Science

Difference between micro environment (internal) and macro environment (external)

Main difference

The business environment is an essential environment for the different business purposes of companies and organizations. An organization cannot prosper outside of the business environment. An organization that works in isolation suffers from different factors and elements of the business environment are missing. There are two types of business environments; macroenvironment and microenvironment; they are distinguished from each other by contact with business organizations and their influence. As we know that micro means small, the microenvironment refers to the business environment which is quite specific since it is the direct contact with the particular business.On the other hand, as we know that macro means large, the macro environment refers to the business environment to larger scale, which has no direct contact or direct influence on the specific business. The microenvironment is more specific, since it is part of the elements that are in direct contact with companies (businesses). Contrary to this, the macro environment is general and has an indirect impact on each of the commercial entities.

Comparative chart

Micro environment (internal) Macro environment (external)
Refer The microenvironment refers to the business environment that is quite specific, as it is the direct contact with the particular business. Macro means big; The macroenvironment refers to the larger-scale business environment, which has no direct contact or direct influence on the specific business.
Effect It directly affects the specific group or the company. It affects each and every one of the commercial entities, not any one in particular.
Also know as Internal environment External environment
Elements Competitors, suppliers, own organization, market, intermediaries. Population and demographic, economic, sociocultural, technological, legal and political and environmental.
What is the micro (internal) environment?

The microenvironment is the business environment in which corporations are in direct contact and has a direct influence on the business entity. The microenvironment is also known as the internal environment; It is made up of elements such as competitors, suppliers, the organization itself, the market, and intermediaries. It has a more specific implication, as it has a direct effect on the specific business entity. Microenvironment factors or elements are also specific in nature, so they can be easily controlled. In other words, we can say that the microenvironment is the type of business environment that a company is surrounded by, this type of environment has a direct and regular effect on the business entity. The study or analysis carried out on the microenvironment is called COSMIC analysis (acronym derived from the name of the elements of the microenvironment). The suppliers, in this case, are the ones who provide the raw materials and other raw materials to the company so that it can manufacture the useful products. And the other important element of this environment is a competitor; which refers to the firms and companies in the market that offer the substitute or quasi substitute products and try to gain more market share in sales.

What is the macro (external) environment?

The macro environment is the business environment that does not surround commercial companies, but has a direct influence on each of the entities. As we know that macro means large, in this type of business environment, factors and elements are studied on a global or larger scale, which does not affect the specific business but rather all businesses. In a more compact way, we can say that in this case, it may happen that one business entity may have a positive effect and the other may suffer. The macro environment is also called the external environment, as it does not surround business entities. Population and demographic, economic, sociocultural, technological, legal and political and environmental are the elements of this business environment, and the study of the environment on this basis is called PESTLE Analysis.

Micro environment (internal) vs. macro environment (external)
  • The microenvironment refers to the business environment that is quite specific, as it is the direct contact with the particular business. On the other hand, as we know that macro means large, the macro environment refers to the larger scale business environment, which has no direct contact or direct influence on the specific business.
  • The microenvironment has a direct effect on the particular business entity, while the macroenvironment has an indirect effect on each of the business entities.
  • The microenvironment is also known as the internal environment, while the macroenvironment is known as the external environment.
  • The microenvironment includes elements such as competitors, suppliers, the organization itself, the market, and intermediaries. Population and demographic, economic, sociocultural, technological, legal and political and environmental are the elements of the macroenvironment.

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