PITOC AND TORCINO OCTOBER, 2023

REPORTER NO. 13

MACRO
ENVIRONMENT
BUSINESS LOGIC
WHAT IS
MACRO ENVIRONMENT?
It refers to the external factors and forces that can have a significant impact on an
organization's operations, performance, and strategic decision-making.
In general, the macro environment includes trends in the gross domestic product (GDP),
inflation, employment, spending, and monetary and fiscal policy.
 PESTEL ANALYSIS
POLITICAL FACTORS ECONOMIC FACTORS SOCIOCULTURAL TECHNOLOGICAL
FACTORS FACTORS
Tax Rates Employment
Tariffs levels Demographic Internet
Trade Interest Rates Trends Smartphones
Agreements Exchange Consumer Connectivity
Labor Rates Preferences Automation
Environmental Market
Regulations Diversity
 PESTEL ANALYSIS
POLITICAL FACTORS ENVIRONMENTAL LEGAL
FACTORS FACTORS
Resources Contracts
Scarcity Laws
Recycling Intellectual
Alternative property rights
energy sources
 GLOBALIZATION AND
INTERNATIONAL FACTORS
Globalization, trade agreements, and international events play significant roles in
shaping the macro environment of countries and regions.

Currency
Economic Trade Agreements Market Access
Exchange Rates
Interdependence
These agreements This can influence
facilitate the factors like the level
Globalization has Globalization and
exchange of goods of competition within
led to increased international events
and services a country, the growth
economic can affect currency
between nations, of specific industries,
interdependence exchange rates.
leading to increased and the availability of
among countries. trade and economic diverse consumer
growth. choices.
 GLOBALIZATION AND
INTERNATIONAL FACTORS
Globalization, trade agreements, and international events play significant roles in
shaping the macro environment of countries and regions.

Environmental Political and

Technology Labor Markets
Impact Regulatory
Transfer
Factors
Globalization The movement of
International events
facilitates the people across changes in leadership
and globalization also
transfer of borders due to or international
impact the
globalization can disputes can affect the
technology and environment.
influence labor regulatory environment
knowledge across
markets. for businesses.
borders.
 Demographic Forces
Demographic forces relate changes in
human populations. This includes
population size, density, age, gender,
occupation and other statistics.

Why are people

important?
People are the driving force for the
development of an industry. The large and
diverse demographic considerations and
changes offer both opportunities and
challenges for businesses.
 EXAMPLE:

A GOVERNMENT CAN ENACT TARIFFS THAT

INCREASE THE COST OF AN IMPORTED GOOD A
COMPANY NEEDS TO MANUFACTURE ITS
PRODUCTS. RATHER THAN PAYING THE TARIFF,
THE COMPANY CAN LOOK FOR A DOMESTIC
SOURCE FOR THESE GOODS THAT IS CHEAPER
THAN THE IMPORTED GOOD. IF THEY CAN'T FIND
A DOMESTIC SOURCE, THEY WILL HAVE TO
PURCHASE THE MORE EXPENSIVE IMPORTED
GOODS. IN MANY CASES, THE COMPANY WILL
NEED TO PASS THE ADDITIONAL COST ON TO
THE CONSUMER IN THE FORM OF INCREASED
PRODUCT PRICES. THIS COULD REDUCE THE
COMPANY'S REVENUE IF SALES DECREASE
BECAUSE OF THE COMPANY'S HIGHER PRICES.
Thank You
For Your Attention