Difference between Micro and Macro Environment
Basis |
Micro Environment |
Macro Environment |
---|---|---|
Elements |
COSMIC; i.e., Competitors, Organisation (the company itself), Suppliers, Market, Intermediaries, and Customers. |
PESTLE; i.e., Political, Economics, Socio-cultural, Technological, Legal and Environmental. |
Control |
Businesses have some level of control over their micro environment through strategies and decisions directly affecting their immediate stakeholders. |
Businesses have little to no control over the macro environment, requiring them to adapt to its forces through strategic planning and forecasting. |
Impact on Business |
Has a direct impact on the company’s day-to-day operations and performance, affecting things like sales and customer satisfaction. |
Has an indirect impact, shaping the overall business climate and influencing market conditions over time. |
Involvement |
Involves factors and entities that are closely connected to the company, with which it interacts regularly. |
Involves broader societal trends and forces that the company does not directly interact with but must consider in its long-term strategy. |
Scope |
The scope is narrow, focusing on the immediate environment of the company, including internal operations and direct relationships. |
The scope is broad, covering national and global environments and the external factors that influence an entire industry. |
Predictability |
Predictable to some extent due to close relationships, allowing companies to anticipate changes like new competitor products. |
Changes are harder to predict, with economic shifts or technological breakthroughs often coming unexpectedly. |
Adaptability and Response Time |
Companies can quickly adapt to changes, such as switching suppliers or changing prices, thanks to more control and flexibility. |
Adapting to broader changes, like new trade policies or tech advancements, takes more time and requires more planning. |
Difference between Micro Environment and Macro Environment
When we talk about business, there are two main kinds of factors that can affect how well a company does. First, there’s the micro environment, which includes things very close to the company, like its customers, the people it buys supplies from, the other companies it competes with, and its employees. These are aspects the company can usually control or at least directly interact with. Then, there’s the macro environment, which involves bigger, outside forces that can impact not just one company, but lots of companies across different industries. This includes big trends like changes in the economy, new technologies, what people in society care about, laws, and the natural environment. These are things a company can’t control, but it needs to be ready for. Understanding both these areas helps a business handle day-to-day issues and also plan for the future.
Table of Content
- What is Micro Environment?
- What is Macro Environment?
- Difference between Micro and Macro Environment
- Conclusion
- Micro Environment and Macro Environment – FAQs