VILLANUEVA, JULIAN V.

II-AOA

The macro-environment is in more general, it is the environment in the economy

itself. It has an effect on how all of the business groups operate, perform, make
decisions, and form strategies . The companies are not alone in its business
environment. It is surrounded by and operates in a larger context. It can also directly
affect the consumers’ ability and willingness to spend. Consumers’ reactions to the
macro-environment are closely monitored by businesses and economists as a gauge for
an economy’s health. The factors that make up the macro-environment are economic
factors, demographic forces, technological factors, natural and physical forces, political
and legal forces, and social and cultural forces. One of such factors that make up the
macro-environment is the Economic forces. Economic is the factor that help us to
determine the competitiveness of the environment in which the firm operates. The
economic is the very environment of the economy, it can have an effect on two essential
aspects, the company’s levels of production and the decision-making process of your
customers. It refers to all the external economic factors that influence buying habits of
consumers and businesses and therefore affect the performance of a company. These
factors are often beyond a company’s control. The inflation is one of the economic
factors that affects the business. Inflation is the rate at which the general level of prices
for goods and services is rising and, consequently, the purchasing power of currency is
falling. Another factors is employment, it is when all available labor resources are being
used in the most efficient way possible. Another factor is the Disposable income, also
known as disposable personal income (DPI), it is the amount of money that households
have available for spending and saving after income taxes have been accounted for.
DPI is often monitored as one of the many key economic indicators used to gauge the
overall state of the economy. Next factor is the business cycle, also known as
the economic cycle or trade cycle, is the downward and upward movement of gross
domestic product (GDP) around its long-term growth trend. The last factor is the energy
availability and cost. These are the once that forces motivating firms and consumers to
supply, convert, transport, use energy resources, and to dispose of residuals; market
structures and regulatory structures; distributional and environmental consequences;
economically efficient use. These factors determine an enterprise’s volume of demand
for its product and affect its marketing strategies and activities.