Company macroenvironment: what is it and what factors constitute it?

Let's look at what the company's macro-environment is and why it should be taken into account in business.

Companies are not isolated entities in the world, but are immersed in a system full of very different variables.

Therefore, it is important to take into account the particularities of the environment in which a company is operating, as it will be essential to determine which are the most efficient operations in each case. We are going to analyze this fact through the concept of the company's macro-environment..

What is the company's macroenvironment?

When we speak of the macroenvironment of the company, we are referring to the all the factors that make up its environment and that in some way are directly or indirectly connected to its processes.. Therefore, this grouping of elements will contain some that benefit the company and others that hinder its operation.

Within the company's macro-environment we will find all kinds of factors, such as political, social, those referring to the population with which the company operates, those referring to the technologies used, and of course those referring to the economic context, and more. We will analyze all of them in more detail later on.

The common characteristic of all these elements is that they are external to the company itself, in the sense that their conditions are given and cannot be modified by the company.. On the contrary, what it must do is adapt, taking advantage of those factors that are beneficial to it and adopting policies that allow it to cushion or even avoid the effects of those that are potentially harmful.

We see, then, the delicate relationship that exists between the company's macro-environment and its own functioning and viability. It is therefore it is therefore essential for managers to have an in-depth knowledge of their business environment so that they can take advantage of it or avoid its potential dangers, as far as possible.It is therefore essential for managers to have a thorough understanding of their business environment so that they can take advantage of it or avoid its potential pitfalls, as far as possible, by devising strategies to that effect in the relevant departments.

Parts of the company's macro-environment

We have already pointed out that the company's macro-environment is made up of very different types of elements, and for each of them, the company will have to establish the appropriate procedures that will enable it to extract the maximum benefit from the situation or reduce the risk as much as possible, depending on whether the factor is beneficial or unfavorable.

The following is a breakdown of the main types into which all the elements that make up a company's environment, or, in other words, the company's macro-environment, can be grouped.

Demographics

One of the first considerations to be made even before creating a business is to analyze everything related to the population to be served. to analyze everything related to the population to which the offered product or service is going to be directed.. That is to say, we must know in depth the demographic characteristics of the group of potential consumers.

Therefore, the viability of a company will depend on a correct interpretation of a correct identification of the demands of the people of a given place. In this sense, the company will have to analyze which is the appropriate population segment to focus on and whether the demographic characteristics of a region are suitable for such a prediction..

Therefore, the first factor to take into account with respect to the company's macro-environment will be demographics. Some examples are the different population groups that can be found in a city, in the outskirts of a city, in a rural area, on the coast, in one or another autonomous community, or any other factor that may alter the distribution of the population.

If the product marketed by the company is aimed at people of a very specific age or with very specific characteristics, it is logical that all efforts should be made to bring the product to the areas where individuals from that particular circle are most abundant.

2. Technology

Continuing with the second factor of the company's macro-environment, we now find everything related to technology and the possible innovations that may occur in this area. In this sense the company must be constantly informed of these changes in order to be able to adapt to them and benefit from them whenever possible..

The launch of a new device or a new program can give a competitive advantage to the company that is quicker to implement such an improvement, and can even increase its market share, to the detriment of other companies that have not been so quick to improve their procedures by making use of new technological opportunities.

Some of the contributions of technology may lead to slight improvements, but others may be a question of viability if they change the paradigm of the way companies in a given industry operate. In that case, it's not just a matter of being not only is it a matter of being quick to embrace change, but also of doing so in order to avoid seriously compromising the competitive capacity of the business by becoming totally obsolete in terms of procedures. in procedures.

An extreme and therefore very obvious case may be the generalization of the use of the Internet in all areas, including business. In this case, companies that took a little longer to adapt, or did not adapt at all, and lost the advantages of something as basic as sending e-mails instantaneously, could even disappear in the face of their competitors.

3. Society

Another group of factors that occupy an important position within the macro-environment of the company are the social ones. In contrast to the demographic characteristics mentioned above, social factors are more changeable and volatile.. A company can leverage the characteristics of a given society to its advantage, but it can also try to influence it to modify those characteristics.

Obviously, being able to achieve such a powerful effect is only within the reach of renowned brands that have a powerful position in the market and have a large share of consumers with a high degree of loyalty.

Today, social networks are an indispensable tool for any company, both to establish a social presence and to relate directly with consumers, as well as to listen to them and find out what they think and what they need. Therefore, they are the perfect way to discover the potential of the social factors of the company's macro-environment and to be able to use them to the company's advantage.

Networks allow everything to happen and to be commented on in a fleeting manner.. It is therefore essential that those responsible for managing the profiles of the company in question are quick and astute to know what movements or topics can be a way to advertise products, increase reputation or generate content that can go viral among potential consumers.

4. Economics

The fourth group of factors of the company's macro-environment is the economy. It is obvious that the economic situation of the environment in which a given corporation is located will have a direct influence on its performance. Situations such as a generalized crisis or even a recession can be extremely harmful for a company..

In these cases, companies will have to take measures that will allow them to get through the difficult moment, taking advantage of their resources in the most efficient way possible. Likewise, if the economic context is favorable and the region or country experiences growth, it may also have an impact on the policies of companies, which will be able to make more investments, knowing that the situation allows it, since the risks are lower.

5. Politics

Political factors close the list that makes up the company's macro-environment. Although many companies operate in a free market system, the truth is that there are a multitude of laws and regulations that There are a multitude of laws and regulations that must be complied with, so these will be essential conditions when it comes to making business decisionsin one direction or another.

Moreover, these policies do not necessarily have to be fixed, since the different administrations are constantly legislating. For this reason, every organization must pay attention to legislative changes in the regional, national and even international context, in order to anticipate the possible introduction of new laws that may affect the company.

The political factors are closely linked to the economic factors as we saw in the previous point. Therefore, in the face of a given economic situation, it is very likely that the government of the day will decide to adopt certain policies to take advantage of or mitigate the effects caused. This is why this is a group of factors of vital relevance when we talk about the macro-environment of the company.

Bibliographical references:

• Novoa, P.A.H., Macías, H.D.V. (2016). Demographic change and consumption. The importance of the macroenvironment in marketing strategies. Young people in Science.
• Van Tuyckom, C. (2011). Macro-environmental factors associated with leisure-time physical activity: a cross-national analysis of EU countries. Scandinavian journal of public health.
• Wibowo, A., Alfen, H.W. (2014). Identifying macro-environmental critical success factors and key areas for improvement to promote public-private partnerships in infrastructure. Engineering, Construction and Architectural Management.
• Yánez, J.F.T., Pazmiño, J.F. (2015). Consideración de los factores o fuerzas externas e internas a tomar en cuenta para el análisis situacional de una empresa. Revista Publicando.