Companies thrive from competitive environments. A competitive environment is the external system which helps a business to function and compete. The Micro and Macro environments directly impact this.
An environment will become more competitive as more companies begin to offer that product or service, meaning that retailers need to do even more to keep their customers loyal. As the industry is always changing at an extremely fast rate companies need to be able to react with speed.
If a company doesn't react it could face losing customers and therefore will be 'beaten' by competitors.
A good way to think of this is when the Disability Discrimination Act 1995 was put into action. all companies had to make sure that they complied to the new legislation passed. Business would have faced fines, dissatisfaction and loss of customers if they had not made changes.
Customers with a disability may have chosen to visit another retailer that could cater to their needs in a better way.
This example shows the competitive nature (retailers needing to be the best at helping their customers) and how an external legal factor has influenced this competitive edge.
Macro
"A macro environment links to all the external factors that relate to a business and it's actions. The annoying thing for retailers is that they have no control over these factors. The macro environment leads on to effect the micro environment."