Question
Distinguish between micro and macro environment. Why should an international business firm monitor the foreign country's trade, monetary and balance of payments account? Discuss with examples
Answer :
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Skip in 10
The business environment consists of all external and internal factors that influence a company’s operations, decision-making, and performance. In the context of international business, the environment is broadly divided into micro and macro environments. The micro environment refers to the immediate factors that directly affect a firm’s ability to operate and serve its customers. These include suppliers, customers, competitors, distributors, and intermediaries. For instance, a multinational company like Apple depends on component suppliers in China, logistics providers, and local retailers in different countries. Any change in these micro-level factors, such as supplier delays, new competitors entering the market, or shifts in customer preferences, directly affects the company’s operations and profitability.
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