Business Environment: Micro Environmental Factors Report, BIZ202

This report, prepared for BIZ202, provides a comprehensive analysis of the micro environmental factors that significantly influence business operations and success. It examines crucial elements such as customers, employees, competitors, suppliers, distribution channels, shareholders, and the public. The report emphasizes the importance of understanding these factors for strategic planning, efficient operations, and financial success. It delves into each factor, discussing their impact and offering insights into how businesses should manage them to mitigate risks and capitalize on opportunities. The analysis includes the importance of customers, employee performance, competitor analysis, supply chain management, and stakeholder relations, alongside the impact of public opinion and media. The report also references key academic sources and frameworks like SWOT analysis to provide a well-rounded understanding of the micro-environment's effect on business decisions and overall performance. The student has addressed the challenges and risks associated with these factors.

Running Head: Micro Environmental Factors of a Business
Micro Environmental Factors of a Business
Name of the Student
Name of the University
Author Note

1Micro Environmental Factors of a Business
Executive Summary
The paper aims at discussing about the micro environmental factors which are important for
the success of every business organization. The paper discusses about the different typres of
the mico environmental factors which are the customers, employees, competitors, suppliers,
distribution channels, shareholders and public and how and in which ways they are important
for a business organization and the business organization should always protect their interests
in order to achieve success in their operations.

2Micro Environmental Factors of a Business
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
References..................................................................................................................................6

3Micro Environmental Factors of a Business
Micro Environment of Business: 6 Factors of Micro Environment of Business
Introduction
The factors which are found in the immediate area of operation and affect the freedom
of performance as well as decision making are termed as the micro-environment of a
business. It includes customers, employees, competitors, suppliers, distribution channels,
shareholders and public. It is important for the purpose of formulation of the strategies to
understand these factors and they also affect the performance of a business organization in
several ways (Financial Times., 2020). At the same time, it also helps in the planning process
of the organization for increasing the efficiency of the operations and financial success. Thus,
the micro environmental factors are important for every business ("Micro Environment of
Business: 6 Factors of Micro Environment of Business", 2020).
A brief analysis of these factors is given below which shows how it affects each and
every business (Testa, et al., 2016)-
 Customers- The most important factor in the microenvironment is the customers
because they have a large impact on the business. Moreover, recently their importance
has increased and it is healthier for a business if they know their customers better.
 Employees- Another important factor of microenvironment are the employees. The
performance of the employees is one of the important drivers which affect the
performance of the business at the same time the productivity of the business.
 Competitors- The competitors are found everywhere in every industry as a result, the
level of competition has a major impact on profits. A high competitive market helps
the business organization to stand out among the competitors and it compels the
business to revise the strategies of business and marketing.

4Micro Environmental Factors of a Business
 Suppliers and distribution channels- It is important for every business to manage the
supply chain along with the network of distribution as it helps to reduce the cost of
operations and improves the efficiency of the business organization.
 Shareholders and Investors- The most important internal stakeholders of a business
are the shareholders and the investors. They help the business to grow and create a
value for the shareholders.
 Public and Media- The fortune of any business depends on the image of the company
and nowadays it is important to have a strong brand image and for this it is important
to invest on the social and environmental concerns ("Micro Environment of Business:
6 Factors of Micro Environment of Business", 2020).
Discussion
The micro environment is the environment which has direct impact on the business. It
is that particular area in which the business organization operates and it directly affects the
processes of the business. As discussed earlier, the micro elements include the customers
which basically include the customer base which the company attracts for purchasing the
product (Clinton & Whisnant, 2019). The important factors which are related to the
customers are-
 The stability of demand
 The demand stability
 The prospects of the growth of sales
 The intensity of the competition
The suppliers have been considered as the important element of micro environment as
they have a big influence on the success of any business. The suppliers are important
because-

5Micro Environmental Factors of a Business
 They provide a link in the value of the delivery process
 They are the insurance for having the necessary resources of the business
 They are considered as an essential determinant for the purpose of increase and
decrease in the price.
It is important to know the marketing tactics of the competitors like how the products can
affect the business of the competitor and how that can be used in order to gain over them. The
factors which matter in terms of the competitors are-
 Desire of the competition
 Brand Competition
 Competition of product form
The purpose of every business organization is to appease the general public. Every steps
of the business organization are to be considered from the viewpoint of them. The general
public are important to the public because of their opinion, environmental pollution and
media ("Micro Environment of Business: 6 Factors of Micro Environment of Business",
2020).
Similarly, the resellers are also considered as important elements of the micro
environment of the business. It is important for the purpose of reselling the products with the
help of a third party and as a result the success of the business greatly depends on them
(Linder & Williander, 2017). The resellers help to form a link between the business and the
customers and they are important because they help in various factors like-
 Sales
 Promotion
 Marketing

6Micro Environmental Factors of a Business
 Distribution
 Financial Meditation
Moreover, SWOT analysis is important for understanding the micro factors. The micro
factors are the internal factors which affect every business organization. It is important for the
success of the business and every business decisions largely depend on these factors (Gürel &
Tat, 2017).

7Micro Environmental Factors of a Business
References
Clinton, L., & Whisnant, R. (2019). Business model innovations for sustainability.
In Managing Sustainable Business (pp. 463-503). Springer, Dordrecht.
Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Linder, M., & Williander, M. (2017). Circular business model innovation: inherent
uncertainties. Business strategy and the environment, 26(2), 182-196.
Testa, F., Gusmerottia, N. M., Corsini, F., Passetti, E., & Iraldo, F. (2016). Factors affecting
environmental management by small and micro firms: The importance of
entrepreneurs’ attitudes and environmental investment. Corporate Social
Responsibility and Environmental Management, 23(6), 373-385.
Micro Environment of Business: 6 Factors of Micro Environment of Business. (2020).
Retrieved 14 March 2020, from http://www.yourarticlelibrary.com/business/micro-
environment-of-business-6-factors-of-micro-environment-of-business/23370
Financial Times. (2020). Subs.ft.com. Retrieved 12 March 2020, from
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