. Implementing efficient material storage and rotation systems, and integrating community resources to optimize emergency provisioning, are crucial steps. Ensuring the seamless supply and utilization of materials in both emergency and normal situations, covering all residents and organizations, will enhance emergency response capabilities.

5. Discussion

5.1. optimization strategy from a full cycle perspective, 5.1.1. optimization strategy for preparation and prevention phase, 5.1.2. optimization strategy for impact and response phase, 5.1.3. optimization strategy for recovery and adaptation phase, 5.2. practical application in real-world circumstances, 5.3. limitations of the study, 6. conclusions, author contributions, institutional review board statement, informed consent statement, data availability statement, acknowledgments, conflicts of interest.

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Zhang, F.; Wang, D.; Zhou, X.; Ye, F. Community Resilience Evaluation and Construction Strategies in the Perspective of Public Health Emergencies: A Case Study of Six Communities in Nanjing. Sustainability 2024 , 16 , 6992. https://doi.org/10.3390/su16166992

Zhang F, Wang D, Zhou X, Ye F. Community Resilience Evaluation and Construction Strategies in the Perspective of Public Health Emergencies: A Case Study of Six Communities in Nanjing. Sustainability . 2024; 16(16):6992. https://doi.org/10.3390/su16166992

Zhang, Fang, Dengyu Wang, Xi Zhou, and Fan Ye. 2024. "Community Resilience Evaluation and Construction Strategies in the Perspective of Public Health Emergencies: A Case Study of Six Communities in Nanjing" Sustainability 16, no. 16: 6992. https://doi.org/10.3390/su16166992

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CASE STUDY OF COCA COLA’S 4PS, SWOT ANALYSIS, MICRO & MACRO ENVIRONMENT (PEST)

• October 2017

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• Key Differences

Know the Differences & Comparisons

Difference Between Micro and Macro Environment

While microenvironment has a direct impact on business activities, the macro environment is a general business environment, which influences all business groups at large. It is important to learn the business environment, so as to understand the effect of various forces on business. Take a read of the given article to know the difference between microenvironment and macro environment.

Content: Micro Environment Vs Macro Environment

Comparison chart.

Definition of Micro Environment

Microenvironment refers to the environment which is in direct contact with the business organization and can affect the routine activities of business straight away. It is associated with a small area in which the firm functions.

The microenvironment is a collection of all the forces that are close to the firm. These forces are very particular for the said business only. They can influence the performance and day to day operations of the company, but for the short term only. Its elements include suppliers, competitors, marketing intermediaries, customers and the firm itself.

Micro Environment

• Suppliers are the ones who provide inputs to the business like raw material, equipment and so on.
• Competitors are the rivals, which compete with the firm in the market and resources as well.
• Marketing intermediaries may include wholesalers, distributors, and retailers that make a link between the firm and the customers.
• Customers / Consumers are the ones who purchase the goods for their own consumption. They are considered as the king of business.
• The firm itself is an aggregate of a number of elements like owners like shareholders or investors, employees and the board of directors.

Definition of Macro Environment

The general environment within the economy that influences the working, performance, decision making and strategy of all business groups at the same time is known as Macro Environment. It is dynamic in nature. Therefore it keeps on changing.

It constitutes those outside forces that are not under the control of the firm but have a powerful impact on the firm’s functioning. It consists of individuals, groups, organizations, agencies and others with which the firm deals during the course of its business.

Macro Environment

The study of Macro Environment is known as PESTLE Analysis. PESTLE stands for the variables that exist in the environment, i.e. Political, Economic, Socio-cultural, Technological, Legal and Environmental. These variables, consider both economic and non-economic factors like social concerns, government policies, family structure, population size, inflation, GDP aspects, income distribution, ethnic mix, political stability, taxes, and duties, etc.

Key Differences Between Micro Environment and Macro Environment

The following are the major difference between micro and macro environment:

• The microenvironment is the environment which is in immediate contact with the firm. The environment which is not specific to a particular firm but can influence the working of all the business groups is known as Macro Environment.
• The factors of the microenvironment affect the particular business only, but the macro-environmental factors affect all the business entities.
• The microenvironmental factors are controllable by the business but to some extent only. However, the macroeconomic variables are uncontrollable.
• The elements of the microenvironment affect directly and regularly to the firm which is just opposite in the case of the macro environment.
• The study of the microenvironment is described as COSMIC analysis. Conversely, PESTLE Analysis is a study of the macro environment.

Video: Micro Vs Macro Environment

Microenvironment and macro environment, both cover the overall environment of business. So, they are more complementary rather than contradictory. The study of these environments will help to know the strength, weakness, opportunity and threat of business.

You Might Also Like:

Preksha says

January 12, 2017 at 11:34 am

Wonderfully written.

January 12, 2017 at 11:35 am

In which category would service provider come?

Surbhi S says

January 12, 2017 at 12:15 pm

samuel onyema says

March 23, 2019 at 3:11 am

can you help me with the Harvard referencing of your journal Difference between micro and macro environment

luthando says

January 23, 2017 at 12:48 am

Wonderfully written it makes sense

Timothy says

March 4, 2017 at 9:03 pm

Adane zewude says

March 22, 2023 at 5:24 am

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ntongo dianah says

May 31, 2017 at 2:49 pm

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Siddharth Deshpande says

December 20, 2017 at 8:19 pm

Thank you so much for the article! Very well stated!

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February 19, 2018 at 3:56 pm

Far better than reading boring books with so much repetition. Thank you 🙂

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Its helpful for my assignment

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April 11, 2018 at 10:22 pm

Well written & easy to understand

February 11, 2019 at 2:56 pm

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July 2, 2019 at 3:08 pm

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July 8, 2019 at 1:04 am

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Maureen says

August 17, 2019 at 10:30 pm

The micro and macro environment that influence the business. I require reasons. please help me sir.

March 25, 2020 at 10:34 pm

helpfull but i have to relate this to law enforcement enviroment

help with Havard referencing

Isagani says

November 27, 2020 at 5:26 am

Thank you. It’s a big help to my research

November 29, 2020 at 5:51 pm

This is a very, very clear article that has clarified the differences between the micro and macro environment. I found the advice to think of the environments as complementary rather than contradictory to be especially helpful. Thank you!

Matildah Chileshe says

December 8, 2020 at 8:34 am

wonderfully written and easy to understand.

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February 7, 2022 at 12:00 pm

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July 17, 2022 at 4:44 pm

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January 30, 2023 at 1:48 pm

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March 19, 2023 at 12:41 pm

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October 16, 2023 at 3:16 pm

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Essay Service Examples Business Kellogg

Case Study of Kellogg: Analysis of Micro and Macro Environment, Strategic Management Plan

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• The political factor that impacts Kellogg's company: political factor has a great impact on the business organization. The political stability, diplomatic relation with the other country, business relation with union those things influence the business. Government action, public policy affect the organization. As the Kellogg's doing their business in different countries. Before starting a business in the new country they focus on the publication factor of that country. Those are the risk of military invasion, level of corruption, intellectual property protection, taxation system, industrial safety regulations and so on (fernfortuniversity, 2018). If these factors are in favor of the Kellogg company than they start their business in that country. So if the company decides to increase its sell to the other countries and make new outlets over their this environment create problems to attain the goal.
• The economic factors that impact Kellogg's company: Economic factors such as the inflation rate, saving rate, interest rate, foreign exchange rate, etc. This rate has a great impact on the business. If the business economic condition is very weak no multinational company wants to go, there. We know Zimbabwe in the highest inflation rate country in the world (Aljazeera, 2019). so n company wants to establish their outlet over there. So this is the impact of the economic factor in the business. The main aim of the Kellogg’s is to grow the sale of the business. So the low economic country cannot afford the high price product in that case they have fixed the price low. The profit will untimely low for setting the price low.
• Social Factors that Impact Kellogg Company: share, belief, attitude affect the business. Class, the structure of society influence the business. The educational quality of the people in society affects it most. Illiterate society will not receive everything positively. As the morning's corn flakes for the baby is very healthy. But if society is illiterate they will not purchase this because they haven't enough knowledge about health.
• Technological Factors that Impact Kellogg Company: In recent day technology is a vital factor for the business world. Technology change lots of things in the business area. Technology changes the transportation, communication and so on. For advance, transportation business organizations increase their area and selling more products. Technology changes the packaging sector most. So technology gives fuel to the business and runs so fast.
• An environmental factor that Impacts Kellogg company: Environment is a burning issue for the world. different countries have different laws regarding the environment. The business operates its business in the environment. They harm the environment. Like in Europe give tax-free for the organization that uses renewable energy. So for the company, it is must notice the environmental law where they conduct their business. Kellogg work for the environment. They produce their raw materials. They use less water and less energy in the land. Try to reduce the greenhouse gas emission (www.kelloggs.com, 2019)DZ. So the environmental factor has a great influence on the business factor. They have saved the environment and less pollute the environment.
• The demographic factor that impact Kellogg company: the population is one of the major factors. The age, gender, family, etc. affect the sale of the Kellogg.

Internal analysis

Value chain.

• Inbound logistics: concerned with warehousing, receiving and managing inventory.
• Operations: converts raw material into a finished product.
• Outbound logistics: concerned with distributing the final products to the consumers.
• Marketing and sales: concerned with increase sales by promoting the product or service through advertising, pricing, etc.
• Service: concerned with enhancing customer relationships by giving maintenance, repair services, etc.
• Procurement: concerned with getting supplies of raw materials.
• Technological development: concerned with the organization's research and development stage.
• Human resources (HR) management: concerned with hiring, retaining and training the organization's employees.
• Infrastructure: concerned with planning, accounting, finance, and quality control.
• Dogs: Dogs show a low market position and generate low cash returns. Asia Pacific segment market call called the Dogs of Kellogg company.
• Cash cows: This segment indicates the low sale growth rate high market share embraced of the stars. Kellogg should introduce new products to the market and increase its sales. The US in the low growth market but highly profitable market.
• Stars: These operate in industries of high growth and can later become cash cows. US market can call the stars for the Kellogg company. They generate the highest income from the US market. Europe market also is the stars market (BCG, 2018).
• Question marks: These hold low market shares, incurs losses and need closer consideration. In the US the Kellogg sells high morning foods but they cannot gain market share in the morning food.

SWOT Analysis

• Kellogg product produces almost 18 countries and sells its product more than 118 counties.
• The largest acquisition was made by Kellogg’s.
• Kellogg is the world's best cereals maker (Bhasin, 2019).
• Kellogg spent 1 billion dollars annually for creating awareness.
• Some of Kellogg's marketing campaigns and methods have been questioned by the customers.
• Being unable to capture the developing market made Kellogg’s slow in innovation.

Opportunity:

• There are lots of developing the market in different counties they can easily target those markets.
• They can make their contract with a new growing agent like food restaurants.
• Lots of cereal makes created in recent years. This is one of the big threats for Kellogg.
• The threat of new entrants: This means the new company enters the market. The level of entry relies highly on the market entry cost. Entry cost means a new company launches their product to the market buys a switch to the new product with a new price. This new entry can create a problem for the business. If the organization does not create its position strong than the new company can make it's market easily. this will reduce the sale of the organization. As Kellogg has a great market position and brand name-new entrants have a very little thread for the company. Kellogg company invests a huge amount of money into the advertising this could not be afforded by the new entrants.
• Competitive rivalry: This factor indicates how powerful the competitors are. How many competitions in the industry? The strength of the competitors. How well they control the market. For the Kellogg in the UK market, there have Weetabix and general mills are great competitors in the same market. (paper, 2018) So these are the competitive rivalry for the Kellogg. Kellogg has to face this competition and maintain the intense price war.
• Supplier power: The supplier power depends on the number of the supplier in the market. If there are so many suppliers in the market than the supplier cannot increase the price of the commodity. This thing depends on the type of product also. If the product is rare than the supplier uses this issue. If there are many suppliers than the organization, choose the cheap one. Kellogg is a large company. Their main suppliers are the sugar, food grain and flour. In the market for this kind of material, there are lots of suppliers. Kellogg has great control over their supplier.
• Availability of substitute: This product substitute creates a problem for the organization. The price of the substitute product, the taste of the product and the cost of changing the product are the determinates of the substitute product. Some substitute for the Kellogg company is the cereal bars and pop tarts. Which interning to the market of Kellogg. Consumer changes their taste from the cereals. Kellogg reluctant to change its price to compete with competitors.
• Buyer bargaining power: Kellogg tries to control the buyer power by adopting a good marketing strategy. Kellogg involves lots of physical education and health maintenance activities to create product awareness. Kellogg sells its product to the big super shop. But the thread is that that super shop has their product. Kellogg told their super shop to make the shelves full by the product of Kellogg. This look so attracting to the customer. The company is very large so the power of buyers is low.
• Cost leadership.
• Market segmentation.
• Product differentiation.

Bibliography

• Aljazeera, 2019. Aljazeera. [Online]
• Available at: https://www.aljazeera.com/ajimpact/imf-zimbabwe-highest-inflation-rate-world-190927004536305.html
• BCG, 2018. BCG. [Online]
• Available at: https://bcgmatrixanalysis.com/bcg-matrix-analysis-of-kellogs-company/
• Bhasin, H., 2019. marketing91. [Online]
• Available at: https://www.marketing91.com/swot-analysis-kelloggs-kelloggs-swot-analysis/
• Businessjargons, 2018. businessjargons. [Online]
• Available at: https://businessjargons.com/business-strategy.html
• fernfortuniversity, 2018. fernfortuniversity. [Online]
• Available at: http://fernfortuniversity.com/term-papers/pestel/nyse4/702-kellogg-company.php
• mindtools, 2018. mindtools. [Online]
• Available at: https://www.mindtools.com/pages/article/newTMC_08.htm
• MOHANTY, S., 2019. marketrealist. [Online]
• Available at: https://marketrealist.com/2016/04/whats-kelloggs-2020-vision-strategy/
• paper, R., 2018. Research paper. [Online]
• Available at: https://s3.amazonaws.com/academia.edu.documents/32913782/Strategic_Management_casestudy._Sidney..pdf?response-content-disposition=attachment%3B%20filename%3DANALYSIS_OF_KELLLOGGS_CORPORATE_STRATEGY.pdf&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKI
• www.kelloggs.com, 2019. www.kelloggs.com. [Online]
• Available at: https://www.kelloggs.com/en_US/who-we-are/environmental-initatives.html

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Amazon’s Micro and Macro Environment Harvard Case Solution & Analysis

Home >> Marketing HBS Case Solutions >> Amazon’s Micro and Macro Environment

Amazon, founded as an online bookstore in 1994, is one of the largest retailer and online shopping site in the world. The company is selling millions of products in numerous categories globally with the U.S as its biggest market in terms of number of products.The company is selling nearly 232 million products in the U.S market, which are categorized into 35 different categories(Export-x, n.d). Besides e-commerce business, the company is also manufacturing and selling tablets, TVs and Phones under the brand name of Fire(Reuters, n.d).

Macro Environment

The society of Amazon consists of its customers, suppliers, employees, competitors and other people, who may not be directly linked with the company, but are included in the company’s society. The company designs and implements its policies keeping in view the impact on the members of its society.Amazon not only focuses on growth, but also benefits its stakeholders in every possible way. The company is constantly upgrading its business by adding more products to its business, which will allow its customers to buy almost anything they want, under one roof(hub, n.d).

Demographics and Psychographics

The demographic variables like age, gender, ethnicity, religion and nationality of the company’s customers constitute the company’s demographics. Amazon’s sales comprise of contribution from every variable, which signifies the company’s objectives of selling the products without any discrimination and most importantly customer satisfaction.

The customer psychology is an important aspect to consider, in order to increase the sales and growth of the company. Amazon provides a reduction in prices on its products in the form of discounts and free shipping offers. This not only attracts the new customers, but makes them loyal as well. Moreover, Amazon Prime has created a distinctive class of customers, which has attracted the higher income class of the society as well(Charts, n.d).

Amazon is operating through 15 independent sites while selling its products in more than 200 countries. In this regard, the purchasing power of the customer plays an important role in the revenues and profitability of the company. Moreover, the overall economic stability and economic circumstances also play a significant role in the smooth operations of company’s business.Amazon is operating in the industry, which is in the growth phase. Therefore, the company adjusts its operations and policies, considering the overall economic environment of the local as well the global economy.

Natural / Physical

The natural and physical aspect of Amazon consists of different companies, which are operating with the Amazon and the environment in which the company is operating. Amazon, being an online e-commerce company, is operating its business virtually through its website. However, in order to store the products and run the business processes, the company has its offices in different regions. These surroundings and environment constitute the company’s external environment, which affects the company’s business and vice versa.

Amazon has taken the initiative through CSR to maintain and beautify its environment while complying with the regulatory requirements in order to survive in the economy.

Political / Legal

The legal environment of Amazon provides distinctive guidelines and regulations, in which compliance is mandatory for the company. Therefore, the company needs to align its work procedures accordingly. Amazon, being an American based company, needs to follow and abide by the laws and regulations, that are imposed on the industry in which the company is operating. These regulations may include the reporting requirements,which are imposed by the U.S accounting body.

The political environment affects the company’s operations in the form of the policies, which are designed by the Government and are relevant to the company’s industry. The Government’s policies about the retail and online businesses are relevant to the business of Amazon. Amazon’s Micro and Macro Environment Case Solution

Technological

Amazon is an online e-commerce company, which is selling its products through its website . The company is surrounded and operating in a technological environment, which is a constantly changing and developing environment. Therefore, Amazon needs to constantly adapt to the new changes that are relevant to its business. Any lag in adopting the new technology will throw the company out of the competition (Marketplace, n.d).

Micro environment

Collaboration

Collaboration is an important aspect to survive in the competition and in the market. Amazon has collaborated with the companies like SAP in order to develop Amazon Cloud. This has made Amazon to enter into a totally new business while providing it a way to diversify and expand its business(Bloomberg, 2007).........................

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