Question

Explain the micro environmental factors of the business.

Answer 1

Micro environmental factors are those, which are in the immediate environment of a business affecting its performance. These include the following:

1. Suppliers: In any organisation the suppliers of raw materials and other inputs play a vital role. Timely procurement of materials from suppliers enables continuity in production and reduces the cost of production.
2. Customers: The aim of any business is to satisfy the needs of its customers. The customer is the king of the business.
3. Competitors: All organisations face competition at all levels local, national and global. Competitors maybe for the same product or for similar products.
4. Financiers: The financiers of a business includes the debenture holders and financial
   institutions.
5. Marketing Channel members: The marketing intermediaries serve as a connecting link between the business and its customers. The middlemen like dealers, wholesalers, and retailers ensure the transfer of products to customers.