Elements of the micro environment of a Business entity
Elements of the micro environment of a Business entity
Here in this article we shall understand the components of internal environment which have a great implication on the daily operation of any organisation.
First of all, let's be clear on what the business environment is....
Business environment is all of the internal and external factors that affect and determine the existence of organisation. This includes employees, customers, management, supply and demand and business regulations. Examples includes how a business tends to meet the need of it's customers.
Broadly speaking, the business environment is classified into micro and macro environment.
Micro environment is the immediate periphery of an organization which influences its day to day business activities. Micro environment affects an organization regularly and directly. Developments in micro environment have direct impact on the workings of organizations. Micro environment includes company itself, its suppliers, Marketing intermediaries, customer market and competitor.
Then, what are the elements of micro business environment ??
Buyer/consumers: Customers who may or may not be consumers are the people who pay money to acquire organizational products and services. An organization to be successful, needs to find customers for its products.The company has to closely monitor and analyse the changes in the customer tastes and preferences and their buying habits. Organization should analyse the use of their goods and their acceptance by customer to sustain and growth in the competition. Products sales depend mainly on the degree of consumer satisfaction.
Employees and their union: Employees are the persons who create the roadmap for an organization and are the most important elements of micro environment. Individual employees and their labour unions jointly are important parts of the internal environment. If managed properly they help directly to achieve organizational goal. But ill-management of the workforce could lead to a catastrophic situation for the company.
Competitors: Competitors are the other business entities who compete for the same resource as well as the markets. Competition provides the correct shape to business. A study of the competitive scenario is essential for the company to get a knowledge of how the competitor is using its resources and the group of consumers it’s focusing on.
Market: The market is an extended form of customer and consumers. It provides a structure to organization working. The market is to be studied in terms of its actual potential size, its growth perspective and its attractiveness. The marketer should study the trends and development and the key success factors of the market.
Suppliers: The supplier provides raw material, equipment, services etc. A good relationship between the organization and the suppliers is vital for an organization to keep a steady follow of quality input materials. Supplier with their bargaining power affects the cost structure and determines the shape of an market.
Market Intermediaries: Intermediaries such as distributors, dealers and retailers are acts as a bridge between the organization and customers. Market intermediaries are either individuals or business houses who provide the facility to the company in promoting, selling and distributing the goods to the ultimate consumers.
So, these are the important components of a micro environment. Therefore, for an organization to be successful, they must pay attention to internal elements and impact of those elements on the performance of the organization .
