Question

Explain any three external elements of the micro business environment.

Answer 1

Three external elements of micro business environment are :

Suppliers: Like the customers, the suppliers also influence business. If a business has only one supplier and he gets annoyed because of some reason, the supply of goods can be stopped and the very existence of the business can be threatened or endangered. Hence, efforts should be made to have various suppliers.

Competitors: The competing firms can influence business in a number of ways. They can do so by bringing new and cheap products in the market, by launching some sales promotion schemes or other similar methods.

Public: The public has different constituents like the local public, press or media, etc. The attitude or behavior of these constituents can affect business units. For example, the local population can oppose some established firms whose business is excessively noisy. Similarly, if the media gives some favorable reports about a particular company the price of its share can register an increase in this count.