The influence of macroeconomic conditions on market participants Essay

The influence of macroeconomic conditions on market participants - Essay Example This paper outlines the importance of the macroeconomic factors recognition during planning of the economic activity of any company. None of the companies is able to control them, yet these factors may hamper or facilitate the business activities of many companies and the stability of the market in which the company operates in. Economic factors play an important role in decision-making process of each company. The company should certainly try to improve its technological facilities, management procedures and financial operations but the successful activity in micro-environment can be sustained only if the company reacts quickly to macroeconomic factors and adapts its policy accordingly. The marketing strategy will fail if such factors as interest rates, level of unemployment, legal social and demographic factors are not taken into account, as none of the companies is able to operate in environment and outside it. Current political conditions as well as level of corruption might influence the decision making process as well. One of the most important factors that affects the business activities of companies is the purchasing power. If the purchasing power is low, as it is in less developed countries, then the company is not able to sell expensive products or the level of sales may be lower than expected one. The level of unemployment should be taken into account in developing of the marketing strategy of the company. High level of unemployment usually leads to the decrease in the production of luxury goods (such as expensive cars, refrigerators and other home appliances). Past incomes, earned by the persons who are retired should be taken into account in devising of the marketing strategy as well.