Question

Explain any five External factors of Micro environment that influence a business organisation.

Answer 1

The external factors of micro environment that influence a business organisation are as follows:

1. Customers: Customers play a crucial role in the micro environment, driving demand for the organization's products or services. Understanding consumer demands, preferences, and behaviour is crucial for establishing effective marketing strategies, product innovation, and customer satisfaction programmes.
2. Suppliers: Suppliers supply resources, commodities, and components needed for the organization's activities. Supplier reliability, quality, and cost-effectiveness have a substantial impact on manufacturing processes, product quality, and competitiveness.
3. Competitors: Competitors shape the competitive landscape in the industry. Monitoring competitors' strategies, pricing, product offerings, and market share helps uncover opportunities, mitigate threats, and develop competitive strategies to maintain or improve the organization's market position.
4. Intermediaries: Intermediaries, including distributors, retailers, and wholesalers, help organisations distribute and sell their products or services to clients. Intermediaries' ability to access target customers, manage inventory, and provide customer assistance can affect an organization's sales performance.
5. Public: The term "public" encompasses stakeholders and interest groups who have an impact on an organization's operations and activities. This may involve government authorities, regulators, media, stockholders, and local communities. Effectively managing public relations, addressing issues, and maintaining a positive reputation are crucial for an organization's long-term success.