Micro and macro environmental factors are those variables that lie within and outside the industry. They can affect the performance and production of any organization. All these factors should be considered and addressed properly by the superior management to run a smooth business while maintaining a peaceful internal and external environment of the organization.
Micro Environmental Factors
Consumer behavior factors include norms, lifestyle, and the demographic and cultural practices of the target consumers. Being a fashion icon of the fashion industry, Michael Kor needs to update their clothing trends up to the mark and consider the local market fashion trends or choices. That is why the study of cultural norms and lifestyle helps tremendously in guiding the production of fashion products.
Employees are the most significant microenvironmental factor that greatly affects the progress of an organization. In the case of a fashion organization, it is important that the employees know all fashion trends and changes consumer choices. In addition, the communication and coordination among employees should excel in carrying out different tasks. The company should establish employee-friendly strategies to promote devotion and loyalty among their workers. Only then could they work towards organizational goals and achieve and maintain their status in the fashion and business industries.
Manufacturers have to rely on distributors and material suppliers to distribute and sell their products in the market. As a result, a good relationship between supply chain management and distributors is necessary. This will help the company increasing its sales and its footprint in the market.
Stakeholders and Shareholders
Stakeholders and shareholders are the main investors in the organization and are responsible for advising strategies for a company to grow up. Involving shareholders in decision-making is important as policies set by them will greatly influence how the company operates and affects profitability. Our company should involve stakeholders and shareholders in order to develop a better relationship.
Macro Environmental Factors
Technological factors refer to the resources and means necessary to meet the organization’s demand and production. For example, if the company is dealing in leather products, it should have access to enough leather resources to meet the customers’ demand. The scarcity of resources may lead to high pricing or less demand for the product. Also, incorporating the latest technology is important because the growing fashion industry is also resulting in high competition. Therefore, organizations should invest in technology to meet the pace of the fast demanding market. As described above our company should introduce new technology in order to become a tough competition to their rivals.
Legal and Political Factors
Changing political and legal environments can also negatively impact a business like our example, the fashion industry. Therefore, our fashion company must ensure that the labor rights are fulfilled. Similarly, if any factors change, our labor force’s integrity and labor laws should not be affected.
Economic fluctuations can also impact the progress of a business. Looking again to the fashion industry, stable and good economic conditions allow consumers to spend more disposable income on luxury goods. However, inflation or a recession can negatively affect the sales of these fashion products. So, it must be ensured that the product or brand’s price should be lower to compete with the challenges of the economics within a respective country.
Media and the General Public
As observed by media and the general public, the appearance of the enterprise can greatly affect ongoing business and employee behavior. Michael Kors makes a strong relationship with different media cells because they are capable of representing the brand in both good and bad ways. Understanding how media can influence the opinions of consumers is vital to every aspect of the production chain.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.