the micro and macro environmental factors effecting business environment are described

2. A business works in a combination of
various external and internal factors. No
business can function in isolation. The
combination of various external and
internal factors is divided into two broad
categories i.e. Micro Economical Factors
(like consumer, suppliers, competitors
etc) and Macro Economical Factors (like
socio political scenario in the country,
demographic factors etc).

3. Macro
Environmental
Factors
Environmental
Factors
Micro
Environmental
Factors

5. Micro
Environ
mental
Factors
consumer
Public competetor
Media
Market
Intermediaries
Supplier

6. According to Peter. F. Drucker, “There is
only one valid definition of business
purpose, that is to create a customer.”
Customers are the ones who use the
product of companies. Therefore,
ensuring customer satisfaction and
maintaining a tab of consumer’s tastes
and preferences is very important for the
company’s product to grow and cherish.

7. Every business has its own competitors.
No matters how big the organization is, it
cannot enjoy monopoly for ever
(excluding exception like Indian
railways). Therefore, a business should
always be wary of its competitors. It
should be able to offer product
differentiation and other features in order
to make its product unique from that of
their competitors.

8. According to Michael Porter, “the relationship
between suppliers and the firm epitomises a
power equation between them. This equation is
based on the industry conditions and the extent
to which each of them is dependent on the
other.”
Supplier directly influences the quality of the
product. If a supplier provides less quality of
raw material then the quality of our product
automatically declines. Therefore maintaining
good relationship with suppliers and selecting a
right supplier is very important.

9. Most of the companies find it difficult to
approach customers directly to sell the
product. Market intermediaries are the
ones who bridge the gap between the
customers and suppliers. They can be
agencies, wholesalers, retailers etc.
Choosing the right region to trade our
product is also very important.

10. Positive media opinion may make a
product and negative media opinion may
break a product. Therefore, a company
needs to maintain good relationships
with media in order to remove the
negative image and bring in a positive
image of the product.

11. According to Philip Kotler, “A public is any
group that has an actual or potential interest in
or impact on a company’s ability to achieve its
objectives.”
Therefore, goodwill among public helps
promote the product very much. A company not
just need to focus on product but also be
responsible toward the public. For example,
Tata Consultancy services or any Tata group of
industries, two differently abled candidates
(physically challenged) are especially employed
indicating the corporate social responsibility
towards the public.

12. All the micro economic factors can be
controlled by the management. Therefore
a company always needs to be cautious
of the changes happening and always
tailor the strategies accordingly.

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ESS/MICRO-ENVIRONMENT-OF- BUSINESS-6-
FACTORS-OF-MICRO-ENVIRONMENT-OF-
BUSINESS/23370/
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business-environment-definition-factors-
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