Business Environment

6 Micro factors affecting Business Environment


An external factor which affects the business environment means the factor beyond the control of business. These can be broadly classified into micro and macro environment.

Micro Business Environment: It means the forces which are immediate close to the business organization and influence its functioning. It affects different firms in different ways depending upon its circumstances. Micro environment consists of following parameters:

  1. Suppliers: Suppliers provide the company with raw materials, human resources, technology and components etc. Any organization which depends upon only one supplier will be paralyzed or shut down soon. Thus it is very necessary for the organization to keep in touch with different suppliers and to make a regular check on suppliers attitude and financial health.
  2. Customers: Customers are treated as king for business. They are the only reason why the business is in existence. A firm may have variety of customers from whole sellers, retailers, domestic buyers, to foreign buyers and so on. Each segment need to be constantly analyzed as this is the area which involves regular challenges and getting increasingly complex.
  3. Competitors: It means the parties who are producing the same kinds of products. There may be brand competitors also like Lee, Levis, Wrangler etc. So the companies have to make different kinds of selling strategies to promote their products.
  4. micro factorsPublic: It includes employee and different types of officers of the company. Thus the organization must satisfy the human resources working in the organization.
  5. Market Intermediaries: It includes whole sellers, retailers and commission agents. It is the responsibility of the business to keep a check on whole sellers, retailers and commission agents working for them.
  6. Regulatory agencies or financiers: It means government of independent agencies like telephone regulatory authority of India, bureau of Indian standards, DRDO.

These are the 6 Micro factors affecting Business Environment


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