The close link between both economic theories Students in an executive MBA program should therefore take a very close look at how each research study has been developed. An examination of 7,000 economics studies, outlined in the Economic Journal, found that nearly 90% of them used sample sizes that were too small, and thus cast doubt on the efficacy of the findings. Microeconomic analysis is also subject to interpretation. These are key considerations that give a more direct forecast of business performance. A noted increase in the cost of living in a particular city could also have a negative impact on sales in that region. Microeconomic analysis could discover a potential gap in the market for your target customer base, such as the potential to target more young professionals or retirees. One of the key considerations is supply and demand. Rather than focusing on the economy in its entirety, this type of analysis focuses on the behavior and performance of specific customer groups, industries, or geographical areas. If macroeconomics relates to top-down factors, then microeconomics is about looking at business from a bottom-up perspective. Entrepreneurs pay close attention to political, economic or social changes, which could result in the discovery of potentially profitable markets around the world.Ĭommon microeconomic factors to consider after an executive MBA program ![]() Macroeconomic factors are particularly crucial for multinational companies. An increase in the minimum wage could lead to decreased profits, while decreasing tariffs with external markets could end up boosting some businesses. However, there is certainly merit for graduates of executive MBA courses to consider some of these issues. Opinion is divided over the relevance of macroeconomic factors in an average business setting. These factors are often politically influenced, because they can be dictated by changes to economic policy. This could include a country’s employment rate, Gross Domestic Product (GDP), inflation or banking interest rates. In a business context it has become associated with the study of broad economic factors, including national statistics. ‘Macro’ derives from Greek and means ‘large’. ![]() Macroeconomics focus on ‘top-down’ factors that affect businesses ![]() Here’s how they’re applied in business to ensure profit growth. The terms macro and microeconomics may not be used specifically in the workplace, but they are indirectly crucial to every business decision. For instance, statistics may reveal that overall sales through smartphone apps are increasing, but it’s up to businesses to decide what to do with that information. Analysis of these variables is open to interpretation. This wide array of factors is commonly sub-divided into micro and macroeconomics. These could include the disposable income levels of your customer base, the cost of transportation, or even loan interest rates. As responsibility grows during a career in business, it becomes increasingly important for executives to consider and react to the economic factors that dictate performance.
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