How Macro Environmental Changes Affects Business?

Macro environmental factors usually include inflation, unemployment, literacy, energy consumption, population, GDP growth etc. Almost all of the Macro environmental factors affect businesses. I will explain it with some examples. Demographics and the size of population can always impact the businesses like the companies which operate in the region of large population have more opportunities to expand their businesses(as more target customers). Similarly, with the increase in the inflation, the prices of the raw materials increase and companies have to increase the prices of the finished goods. Furthermore, if there is high literacy in the economy then the company finds it more convenient to find skilled and literate people. This means that Macro environmental factors can impact the activities of the businesses both positively as well as negatively.

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