2. 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.

3. COMPANY/
ORGANIZATION
Suppliers
DistributorsCompetition

4. They 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.

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

6. Customers 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.
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.

7. Any 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.

8. 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.