...macro environment macro data market environment Definitions (2)Add to FlashcardsSave to FavoritesSee Examples 1. The major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces. 2. Specific examples of macro environment influences include competitors, changes in interest rates, changes in cultural tastes, disastrous weather, or government regulations. Macroeconomic Factors and the Management Environment by Leo Sun As a new business manager, the first thing you must be in tune with is the state of microeconomics and macroeconomics. While we are trained to pay attention to the former, the latter can often catch us by surprise and sink our business instantly. Microeconomic factors are company-specific trends. These are the factors in your business that keep it afloat. Revenue, earnings and margin are the key micro factors at your company. The size of your workforce, the production volume of your products and your advertising campaigns are all micro factors as well. In short, micro factors are parts of your business that can be fine-tuned and changed by the management. Macroeconomic factors are national and global events which are out of your control. The September 11th terrorist attacks, the financial meltdown of 2008-2009 and the European sovereign debt crisis...
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...analysis of six major forces to identify possible opportunities and threats available to the organisation. To illustrate these forces, the hypothetical “Bamboo Company” (located in Sydney New South Wales) will be used. This organisation has prided itself on the use of recyclable and renewable resources where possible and as a result, has developed the Bambicycle. This entry level hybrid bicycle combines the best attributes of a road bike and a mountain bike in one as well as being constructed by bamboo which is one of the world’s fastest growing renewable resources. An analysis of the six macroeconomic influences with reference to the Bamboo Company are as follows: THE DEMOGRAPHIC ENVIRONMENT Demographics is the statistical study of the population as a whole, consisting of the following variables and how they will affect the bicycle marketing environment: – The changing age structure of population “Australia's population, like that of most developed countries, is ageing as a result of sustained low fertility and increasing life expectancy” (Australian Bureau of Statistics [ABS], 2010a para 7). The proportion of the population aged 65 years and over is projected to increase from 13% in 2007 to between 23% and 25% in 2056, and 25% and 28% in 2101 (ABS, 2010c para 15) with the first wave of baby boomers exiting the workforce in 2011. . – The Changing Family There is an increasing trend of families...
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...This report discusses macroeconomic factors that impact both the automotive and health-care industries. Interest rates, consumer price index (CPI), consumer confidence, Gross Domestic Product (GDP), wage rates, and inventory levels impact the macroeconomic environment to influence these industries in the short run. Consumption as a percentage of the GDP depicted in table 1 indicates a continuous declined in consumer spending from 2005 through 2010 and suggests that consumers are becoming more conservative with disposable income spent on elective health-care products and procedures as-well-as new vehicle purchases. As the nominal interest rates indicate in table 2, the FED attempted to encourage consumer spending by decreasing the interest rates to encourage expansionistic economic activity, which would also be a positive influencing factor for both the health-care and automotive industries. The automobile industry is volatile by nature and heavily influence by macroeconomic factors, while the health-care industry enjoys an inelastic environment. Macroeconomic factors influence the health-care industry, it is unlikely essential health-care demand will decrease in the short term; however, elective health-care products and services will likely suffer as will new vehicle purchases as consumers remain conservative. The future is not as bleak as one might anticipate. The automotive industry is traditionally volatile and dependent upon the macroeconomic environment and currently producing...
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...Analysis of the Macroeconomic Environment within the Health-Care and Automobile Industries Abstract This report discusses macroeconomic factors that impact both the automotive and health-care industries. Interest rates, consumer price index (CPI), consumer confidence, Gross Domestic Product (GDP), wage rates, and inventory levels impact the macroeconomic environment to influence these industries in the short run. Consumption as a percentage of the GDP depicted in table 1 indicates a continuous declined in consumer spending from 2005 through 2010 and suggests that consumers are becoming more conservative with disposable income spent on elective health-care products and procedures as-well-as new vehicle purchases. As the nominal interest rates indicate in table 2, the FED attempted to encourage consumer spending by decreasing the interest rates to encourage expansionistic economic activity, which would also be a positive influencing factor for both the health-care and automotive industries. The automobile industry is volatile by nature and heavily influence by macroeconomic factors, while the health-care industry enjoys an inelastic environment. Macroeconomic factors influence the health-care industry, it is unlikely essential health-care demand will decrease in the short term; however, elective health-care products and services will likely suffer as will new vehicle purchases as consumers remain conservative. The future is not as bleak as one might anticipate. The automotive...
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...The Economic Environment Facing Global Business KEY MACROECONOMIC INDICATORS • Economic Growth • Inflation • Surpluses & Deficit KEY MACROECONOMIC INDICATORS : ECONOMIC GROWTH • GDP and GNI (or GNP) – High or Low – total amount of goods and services produced in a year within the domestic territory) or GNI (GDP + net income) – Per capita GNI (total GNI divided by total population) – PPP GNI (unmber of units of a country’s currency required to buy the same goods and services in the domestic market that $1 will buy in USA KEY MACROECONOMIC INDICATORS : INFLATION • Increase in prices • Inflation rate percentage increase in the change in prices from one period to another, usually a year • Demand more than supply • Inflation effects – interest rates – exchange rates – cost of living and – General confidence in a country’s political and economic system KEY MACROECONOMIC INDICATORS : INFLATION • Inflation and Interest rates • High inflation – High interest rates KEY MACROECONOMIC INDICATORS : INFLATION • Inflation and Exchange Rate • Higher inflation – devaluation • Case 1 • UK exporter – US distributor • Cost 100 pounds Exchange rate $1.59 / GBP • Cost to US distributor $159 • Case 2 – High Inflation – exchange rate constant – exports will be costly • Cost 110 pounds Exchange rate $1.59 / GBP • Cost to US distributor $174.90 – High Inflation – currency devaluation – exports will be competitive • Cost 110 pounds Exchange rate $1.47 / GBP • Cost...
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...Impact of Macro Changes on Managerial Decisions Jones International University MBA502: Economic Theory and Applications Ciera Comstock Table of Contents [ No table of contents entries found. ] Macro-Environment Macro Environment is known as a company and all of the other actors operating in a large macro environment of forces that shape opportunities and pose threats to the company. There are major external and uncontrollable factors that influence an organization’s decision making and affect its performances and strategies. These factors include the economic, demographics, legal, political, social conditions, technological changes, and natural forces are known as the macro environment. (Johnston, 2014) Macroeconomics is intertwined with business because it is affected by all of the factors that constitutes macroeconomics. Macroeconomic is a branch of the economy that deals with certain issues that are relating to factors that affect the economy of the country as a whole. These factors include areas like the rate of unemployment, inflation, business cycles and also Gross Domestic Product (GDP). This is a big section to keep in mind when making a decision and is part of the marketing analysis. (wiseGEEK, n.d.) This environment could impact competitors, changes in interest rates, changes in cultural tastes, and also any change in government regulations. That influences a company and its’ products development. It will also change the competitors, the interest rates...
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...MACROECONOMICS & THE GLOBAL ECONOMY Instructor SATYENDRA TIMILSINA What is Macroeconomics? • It is that branch of economics, which deals economic affairs at large i.e. total or aggregates • Concerns itself with variables such as – – – – Aggregate output of the economy Extent to which its resources are used Size of National Income General Price Level Introduction • Managers have to deal with economic environment at two levels – micro level and macro level • Micro level includes market structure and the strength of competitors. Firm’s decision making is mostly influenced by the activities of its rival forms. The following are some factors that affect firms decision at micro level – Level of competition – Cost of production and – Product differentiation Introduction • Macro level includes the overall system. This is something that the firm assumes to the given. • Decision making of the firm is affected by the macroeconomic environment. • The following macroeconomic factors have a strong effect on firm’s decision making – Overall Demand – Price Level – Rate of interest – Tax policies and – Exchange Rates Introduction • It is important for managers to know the macroeconomics because an unprecedented change in any of these factors can upset the revenue and cost of the firm, affecting the profitability and returns. • The problem can be minimized or managed if managers know the working of an economy and thereby, judge the...
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...MACROECONOMICS: A General Overview Finance is based on economics. Therefore, to properly understand financial markets and their behavior one must first understand economics. Economics at its core is concerned with the production, distribution, trade and consumption of goods and services. To put this in human terms we can say that economics is the science that arises out of the interplay between limited resources and unlimited human wants and needs. There are two basic ways to view economics. There is the broad and distant view, which attempts to view things in aggregate for a society at large. We call this view “Macroeconomics”. Macroeconomics is concerned with the status of the economy as a whole. Thus, it looks at overall employment of a general population or overall income of a nation as opposed to a more focused view of a population segment or specific industry. This view is helpful because it is only by this kind of analysis that we can see the general trends which a society or nation is following. Macroeconomic theory and analysis is employed most often by Governments and institutions, which have a responsibility to make policies and decisions which affect the economy as a whole. Some terms you may have heard of which concern themselves with the macroeconomic view of the economy are Gross National Product, Inflation, Consumer Price Index and Fiscal Policy. The meaning of each of these is listed below. Gross National Product – This is the most common measure...
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...as a way of acquiring information about outside events that can aid organizations in first identifying potential trends, then interpreting them (Kerin, Hartley, & Rudelius, 2010). These trends normally consist of five sources, social, economic, technological, competitive, and regulatory forces. My intention in this essay is to focus on one; the economic environmental force. I will discuss how the current state of the economy will impact completing an environmental scan. In order to evaluate how the economy will impact the completion of an environmental scan, it is essential to cover the concerns that affect the economic aspect whether people want to believe it or not. The first concern is the macroeconomic level or factors which cannot be controlled. Leo Sun describes macroeconomic factors as national or global events which are out of people’s control (Sun, 2013).They have an unpredictability and dangerous side to them that can cause most companies to fail if not managed by an experienced individual. One very recent example of this is the Boston Marathon attacks that left three people dead and approximately 170 injured. We have not seen the fallout of this attack economically, but there could be one to follow that will affect the consumers, businesses, and organizations alike. When negative macro factors present themselves, a snowball effect then seems to occur economically. It is important for a company to deal with these factors as soon as possible. Recession, inflation...
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...Assignment 1 Module: The Business Environment Tutor: Steve Tidball Submission Date: 19th September 2013 Confidentiality: I have read, understand and adhere to the KOL Confidentiality Policy. Click here to access the KOL Confidentiality Policy. Academic Integrity Statement: I have read and understood the Academic Integrity guidelines for Kaplan Open Learning and the University Of Essex, and declare that this assignment conforms to all of the rules and regulations contained therein. Please note: the guidelines can be found in the Student Handbook (see section 6.4). Regular assignment one Introduction In this assignment, the explanation of the macroeconomic and microeconomic environment will be happen with the aid of examples. Once this has been completed, a critical analysis of how the economic environment in recent years has affected Hampshire fire and rescue service will be made. Main Body The Macroeconomic environment The Macroeconomic environment is an examination of the economy. The macroeconomic environment is an important one because the analysis compiled enables a business to investigate an economy and see what trends are occurring. For instance, if the economy has grown since the last analysis or shrunk. The difference between the increase and decrease of the economy is important because the retailer has no control over how the economy grows or shrinks. There are also certain influences which will affect the macroeconomics; these are economic indicators...
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...|VI Learning activity questions: Scope of Managerial Economics | | | | | |1. What is managerial economics all about? | | | |Managerial economics applies economic theory and methods to business and administrative decision making. Managerial economics | |prescribes rules for improving managerial decisions also helps managers recognize how economic forces affect organizations and | |describes the economic consequences of managerial behavior. It links traditional economics with the decision sciences to develop | |vital tools for managerial decision making. Managerial economics identifies ways to efficiently achieve goals. For example, suppose| |a small business seeks rapid growth to reach a size that permits efficient use of national media advertising. Managerial economics | |can be used to identify pricing and production strategies to help meet this short-run objective quickly and effectively. | | ...
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...CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF THE STUDY For decades now, Nigeria has been experiencing disappointing performance in terms of growth in gross domestic product (GDP) and the general development of her economy. As a result, there’s no improvement in the level of poverty. In the 90s, came the era of globalization which connotes external opening and increased role of markets domestically (i.e. the market economy). To the developing world, market economy is a modern way of turning the economy around. The essence of globalization is to move the economy towards external liberation, focusing on market oriented economic system, export-led strategy and stabilization of the economy. In Nigeria, it was the era of structural adjustment programme in collaboration with the IMF and World Bank. The governments in the developing world, believes that it is more desirable to globalize which simply means to open up the economy and penetrate international markets. In time past, the world economy has undergone a fundamental shift towards an integrated and coordinated global division of labour in production and trade. In the 1950s and 1960s, productions were within national boundaries. The increase of oil prices in the late 1970s and the contractionary monetary policies of the United States during 1979 and 1982 period led to the increased interest rates and consequently indebted developing countries found they unable to service their debts. Continual refinancing was the only...
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...|CONTENTS | |THEORY COURSE: | |Title sheet [Program, Course Code - Course Name, Credit Structures, Pre-Requisite and Co-Requisite, Instructor’s Web-Link | |Address (Moodle), Name of Instructor, Division, and School] | |Official Time Table of the course | |Approved course syllabus signed by Instructor & Program chair | |Objective and Outcome Mapping | |Lesson Plan | |Assessment Scheme and Schedule | |Model Question Paper (Semester End Examination (SEE)) | |Lectures Slides, Tutorials and other Learning Resource provided (See Annexure 1) | |Assignments / Course Projects ...
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...1. Critically examine the effectiveness of various approaches that may be used to reduce macroeconomic instability. According to Mc Vaish (Macroeconomics theory, p123) Macroeconomics can be defined as the analysis of the economy wide aggregates such as the analysis of the total output and employment, total consumption, total investment, total saving and national product. Macroeconomic theory employs technique of general equilibrium in order to study the determination of the general price level, money supply, total employment and output levels and fluctuations in these aggregates magnitudes. A macroeconomic stable environment can be defined as one in which inflation is low and predictable, the exchange rate is near its equilibrium level, the government budget is well managed, the budget deficit relative to GDP is at a reasonable level and the use of central bank credit to finance the budget deficit is kept at a minimal level. Macroeconomic stability sends important signals to the private sector about the direction of economic policies and the credibility of authorities’ commitment to manage the economy efficiently. Such stability, by facilitating long term planning and investment decisions, encourages savings and capital accumulation by the private sector. Macroeconomic instability takes place in two forms namely exogenous shocks and inappropriate policies. Exogenous shocks (such as reversal capital flows, terms of trade and natural disasters) require compensatory action...
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...MACROECONOMICS PRIYANKA DEY FT171068 What is actually Macroeconomics? The branch of economics concerned with large-scale or general economic factors, such as interest rates and national productivity. So the word can be interpreted as the driving forces, factors and decisions ultimately implemented as policies that corresponds to the growth of economy of the nation are included in Macroeconomics. Let’s focus on the prospects how China managed to enter into the race turning its macroeconomics strategies and outshine as one of the major economic success taker with respect to United States. UNITED STATES(18558.13 Billions of $ GDP)- The U.S. economy has been the largest and most important in the world. The U.S. economy represents about 20% of total global output, and is still larger than that of China. The U.S. economy features a highly-developed and technologically-advanced services sector, which accounts for about 80% of its output.The U.S. also has an important manufacturing base, which represents roughly 15% of output. The U.S. is the second largest manufacturer in the world and a leader in higher-value industries such as automobiles, aerospace, machinery, telecommunications and chemicals.The country has access to abundant natural resources and a...
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