Upon running a business there are two forces upon which companies enacts their strategies and policies in accordance to. One of which is the microenvironment. According to businessdictionary.com, these are the factors or elements in an organization's immediate area of operations that affects its performance and decision-making freedom. These factors include competitors, customers, distribution channels, suppliers and the general public. These are those which into some extent are internal to the organization. In my understanding, these are the factors which the organization has some degree of control. These factors are those which the organization can implement strategies that may somehow influence them. These factors are those which the company can address to easier as they are smaller in comparison to the macroenvironment which has more influencing factors to which the company has no control.
The second force through which organizations enact strategies in accordance to is the macroenvironment. This comprises of players that are much vast that the preceeding ones. These are external in nature and are the ones which organizations has no control and has no choice but to act in appropriation to these. These factors are those which may greatly affect the course of business in the long run. Accoring to businessdictionary.com, these factors include the economic factors; demographics; legal, political and social conditions; technological changes; and natural forces. In my opinion, these factors are of the same importance with the microenvironment but, I think, these factors are harder to address and may pose bigger threat to the course of not only the business but the whole industry.
If I would choose which of the two to prioritize, I think, I would prefer to first settle the microenvironment of my business. It's not that macroenvironment is not important, it's just that for me an organization is like a person, it is better to fix up things within your control first. It's like creating a positive mindset in a person in order to invite positivity into your lives. In relation to business and competitiveness, in my opinion, if a company has a well founded stand within their microenvironment, it would be easier for them to address the needs and demands of the macroenvironment. Having a strong hold in the microenvironment would, as well, allow an organization to have enough resources to support their actions in accordance to the changes in the macroenvironment like when there are economical changes that may occur, the technological changes in the said environment, the new laws and regulations imposed that may affect the course of the business and the likes. An example, for me, is when a company has dominated an industry with an established brand name and holds majority of the share in the industry it dwells in and an economic problem occurs. I think this company would have a better chance of survival compared to other companies in the industry due to advantages with the resources the company was able to stack with the help of their well settled microenvironment.
To conclude this, in my opinion, between the two forces that affects an organization's performance, the microenvironment is more important as this, as well, is the one which the company have some degree of control and as I have said, as well, for me an organization is much like a person, upon creating peace within yourself, peace and positivity on your environment would follow.
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