micro environment short essay

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35 Micro Environmental Analysis Examples

🔝 top-10 micro environmental analysis examples, 🤔 what is micro environment in business, 📊 what are micro environmental factors, 🔎 what is a micro environment analysis, 🔧 micro environment analysis tools, 💡 essay ideas on micro environmental analysis.

Today, several internal and external factors come into play to drive sustainable growth for businesses. It takes seamless coordination and implementation between these elements to nurture the future development of a company.

Micro environmental analysis refers to internal factors like employees, customers, suppliers, shareholders, and competitors that lead to failure or success. Keep reading to learn more about it and find some excellent micro environment essay examples.

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Micro environment pinpoints an organizational environment that can directly influence day-to-day operations. It involves several internal forces that can lead to the success or failure of a company. Depending on the organizational issue, these internal factors are unique in nature. In fact, they can impact the company’s performance potential over time. 

In a competitive landscape, companies face a lot of challenges, and things get more complicated when internal micro environmental elements are distinctive.

Macro Vs. Micro Environment

Suppliers can impact a company’s delivery network and customer value . Their reliability determines whether or not the business can maintain smooth operations. Typically, managers have to exercise full control over suppliers’ costs and availability. If the supply shortages and expenses are under control, the company won’t have to deal with customer dissatisfaction and decreased sales.

The Company

When reviewing micro environmental factors, it is crucial to consider top management, HR, finance, accounting, and research and development departments . There’s no rocket science – managers have to collaborate and bring stakeholders on the same page to make informed decisions and follow strategic plans.

Competitors

Competitors or rivals propel companies to improve their customer satisfaction and overall value. Businesses have to meet customers’ increasing demands and expectations to maintain a competitive edge in the market.

Marketing Intermediaries

In a standard value delivery network, marketing intermediaries play a crucial role for any company. Middlemen like merchants or agents help businesses find potential customers, whereas physical distribution entities like transportation and warehouses assist companies in stocking and moving goods.

In a company’s micro environment, customers are the most valuable actors. Companies need a solid value delivery system to engage customers and build long-term relationships to drive growth. Customer markets can include business, reseller, government, international, and consumer markets .

General Public

The general public is a potential group interested in the product or service offered by the company. The company can lose the general public’s interest if business offerings are not purposeful.

From a company’s perspective, the public falls into several categories:

• media public,
• citizen-action public,
• financial public,
• local public,
• general public,
• internal public.

A micro environment includes elements within a unique organizational environment. Micro doesn’t translate into a minor task or factor. It hints at one or more problems within a company and how often they can affect organizational growth .

Look at a micro environment analysis through the lens of the company rather than the industry. Technically, micro environment analysis refers to reviewed internal forces of a micro environment. It can be about the competitor, market, stakeholder, or supplier analyses.

A SWOT analysis is one of the most effective micro environment analysis tools. It helps you understand the strengths , opportunities , weaknesses , and threats of each internal force. You can use this method to paint a full picture of all internal elements that can influence the growth and performance of your business. SWOT analysis can work as a direct indicator to assess different organizational areas and determine if there’s been an improvement. An in-depth SWOT analysis helps organizations tackle challenges, threats, and avail opportunities.

Porter’s 5 Forces

Porter’s Five Forces refer to a model to review five key competitive factors that apply to all industries. This model makes it easier to spot the pros and cons of an industry. It includes the following:

• Competitive rivalry in the same industry
• Substitute threat of a product or service
• The bargaining influence of customers
• The bargaining influence of suppliers
• The potential threat of new players in the market

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Micro and Macro Environment Essay Sample

Micro and macro environment are the two elements within the external marketing environment that surrounds and affects organization’s operations. However, these factors are out of control of the marketing company but still influence the decision-making process while creating the strategic marketing plan.

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In this essay sample, we are going to discuss the definition of both the environment, the difference between them, and their factors that affect the organizational goals with an example of Nestle and McDonald and how they improve their products and services considering some factors as the vital part of their success.

Definition of Microenvironment

Microenvironment is defined as the collection of factors that are in direct contact with the business organization which affects the routine activities and practices of the business. These forces have a major impact on the performance of the company and are associated with the company functions and day to day operations but for the short period of time.

Its elements include suppliers, competitors, marketing intermediaries, customers and the firm itself. Thus, the company’s ability to provide services to its customers is managed by controlling or regulating micro environmental factors to some extent.

Porter’s five forces is the tool that can help to analyse the external micro environment. Now, let’s discuss briefly about the micro environmental factors that affects as the external influence on the potential competition within the industry that determines how much profit a firm can earn.

Micro Environment Factors

• Suppliers: Suppliers can hold the power to decide the success and the failure of the business. They can control supply of the products that influence the revenue of the business company. However, suppliers have the power if they are the largest supplier of the goods. The supplier’s products are the vital part of the buyer’s finished product. Lack of supply can harm the consumer’s loyalty and rise in the supply expenses can change the organizational deals.
• Intermediaries: If the products of the company are given in the hands of 3 rd party or resellers or market intermediaries such as retailers, wholesalers etc, they can circulate and offer the products to the purchasers. The performance of the intermediaries can impact the overall success of the business. Thus, intermediaries or resellers must help the organization to deliver their products from its starting point to the destination.
• Customers: Knowing the customers and their needs can play a major role in impacting the growth of the business. The reasons of the customers for buying your products must be evaluated to create the best marketing strategy based on the products and services.
• Competitors: The competitors who sell the similar products and services as your must be considered as the micro environment factor that can influence the business. The market value and competition should be analyzed and the way your competitors sell their products must be taken into account. You as a business should ask how your prices and products can differ from others in order to reap the better results. Also, how your services can satisfy the needs of the public in the market with many options.

Define Macro Environment

Macro environment is defined as the general environment within the economy that impacts the decision making, performance, strategy and working of all the business organizations at the same time. This environment is considered as the dynamic in nature and therefore constantly changing.

This comprises some of the external forces that are outside the control of the business but can have a powerful impact on the company’s functions. It encompasses the individuals, groups, organizations, agencies and others with which a company have a connection and deals.

The study of macro environment can be done with the help of Pestle Analysis. Now, let’s dive into the factors of macro environment that plays huge role in the success of the business if handled precisely.

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Macro Environment Factors

• Demographic forces: The demographic factors include the factors such as country, age, household lifestyle, cultural characteristics, ethnicity and education level that impacts different market segments.
• Economic factors:  The economic environment factors can influence both company’s production and consumer’s decision making process. Let’s take an example of McDonald where nature of economic system of the country and economic policies of their government can make a big difference in the performance of the company.
• Natural/physical forces : Natural forces includes both renewable  and non-renewable resources that may also impact the organization production and growth. Thus, factors like forests, agricultural products, oil, coal, minerals and more must be taken into account.
• Technological factors:  To make the organization production and operations run smoothly, the technology, skills and materials must be taken into account that have a huge impact of the success of thee company. For example, McDonald also offers some technological services in some countries where customers can make their own burgers.

The food industries like nestle, dominos etc has incorporated more advance technologies in order to make their products more healthier, fresher and of different varieties. Technology has also enabled companies to make better packaging to increase the efficiency and reduce the costs of the products.

• Political forces:  The political factors include political stability and foreign policies created by political organizations of the country which have a huge influence on the business. Thus, sound marketing strategies and decisions always include political forces for the constant development of the organizations.

Globalization is also one of the major political factors that can have an influence on the global companies. For example, Nestle is a global company in the food and beverage industry. Nestle vice president explained how globalization has impacted their business initially until they made global marketing strategy to react for their global market in different countries. Also, another impact was the impact of regulations. Therefore, nestle had to face multiple tiers of regulations which affected their production of the products.

• Social and cultural forces:  The impact of your services and products on the society must be observed and examined. Any element that is taken as harmful for the society must be eliminated to create responsible organization with their mentioned goals and visions. Thus, company’s now bring the review or feedback system in their services to ensure they are providing environmentally friendly services in the society.

Now, customers are more interested in the addictive free products that are made up of natural ingredients. Thus, for example, Nestle is aware of this change and started to make their products like magi soups more natural and in accordance with the specific countries flavours and textures to meet local taste in their products.

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Difference between Micro ad Macro Environment

Role of SWOT analysis to measure the impact of micro and macro environment

The SWOT analysis method is helpful in understanding and measuring the micro and macro environmental factors effectively. The SWOT stands for Strength, Weakness, Opportunity and Threats. The former two are internal factors while the latter two are the external factors and not under the company’s control.

The Strengths can be evaluated by asking yourself what you are good at, what value your service or products can bring into market, how difference you can make and so on. However, Weaknesses can assess by evaluating the dependency on the services on outside vendors which needs to be improved.

Opportunities can be related to the extent of the favourable conditions that company have to make use of in order to improve their position in the competitive market. Whereas, Threats includes political, economic, customer trends, debts and costs as the external factors that cannot be controlled but can be accepted.

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Micro Environment of Business: Definition, Elements, and Strategy To Adapt

Table of Contents

What is Micro Environment?

The micro environment of a business is like its immediate neighborhood, where all the important interactions happen. It’s the group of people and factors that directly affect how the company works and makes decisions every day.

This close-knit environment includes customers who buy products, suppliers who provide materials, competitors who challenge, and even the opinions of the public. Understanding the micro environment is crucial because it helps a business see what’s happening right around it.

It’s like having a clear view of the road ahead. By looking closely at these factors, a company can spot opportunities, manage risks, and plan its moves wisely.

Just like a restaurant’s regular customers shape its menu, the micro-environment shapes a business’s path to success.

As such, the microenvironment is the circle of influence that surrounds a business and guides its steps in the world of business.

Elements of Micro Environment

The microenvironment of a business comprises a diverse array of elements, each with its own distinct role and impact. The elements/examples of the micro environment of business consist of the following:

These are the individuals or organizations that purchase a business’s products or services. Customer preferences, needs, and demands directly influence a company’s strategies and sales.

Understanding and meeting customer expectations is essential for sustained success.

Related : External Environment of Business

Competitors

Rival organizations that offer similar products or services in the same market.

Competition drives businesses to innovate, improve quality, and differentiate themselves to gain a competitive edge. Monitoring competitors’ moves helps companies stay ahead.

Suppliers provide the necessary raw materials, components, or resources for a business’s operations.

The reliability, cost, and availability of suppliers can impact production efficiency and overall business performance.

Intermediaries

These are middlemen who facilitate the distribution of a company’s products or services to customers. Retailers, wholesalers, and online platforms connect businesses with their target audience, affecting reach and sales.

Business partners collaborate with a company to achieve shared goals.

Partnerships can bring access to new markets, resources, and expertise, enhancing a company’s competitive advantage.

The general public’s perception and opinion about a company can influence its reputation and image.

Positive public sentiment can lead to customer trust and loyalty, while negative sentiment can harm a business’s brand.

Media outlets play a significant role in shaping public perception.

Positive media coverage can enhance a company’s visibility and credibility, while negative coverage can lead to reputational challenges.

Financial Institutions

Banks and financial institutions provide funding, credit, and financial services crucial for a business’s operations and growth. Access to capital and favorable financial terms can impact a company’s financial health.

The workforce is a key component of the microenvironment.

Employee morale, skills , and dedication directly affect productivity, customer service, and overall business success.

Also Read: Diversity in the Workplace

Stakeholders

Individuals or groups with a vested interest in a company’s operations, including shareholders, investors, and regulatory bodies

Stakeholder expectations and demands can influence a company’s decisions and long-term strategies.

How Does Micro Environment Affect Business Operations?

Just like friends and family influence our daily decisions, a business’s microenvironment affects its choices. Think of customers as the people a business wants to make happy.

Competitors are like friendly rivals, pushing the business to be better. Suppliers provide the tools needed for work, and partners offer extra support. Public opinion and media stories can change how others see the business.

Employees are the heart, and stakeholders are the cheerleaders. All these factors together shape how a business works and grows.

Related : Internal Environment of Business

How To Adapt To the Micro Environment of Business?

Adapting to the microenvironment means building strong relationships with these key players of the micro environment.

Here are the 5 strategies to help you to adapt to this environment.

Listening to Customers

Just like a good friend listens and understands your needs, a business must pay attention to its customers. By gathering feedback and insights, the business can tailor its products and services to make customers happy.

Staying Ahead of Competitors

Imagine a friendly game where you try to outperform your buddies.

Similarly, a business must keep an eye on its competitors. This helps the business stay innovative, offer better deals, and attract more customers.

Building Strong Supplier Relationships

Suppliers are like reliable partners providing tools for success.

By maintaining strong relationships, a business ensures a steady supply of resources, timely deliveries, and even favorable terms that can impact costs and quality.

Collaborating with Intermediaries

Just as you might ask a friend to introduce you to others, businesses work with intermediaries like retailers or distributors.

These intermediaries help the business reach a wider audience and ensure products are available where customers need them.

Engaging with Employees and Stakeholders

In a close-knit group, everyone’s contribution matters. Businesses engage with employees and stakeholders through clear communication, involving them in decisions, and recognizing their efforts.

Happy employees create a positive environment, while stakeholders’ support can fuel growth.

Difference Between Micro and Macro Environments of Business

Micro environment is like your immediate circle of friends and family, directly impacting your daily life. It involves factors close to a business, such as customers, competitors, and suppliers, influencing day-to-day operations.

The macro-environment, on the other hand, is like the broader society you’re part of.

It involves big forces like economic trends, political decisions, and cultural shifts that impact the overall business environment.

The key differences lie in scale – micro is small and immediate, while macro is large and encompassing.

Also, micro factors are controllable to some extent, and macro factors are usually beyond direct control.

Read Next: Internal Vs. External Environment of Business

Sujan Chaudhary is a BBA  graduate. He loves to share his business knowledge with the rest of the world. While not writing, he will be found reading and exploring the world.

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Micro Environment, Characteristics, Components, Benefits, Challenges

Micro Environment refers to the immediate factors directly influencing a business’s operations and performance within its specific industry. It consists of elements that are closely connected to the company and over which it generally has a greater degree of control. Key components of the micro environment include customers, suppliers, competitors, employees, and distributors. Additionally, it encompasses stakeholders like investors and shareholders. Each of these groups directly impacts a company’s daily activities and strategic decisions. Understanding the micro environment is crucial for a business to effectively manage its relationships, meet customer needs, stay competitive, and optimize operational efficiency. This close environment plays a pivotal role in shaping the organization’s ability to achieve its objectives and thrive in the market.

Characteristics of Micro Environment:

Direct Impact :

Micro environment has a direct and immediate impact on the daily operations of a business. The actions and changes within this environment are felt directly by the company and can influence its performance and decision-making processes.

• Controllability :

Unlike the macro environment, elements within the micro environment are more controllable. Businesses can often influence or negotiate terms with stakeholders like suppliers, customers, and employees to some extent.

• Proximity :

The elements of the micro environment are close to the business. This includes internal factors and external entities like suppliers and customers who interact directly with the company.

• Interdependence :

There is a high level of interdependence within the micro environment. The success of a business can depend on its relationships with suppliers, customers, competitors, and other stakeholders who are part of this environment.

Small Number :

Micro environment consists of a smaller number of factors compared to the macro environment. This limited number allows businesses to focus more specifically on managing these relationships and influences.

Dynamic Nature :

While it is more controllable, the micro environment is still dynamic. Relationships and conditions can change due to various factors such as market competition, supplier prices, and consumer preferences.

Varies from Business to Business :

Micro environment is unique to each company. For example, a business’s specific competitors, suppliers, and customers are unique and differ from those of another company, even within the same industry.

Influence on Competitive Advantage :

Elements within the micro environment can significantly influence a business’s competitive position. Effective management of relationships with customers, suppliers, and employees can lead to a sustainable competitive advantage.

Components of Micro Environment:

• Customers :

Customers are the central component of the micro environment as they determine the demand for the company’s products or services. Understanding customer needs, preferences, behaviors, and purchasing patterns is crucial for tailoring offerings and marketing strategies.

• Suppliers :

Suppliers provide the necessary resources needed to produce goods and services. Their reliability, pricing, and quality of supplies directly affect the company’s operational efficiency and product quality.

• Competitors :

Competitors influence how a company positions itself in the market. Understanding competitive actions, strategies, strengths, and weaknesses helps a business to differentiate itself and potentially capitalize on competitors’ shortcomings.

• Employees :

Employees are a critical asset to any organization. Their skills, attitudes, and general performance directly influence business outcomes. Effective recruitment, training, and retention strategies are vital for maintaining a productive workforce.

Distributors and Intermediaries :

These entities help in delivering the products from the company to the customers. Their efficiency and effectiveness in logistics and distribution impact customer satisfaction and product availability.

Shareholders and Investors :

These financial stakeholders are concerned with the performance and profitability of the company. They influence major business decisions and strategies with their expectations and demands for financial returns.

Media plays a significant role in shaping public perception and can influence customer decisions and market reputation. Managing media relationships is crucial for maintaining a positive public image.

Benefits of Micro Environment:

Enhanced Customer Insights :

Close interaction with customers within the micro environment allows businesses to gather detailed insights about customer preferences and behaviors. This knowledge enables more targeted marketing strategies and product development that resonate with the market, leading to increased customer satisfaction and loyalty.

Supplier Collaboration :

Building strong relationships with suppliers can lead to better terms of trade, reliable supply chains, and the potential for collaborative innovation in products and processes. Such partnerships often result in cost efficiencies and improved product quality.

Competitive Agility :

Understanding and reacting to competitive dynamics within the micro environment allows businesses to be more agile. This can lead to quicker adaptation to market changes, effective counter-strategies against competitors’ actions, and the ability to capitalize on competitors’ weaknesses.

Employee Engagement :

A positive internal environment fosters employee motivation and engagement. Engaged employees are more productive, provide better customer service, and contribute innovatively to the company’s goals, driving overall business performance.

Operational Control :

Since elements of the micro environment like suppliers, customers, and competitors are closely linked to the business, companies often have more control and can exert greater influence over these elements than over factors in the macro environment.

Market Expansion Opportunities :

Strong customer relationships and a deep understanding of current market dynamics can help identify new opportunities for market expansion and diversification. This could involve introducing new products, entering new geographic markets, or expanding through partnerships and collaborations.

Risk Management :

Being actively engaged in the micro environment allows businesses to better anticipate and manage risks associated with suppliers, customers, and competitive threats. Proactive risk management can prevent losses and safeguard the company’s assets and reputation.

Challenges of Micro Environment:

Supplier Dependence :

Relying on specific suppliers for essential raw materials or components can be risky. Issues such as supply disruptions, increased costs, or quality problems can significantly impact production and overall business operations.

Customer Dynamics :

Changes in customer preferences and behaviors can be abrupt and difficult to predict. Keeping up with these shifts requires agility and responsiveness, which can strain resources and demand constant innovation and adaptation.

Intense Competition :

In many industries, the competitive landscape is extremely intense, with many players fighting for market share. This can lead to price wars, increased marketing costs, and the need for continuous differentiation to maintain a competitive edge.

Managing Relationships :

Building and maintaining strong relationships with stakeholders such as suppliers, customers, and distributors is crucial but challenging. Mismanagement of these relationships can lead to conflicts and can negatively affect business operations.

Talent Management :

Attracting and retaining skilled employees is vital for any business’s success. The challenge increases with a competitive job market and the need for specialized skills, making human resource management a critical component of the micro environment.

Innovation Pressure :

With rapid technological advancements and shifting consumer expectations, there is constant pressure on businesses to innovate. Staying relevant requires significant investment in research and development, which can be a substantial challenge, particularly for smaller businesses.

Regulatory Compliance :

p style=”text-align: justify;”> Even at the micro level, businesses must comply with industry-specific regulations and standards. Navigating and adhering to these regulations can be costly and complex, especially for businesses operating in highly regulated sectors like healthcare or finance.

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Business Jargons

A Business Encyclopedia

Micro Environment

Definition : Micro Environment, refers to the environment comprising of all the actors of an organization’s immediate environment which influences the performance of the company, as they have a direct bearing on the firm’s regular business operations.

The micro environment is popularly referred to as task environment or operating environment.

Elements of Micro Environment

The elements of the micro environment are closely associated with the company and they do not affect all the companies operating in the industry, in a similar manner, as some factors are specific to the firm.

So we can say that the micro environment is one which the firm addresses in its specific arena, such as the industry or the strategic group.

Competitors

Competition is what keeps the firm thriving. Competitors are the rival sellers operating in the same industry. It must be noted that the nature and intensity of competition highly influence the firm’s products and services. Product Differentiation is something that helps the firm to beat the cut-throat competition in the market.

For a firm to survive competition it is required to keep a close watch on the competitors (both existing and potential) future moves and actions, so as to prepare in advance, as well as to predict the response of competitors to company’s moves. Moreover, competitor analysis also helps in maintaining or improving market share and position.

Suppliers are the one who provides inputs such as material, components, labour and other stock of goods to the firm, which is required to undertake manufacturing activities. when there is uncertainty as to the supply constraints, it usually builds pressure on the firms and they are required to maintain high inventories, which leads to cost increases.

Suppliers have the power to change the firm’s position in the market and its capabilities.

The relationship amidst the firm and its suppliers represents a power equation, based on the industry conditions and their dependence on each other.

The success of the organization greatly depends on how effectively the firm fulfils the needs and wants of the customers, which is profitable to the firm and also provides value to the customer. The firm needs to analyze what the customers expect from their products and services so that the firm can satisfy them.

It must be noted that without customers no business can survive for a long time. So, the primary objective of the firm is to create and retain customers, to keep itself going.

Intermediaries

Intermediaries refer to marketing intermediaries which cover agents, merchants, distributors, dealers, wholesalers, etc. that participate in the company’s supply chain, in stocking and transporting the goods from their source location to their destination.

It acts as a link between the business organization and the ultimate consumer.

Shareholders

Shareholders are the real owners of the company who invest their money in the company’s business, by purchasing the shares, for which they are paid a dividend every year as a return. Shareholders have the right to vote in the company’s general meeting.

Placing the right person at the right job and retaining them for the long term by keeping the staff motivated is very important for the strategic planning process. Training and development act as a guide to the firm’s employees which ensures an up-to-date workforce.

A qualified and competent workforce can help the firm to achieve success with little efforts.

We all know the power of media these days, it can make or break an organization or its products/services overnight.

Management of media whether electronic media, press media or social media is really important not just to create a positive and clean image of the company and its products in front of the audience but also to support the firm in building a good reputation in the market. The right use of media can do wonders for the company and boost its sales.

When the firm competes with the firm operating in the same industry, with the same micro environmental factors, the relative success of the company is based on the relative effectiveness of the company in dealing with these factors.

Related terms:

• Monopolistic Competition
• Porter’s Five Forces Model
• Business Environment
• Internal Environment
• Macro Environment

Reader Interactions

Kwanele says

April 24, 2021 at 6:43 pm

Who is the author of this article and when was it published?

Surbhi S says

April 26, 2021 at 9:39 am

The author of this article is Surbhi S. and it was published on Feb 14, 2020

Jorge Morais Diamantino says

November 6, 2021 at 8:12 pm

THANKS FOR THIS

February 6, 2023 at 8:30 pm

Thank you very much!

harry machamanda says

January 31, 2022 at 3:21 am

great explanation

Heather Mpala says

November 3, 2022 at 2:02 pm

Thank you for helping us understand business jargons

sema crist says

November 23, 2022 at 2:04 pm

Sodia Saunta says

August 18, 2023 at 8:19 am

I like this video

m.dokata says

November 17, 2023 at 12:50 pm

thank you for great support keep it up

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Micro Environment Definition, Factors & Example

The micro environment in marketing includes all those micro factors that affect business strategy, decision making and performance. It is vital for business success to conduct macro environment and micro environment analysis before decision-making process. Macro environment f actors  include political, economic, social, technological, and legal factors. On the other hand, company micro environment factors include customers, suppliers, competitors, employees, shareholders and media.

Table of Contents

How Micro Environment Affect Business Decisions

Mostly, in the marketing environment, micro factors do not affect all the businesses in the industry in the same manner. The reason is that every business is different in size, capacity, financial resources, human resources and overall strategies.

For example, competitors affect the business decision-making process. MacBook Pro is a well-known brand of Apple Inc. Dell XPS 13 and HP Spectre 13 Laptops are giving Apple Inc. a tough time and certainly affect its decision making. Apple is already introduced a functional keys touch bar. It is possible that Apple Inc. introduces MacBook Pro with Intel Coffee Lake Processor in mid 2018 to compete with its rivals and sustain the customer base.

Examples of Micro Environment Factors Affect Business

The customers are the central part of any business as they tend to attract and retain most of the customers to generate revenue. Therefore, organizations must adopt a marketing strategy that attracts the potential customers and retains the existing customers by taking into consideration the wants and needs of customers and by providing the after sales services and value-added services.

Competitors

The competitors of an organization can have a direct impact on business strategies. The organization must know how to do a competitive analysis of competitors and have a competitive advantage.  An organization must understand, what value added services their competitor is providing or the unique selling point of their competitors. How they can differentiate from their competitors. What benefits a company can offer to the customers which competitors does not offer.

In other words, understand competitors marketing mix strategy i.e. product, price, placement, promotion, people, process and physical evidence. Other approaches for market competitive analysis is PEST Analysis , PESTLE Analysis and SWOT Analysis as well.

An organization must understand that unawareness of competitors can make it difficult beat the competitors and lead the market. It must know how competitors react when there is a change in market environment such as political and legal changes, technological change, change in consumers behaviours can impact their business. They should also analyze how their competitors are responding to market changes and what tactics they are using to come up with better planning to these changes.

For Instance, Videocon, BPL, Onida and others are competitors of Philip Television in Television Market. The other form of competition is “Product Form” in which customer seeks different features and functions in a product. For example, a customer is willing to purchase a two-wheeler car which can come with gears and without gear, automatic or manual. These are the features of product and services which customer would be considered during the purchase process.

Skilled employees can help an organization to achieve organizational goals and objectives. As skilled and experienced employees has expertise to support organization to get success. This begins with the hiring process and continues through regular and timely training and development sessions. The training and development process helps the employees to work effectively and efficiently in order to achieve the organizational goals, specifically in service sector.

To some extent employees affect business environment. If there is low motivation and low skilled employees, business would suffer as the employees would be least motivated towards sales.

Actions of a supplier can influence the business strategy, as they provide the materials for production. For instance, if their services will not reasonable and timely that will affect the production time and the sales due to delayed process of production.

If the supplier increases the prices of raw material they provide to the company, it will impact the marketing mix strategy of an organization, which will end-up with the increase in price of finished goods. Therefore keeping a strong relation with supplier can help a company in getting an edge over competitors.

Shareholders

Shareholders of an organization have an influence as the company want investors to increase for this they might make a decision to increase money by buoyant on stock market, i.e. shifting to public from private ownership. This change will pressure the company as the public shareholders seek returns on their investment.

The shareholders’ demand for raise in profit can influence the business success in longer-run. Therefore, it is important for top management to keep strong and better relations with shareholders to have a successful business on long-term basis.

Media and Social Media

The way media acts can make or break an organization. Organization should manage to keep a good relationship with media as whatever it shows will directly influence the organization business. If media will show positive aspect, this will increase the business of organization and vice-versa. In order to maintain good relations with media some organization do maintain a public relation department who manage events and deal with media on behalf of company

Organizations must understand the ways which they can reach their customers and have positive company and brand image in their mind. For this, some organization approaches newspapers to let people know about their business and some approach consumer television programs to have the attention of a large number of direct audience. These days social media applications are a good idea to reach customers in a more appropriate way i.e. Facebook, Youtube, Twitter and Instagram etc.

A story that has been done by the media on a one-off, could impact on a firms’ daily operations thus becoming that firms micro environment. However, a firm could be influenced to have long term operational decisions in a bid to avoid negative media stories.

It is not necessary that business will control microenvironment factors all the time. Since micro and macro environment affect marketing campaigns, companies should conduct environmental analysis before developing marketing strategy.

About The Author

Umar Farooq