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Microenvironment vs. Macroenvironment

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

1. “What do we do?”
2. “For whom do we do it?”
3. “How do we excel?”

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.

1. Micro (internal) environment – small forces within the company that affect its
ability to serve its customers.
2. Internal environment – can be controlled, however, it can’t influence an external
environment.
3. 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.
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. 

Micro Environment Factors

 Suppliers: Suppliers can
control the success of the
business when they hold
power. The supplier holds the
power when they are the only
or the largest supplier of their
goods; the buyer is not vital to
the supplier’s business; the
supplier’s product is a core
part of the buyer’s finished
product and/or business.

 Resellers: If the product the

organisation produces is taken
to market by 3rd party resellers
or market intermediaries such
as retailers, wholesalers, etc.
then the marketing success is
impacted by those 3rd party
resellers. For example, if a retail seller is a reputable name then this reputation
can be leveraged in the marketing of the product.

 Customers: Who the customers are (B2B or B2C, local or international, etc.) and
their reasons for buying the product will play a large role in how you approach the
marketing of your products and services to them.
  The competition: Those who sell the same or similar products and services as
your organisation is your market competition, and the way they sell needs to be
taken into account. How do their prices and product differentiation impact you?
How can you leverage this to reap better results and get ahead of them?

 The general public: Your organisation has a duty to satisfy the public. Any
actions of your company must be considered from the angle of the general public
and how they are affected. The public has the power to help you reach your
goals; just as they can also prevent you from achieving them.

Macro Environment Factors

 Demographic forces: Different market segments are typically impacted by

common demographic forces, including country/region; age; ethnicity; education
level; household lifestyle; cultural characteristics and movements.

 Economic factors: The economic environment can impact both the

organisation’s production and the consumer’s decision-making process.

 Natural/physical forces: The Earth’s renewal of its natural resources such as

forests, agricultural products, marine products, etc must be taken into account.
There are also natural non-renewable resources such as oil, coal, minerals, etc
that may also impact the organisation’s production.

 Technological factors: The skills and knowledge applied to the production, and

the technology and materials needed for the production of products and services
can also impact the smooth running of the business and must be considered.

 Political and legal forces: Sound marketing decisions should always take into
account political and/or legal developments relating to the organisation and its
markets.

 Social and cultural forces: The impact the products and services your
organisations brings to market have on society must be considered. Any
elements of the production process or any products/services that are harmful to
society should be eliminated to show your organisation is taking social
responsibility. A recent example of this is the environment and how many sectors
are being forced to review their products and services in order to become more
environmentally friendly.

Wrap Up

Micro and macro environments have a significant impact on the success of marketing
activities, and therefore such environmental factors must be considered in-depth during
the process of creating a strategic marketing plan.
Micro Environment Analysis of Samsung

Samsung was founded by Lee Byung-chul. In 1938 Samsung was born as a company
that was dealing with fruit & vegetable and dried fish. The company was exporting its
product from South Korea to Beijing in China. In 1969, Samsung Electronics was born.
From there, the company started acquiring and creating different business
establishments including a hospital, paper manufacturing plant, life insurance company,
department stores and many others

In 1974, Samsung electronics acquired half of Korea Semiconductor -this made it the
leading electronics manufacturer in the country.

In eighties Samsung Electronics merged with Samsung Semiconductors and

Telecommunications.

http://www.streetdirectory.com/travel_guide/116664/electronics/the_history_of_samsun
g.html

MICRO ENVIRONMENT ANALYSIS OF SAMSUNG

The aim of this section is to conduct an internal environment analysis of Samsung which
will investigate the environment in which Samsung operates in. components of the
analysis will be those in which the company has control over, as known as internal
environment.

2.1 Strength
Samsung is the second biggest telecommunication industry in the world through its
innovation smart phone.

Samsung is leading in design features. For example Samsung is the first one to produce
dual screen phones, and they have a thinnest and lightest note pad ever.

2.2 Weakness
 Their prices are low, hence their product loss value easy in the market
  They launch a new phone after another that can cause confusion to the
customers.

 Poor creativity in terms of software, mostly they steal Apples software ideas

 Their products are not use friendly, as compare to Nokia phones

 They are leading in hardware but they have too much dependence for their
software from other parts.

EXTERNAL ENVIRONMENT ANALYSIS OF SAMSUNG

This section will focus on the Macro environment of Samsung and I will explain how the
external factors affect the company by looking in their opportunities and threats also go
through PESTEL analysis.

Threats
Low cost competitors from China can affect Samsung

All Samsung competitors bought their product parts in Chine that can lead a future fall
to Samsung.

Apple is dominating in South and North America, and builds its brand to make any new
difficult to operate there.

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Opportunity
Samsung need to introduce user friendly products and educate their market about their
product, because there is a big market in Africa yet the majority is uneducated,

Here in South Africa they need to open their own stores, whereby they go to sell only
their own products

Samsung could launch no name brand like MTN and Vodafone whereby they will take
the out date old model, change only a cover and sell with cheaper price.