MICRO BUSINESS

ENVIRONMENT

BY:AKHILESH JHA,HARISH PRAJAPAT,LAXMAN PURI GOSWAMI,PARESH KUMAR UAPADHYAY,PIYUSH MALHARA.

What is Micro Environment?

Micro/Operating Environment: The environment which is close

to business and affects its capacity to work is known as Micro or

Operating Environment.

Micro environment factors have a direct impact on its business

operations and success.

These factors are controllable by the business firms.

COMPANY/ ORGANIZATION

SuppliersDistributors

Customers

Competition

Public

FACTORS OF MICRO BUSINESS

ENVIRONMENT

SUPPLIERSThey are the persons who supply raw material and required components to the company. They must be reliable and business must have multiple suppliers i.e. they should not depend upon only one supplier.

Example :In 2000 Ford's image was damaged when tires on its Explorer vehicles started exploding. These tires were produced by Bridgestone and the supplier ended up re-calling over 6.5 million tires.

Example :In 2007 Sony batteries in several Dell laptops caught fire which caused a terrible public relations issue for the computer manufacturer and led to over 4 million laptop batteries being recalled.

How suppliers affect business?

DISTRIBUTORSThey work as a link between business and final consumers. Distributors often getting products to the end customers can be a major issue for firms.

How disributors affect business? The distributors used will determine the final price of the product and how it is presented to the end customer. When selling via retailers, for example, the retailer has control over where the products are displayed, how they are priced and how much they are promoted in-store. You can also gain a competitive advantage by using changing distribution channels.

Example :Dell computers & Amazon have reduced costs by selling direct.

Example :Some firms such as Betterware and Avon have used alternative distribution channels to their competitors by selling door to door.

CUSTOMERSCustomers are regarded as the king of the market. Success of every business depends upon the level of their customer’s satisfaction. The firm's marketing plan should aim to attract and retain customers through products that meets their "wants and needs" and excellent customer service.

How customers affect business? Managers must monitor customer needs and try to anticipate how these will develop so that they can meet these requirements effectively now and in the future.

Example :The growth of the internet has enabled customers to search quickly for alternatives and compare deals more easily; this puts pressure on firms to provide better value for money or they will lose their customers.

PUBLICAny group who has actual interest in business enterprise is termed as public e.g. media and local public. They may be the users or non-users of the product.

Positive media attention can “make” an organisation (or its products) and negative media attention can “break” an organisation. Organisations need to mange the media so that the media help promote the positive things about the organisation and reduce the impact of a negative event on their reputation. Some organisations will even employ public relations (PR) consultants to help them manage a particular event or incident.

How public affect business?

COMPETITION Competition occurs when two or more organisations act independently to supply their products to the same group of consumers. Every move of the competitors affects the business. Business has to adjust itself according to the strategies of the Competitors.

Businesses are strongly affected by competition:In competitive markets where there are many firms providing similar products customers have more choice; this may put downward pressure on prices and means that excellent customer service is essential. Example: Nokia mobile phones.If a business is unaware of its competitor's activities they will find it very difficult to “beat” their competitors.

How competition affect business?