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35 Micro Environmental Analysis Examples

🔝 top-10 micro environmental analysis examples, 🤔 what is micro environment in business, 📊 what are micro environmental factors, 🔎 what is a micro environment analysis, 🔧 micro environment analysis tools, 💡 essay ideas on micro environmental analysis.

Today, several internal and external factors come into play to drive sustainable growth for businesses. It takes seamless coordination and implementation between these elements to nurture the future development of a company.

Micro environmental analysis refers to internal factors like employees, customers, suppliers, shareholders, and competitors that lead to failure or success. Keep reading to learn more about it and find some excellent micro environment essay examples.

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• Eastman Kodak Company's Marketing Analysis
• Lolous Company's Marketing Plan
• Atec Incorporation Marketing Plan
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• Toyota Motor Corporation's Marketing Plan
• Eye2Go Company's Three Year Marketing Plan

Micro environment pinpoints an organizational environment that can directly influence day-to-day operations. It involves several internal forces that can lead to the success or failure of a company. Depending on the organizational issue, these internal factors are unique in nature. In fact, they can impact the company’s performance potential over time. 

In a competitive landscape, companies face a lot of challenges, and things get more complicated when internal micro environmental elements are distinctive.

Macro Vs. Micro Environment

Suppliers can impact a company’s delivery network and customer value . Their reliability determines whether or not the business can maintain smooth operations. Typically, managers have to exercise full control over suppliers’ costs and availability. If the supply shortages and expenses are under control, the company won’t have to deal with customer dissatisfaction and decreased sales.

The Company

When reviewing micro environmental factors, it is crucial to consider top management, HR, finance, accounting, and research and development departments . There’s no rocket science – managers have to collaborate and bring stakeholders on the same page to make informed decisions and follow strategic plans.

Competitors

Competitors or rivals propel companies to improve their customer satisfaction and overall value. Businesses have to meet customers’ increasing demands and expectations to maintain a competitive edge in the market.

Marketing Intermediaries

In a standard value delivery network, marketing intermediaries play a crucial role for any company. Middlemen like merchants or agents help businesses find potential customers, whereas physical distribution entities like transportation and warehouses assist companies in stocking and moving goods.

In a company’s micro environment, customers are the most valuable actors. Companies need a solid value delivery system to engage customers and build long-term relationships to drive growth. Customer markets can include business, reseller, government, international, and consumer markets .

General Public

The general public is a potential group interested in the product or service offered by the company. The company can lose the general public’s interest if business offerings are not purposeful.

From a company’s perspective, the public falls into several categories:

• media public,
• citizen-action public,
• financial public,
• local public,
• general public,
• internal public.

A micro environment includes elements within a unique organizational environment. Micro doesn’t translate into a minor task or factor. It hints at one or more problems within a company and how often they can affect organizational growth .

Look at a micro environment analysis through the lens of the company rather than the industry. Technically, micro environment analysis refers to reviewed internal forces of a micro environment. It can be about the competitor, market, stakeholder, or supplier analyses.

A SWOT analysis is one of the most effective micro environment analysis tools. It helps you understand the strengths , opportunities , weaknesses , and threats of each internal force. You can use this method to paint a full picture of all internal elements that can influence the growth and performance of your business. SWOT analysis can work as a direct indicator to assess different organizational areas and determine if there’s been an improvement. An in-depth SWOT analysis helps organizations tackle challenges, threats, and avail opportunities.

Porter’s 5 Forces

Porter’s Five Forces refer to a model to review five key competitive factors that apply to all industries. This model makes it easier to spot the pros and cons of an industry. It includes the following:

• Competitive rivalry in the same industry
• Substitute threat of a product or service
• The bargaining influence of customers
• The bargaining influence of suppliers
• The potential threat of new players in the market

Need some additional information? Check our more micro environment essay examples on the web page below.

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• Every Thing You Need to Know About Micro-environment!

The business world as we see it today is more intense and competitive than ever before. In other words, the stakes for businesses were never this high and competition only gets fiercer each day. In such a scenario, organizations’ effectiveness in terms of strategic planning becomes a critical success factor for them.

Table of Contents

• What is micro environment

Micro environment in business

• Micro environment in marketing

Speaking of strategic planning, there are various dimensions that businesses take into account while realizing their strategic goals and objectives. These strategic goals explain the long-term plans that organizations have to ensure swift advancement and dominance in the industry. While there are various major considerations with respect to strategic planning, environmental analysis is a key objective for companies.

To explain, a lucid understanding of the internal environment, as well as the external environment corresponding to a company or industry, aids in setting business objectives and realizing the future course of action. The fact of the matter is that the external environment factors define the overall scenario in a specific industry as influenced by the macro environment.

In this blog, we delve further into understanding the conceptualization of the micro environment, the factors that are a part of the micro environment, and how they affect businesses. The blog highlights all the intricacies of micro environment in business and micro environment in marketing. So, let us get started with micro environment definition and contextual understanding.

What is micro environment?

Micro environment is a business term that refers to the direct factors existing within the company that can directly impact the operations and decision-making of the company. These factors play a crucial role in the context of a firm's business strategies and the setting of strategic business goals.

When a business creates a favourable operating environment, this will highlight various business opportunities for a firm, on the other hand, an unfavourable operating environment will point at the prevailing threats that a business needs to mitigate.

To further explain, the micro environment of an enterprise is inclusive of five prominent factors that include the following:

• Competitors
• Market intermediaries

As you can clearly identify, each of the above dimensions of micro-environment-factors is a crucial determinant in giving companies a clear direction with respect to strategic planning . Also, these factors directly affect the success and authority of a business in its corresponding industry.

This explains why organizations or business leaders associate such great significance with micro environment analysis to identify the immediate threats and opportunities in the operating environment. In fact, in this context, Porter’s Five Forces Analysis proves to be a highly effective and reliable strategic planning tool for the worthwhile assessment of the micro environment.

Probing further, the subsequent sections explain micro-environment-factors and sheds light on the influence of each micro environment factor on business strategies and business success.

For any business big or small, it is essential that the top management has great awareness of the operating environment. Any threat that a business does not identify in a timely manner can doom the business at a later stage. Similarly, any missed opportunity in the immediate environment could imply that the business missed out on scaling new heights. Having said that, for businesses, it is important to conduct a well-detailed micro environment analysis at regular intervals.

The bottom line is that an effective micro environment analysis facilitates strategic change management that could transform the destiny of an organization for the better. The role of the top management is not limited to realizing the threats and opportunities existing in the micro environment. The ultimate objective is to act upon those opportunities or threats to make a real difference in terms of business performance and success.

Now, let us comprehend how each dimension of micro-environment-factors can directly or indirectly impact an organization’s prospects of success. Besides, it also offers a lucid understanding of the reasons why organizations need to have their strategic goals and plans in alignment with the present state of micro environment factors.

Micro environment factors and their influence

Well, we already listed out the six verticals of micro environment that hold the key to micro environment analysis and subsequently, business planning. Now, let us find out in detail how each of these factors has a considerable influence.

1. Competitors

Competitor analysis not only helps companies to understand what is working well for their competitors but also helps them to realize the existing gaps in their own strategies. Having said that, for any firm, competitors make a vital part of the operating environment. Businesses can always learn from the strengths and weaknesses of their competitors.

Moreover, identifying and analyzing the competitors also helps companies to determine the degree of rivalry in the market. When the degree of competition or rivalry is high, the stakes are high too and there is no margin for error. For any firm, it is important to understand the magnitude of rivalry in the market or the operating environment so that they can set attainable goals for developing competitive advantages.

Moving forward, for a business, competition exists not only in the form of business rivals but also in terms of products and services. In a perfect competition market wherein all enterprises are offering identical products or services, consumers have readily available substitutes. Consumers can easily switch to new businesses or products when the threat of substitutes is high and consumer switching costs are low.

For instance, the degree of competition is high in the consumer goods market as all companies are equally placed and sell similar products. If you use the products of Unilever Global , making the switch to Procter & Gamble will not make much of a difference.

All in all, an analysis of competitors helps companies to recognize their competitive positioning in the market, the degree of rivalry, and the threat of substitutes from other companies or products. In accordance with the same, businesses formulate their strategies for expansion and growth. Lastly, with respect to assessing the competition in the market, realizing the threat posed by new players or emerging businesses is also vital.

2. Consumers

Let’s start with a simple question, can a business advance without consumers? Can a business scale new heights without acquiring new customers at all times? Certainly, the answer to both these questions is well known to all of us.

One of the most important objectives of any business is to create incremental consumer demand. As it is often said, “consumers are the king” and this fact will stay forever. With respect to the analysis of micro-environment-factors, it is not only important to realize consumer preferences and needs but also to recognize the bargaining power of consumers. If we look at the state of affairs in the contemporary business world, everything revolves around consumer experiences. Businesses are paying more heed to consumer feedback than ever before in the bid to acquire and retain customers with exceptional experiences.

However, in the context of micro-environment-factors specifically, the primary objective of an enterprise is to analyze the bargaining power of consumers. To explain, the bargaining power of consumers is a direct measure of the kind of influence that consumers can have on a company’s product quality, pricing strategies, and functional efficiency.

When consumers assume enormous bargaining power, they can exert massive influence on companies to offer the highest quality at the lowest possible price. But the real question is, under what conditions is the bargaining power of consumers high? What are the substantial determinants of the bargaining power of buyers?

The factors that influence the bargaining power of buyers are listed below:

1. The number of buyers

When there is a large number of buyers in the market, the bargaining power of buyers is low. However, when there are only a few buyers and each buyer holds a substantial market share, the bargaining power of buyers is very high.

2. Switching costs

Consumer switching cost simply refers to the additional costs that consumers will have to incur when they switch to a new brand or product. For consumers, switching costs is a major consideration. Having said that, if the switching cost is low, consumers assume a greater bargaining power as they can switch to a new brand or product easily. On the contrary, if switching costs are too high, the bargaining power of consumers reduces significantly.

For instance, the switching costs for buyers are almost negligible in the consumer goods and grocery market. However, in the automobile market or the consumer electronics market, the switching costs can be too overwhelming for consumers.

3. The threat of backward integration

The bargaining power of consumers is high when buyers can exert great influence in terms of forcing backward integration. To explain, backward integration is the process by which companies buy suppliers or vendors in the supply chain.

4. Nature of commodities

In a market with standardized products, the bargaining power of buyers is high as the switching costs are low. However, in a market with large scale product differentiation, the consumer switching costs are high and hence the bargaining power is low.

3. Suppliers

Every business has a large magnitude of dependence on supply chain management and this is where the relationship between businesses and suppliers holds immense significance. Further, in the operational environment of a given firm, the bargaining power of suppliers can largely affect business operations and strategic planning for a sustainable future.

To explain, the bargaining power of suppliers in micro environment explains the extent to which suppliers in an industry can influence product quality, supply chain operations, and prices of firms. In contemporary times, we often hear about a global supply chain crisis that is affecting supply chains and production across all industries. In times like these where companies are at a disadvantage, suppliers assume massive bargaining power.

However, that is just one aspect of the various factors that determine the bargaining power of suppliers. These factors are listed below:

1. Availability of substitutes

The bargaining power of suppliers will be next to negligible if there is a large number of suppliers in the industry and replacements are easily available. However, when there are only a few suppliers and substitutes are not easily available, suppliers will have a much greater influence on companies

2. Reliance of suppliers on the industry

In case the suppliers rely solely on one industry for their profitability, their bargaining power will be low while the bargaining power of companies in the industry will be very high. On the flip side, the suppliers get revenue from various industries and are not entirely dependent on one market, the bargaining power of the suppliers will be high.

3. Switching costs for enterprises

Switching cost is not only a consideration for consumers but also for businesses. For enterprises, switching costs exist in terms of the additional costs to be incurred when they switch from one supplier to another. Having said that, if the switching costs are too high for companies, suppliers will assume greater bargaining power. Alternatively, if the switching costs are low and there are plenty of suppliers to choose from, the bargaining power of the suppliers will be low.

4. The threat of forwarding integration

Another major consideration with respect to the analysis of suppliers is whether they can exert the risk of forward integration or not. To explain, forward integration is the process through which companies look to reduce operational costs by purchasing supplier firms. By doing so, companies can eliminate third-party reliance on suppliers for distribution.

In the context of the operating environment of a company, the micro environment factor of people pertains to the local public, consumer rights groups, environmentalists, and other segments of the general public that can potentially affect a business and its success metrics.

Having said that, it is important for companies to maintain a positive relationship with the segments of the general public for positive public perception and to manage business reputation effectively. When businesses have a positive reputation among the general public inclusive of various interest groups, it is likely to attract new customers.

On the contrary, a negative public perception can dent the business and it may end up losing investors’ and customers’ trust. For instance, Starbucks has drawn a lot of flak in the past from environmental groups for its disposable plastic cups adding immensely to pollution. The criticism of Starbucks majorly led by environmentalist groups compelled the eco-friendly customers to switch to other brands. Hence, the company had to address the ethical issues pertaining to environmental neglect with immediate effect and introduce reusable paper cups.

5. Marketing intermediaries

Marketing intermediaries include middlemen or intermediary agencies that assist businesses in terms of promotion, selling, and distribution of their products. To further elaborate, marketing intermediaries include sellers, resellers, wholesalers, and other agents in the distribution channel.

Now, it is a well-known fact that businesses need to maintain an extensive network of sellers and wholesalers to ensure smooth distribution channels that are vital for revenue generation. Hence, companies need to analyze the marketing intermediaries and the value drawn from them on a regular basis to remain competitive. Also, they need to review their relationship with the marketing intermediaries at regular intervals to plug the gaps in the best interest of business objectives.

Now you will definitely have a crystal clear idea of the significance and impact of each factor that is taken into account while analyzing micro-environment-factors. In addition to the macro environment in business, it is equally important for businesses to analyze the micro environment that gives a clear picture of the immediate operating environment.

Proceeding further, the purpose of analyzing the micro environment is not limited to refining or developing operational strategies. Even from the marketing perspective, the analysis of the micro environment is imperative. Having said that, the ensuing section sheds light on all that you need to know about the micro environment in marketing.

What is micro environment in marketing?

The 4 Ps of Marketing also called the marketing mix include Product, Price, Place, and Promotion. Having said that, from the marketing perspective, each marketing strategy is centered around these 4 Ps. What we need to acknowledge is that the micro-environment factors mentioned above also have a huge impact on the 4Ps of marketing.

Needless to say, marketing is one of the core functionalities of every business. If we look around, the most successful business organizations in contemporary times also have the most innovative marketing strategies. The bottom line is that irrespective of whether it is a highly established brand like Nike or an emerging startup, effective marketing is indispensable.

For businesses to acquire new leads and convert customers at a swift pace, they need to work consistently on marketing objectives that include enhanced market share, increased brand awareness, product launch, market penetration, and so on. These marketing SMART Goals are directly linked with greater business success in terms of customer acquisition, revenue generation, and profitability.

What we need to understand is how the micro environment factors influence the product or service being offered by a business, the pricing strategies linked to the product, the places where the product is promoted, and the promotional strategies implemented by a company. So, let us comprehend in detail how each factor can have a substantial influence on a brand’s marketing.

The product quality of competitors and how competitors promote their products directly impact the marketing strategies of a company. Also, competitors’ pricing strategies influence a company’s pricing strategies.

Hence, in the formulation of marketing plans, companies undertake the objective of competitor analysis to identify the marketing channels that competitor firms are using. In fact, companies analyze the 4 Ps marketing mix of competitor firms on a regular basis to constantly optimize their marketing.

In contemporary marketing, companies are very watchful of each other’s digital marketing strategies and promotional offers. For instance, when one major firm in the industry runs discount campaigns, other companies also come up with special promotional offers for customers. For instance, when Zara is selling its products at discounted rates, the likes of H&M will follow the same strategy along with other apparel brands. This is how competitor firms influence each other’s marketing strategies and brand positioning.

As discussed above, consumers directly influence the product quality and pricing strategies of a firm. For any brand, it is important to not only analyze the bargaining power of customers but also to identify the changing consumer needs and offer them the best-fit products or services.

Having said that, as per the bargaining power of the customers, companies decide their pricing strategies. Companies are less likely to introduce products or services with premium pricing where the bargaining power of customers is too high. Moreover, subject to the changing preferences of the consumer and their expectations of quality, companies change their product development strategies.

Companies look to consistently optimize their products or introduce new products in the market to stay ahead of the changing consumer preferences. This explains why automotive companies introduce facelifts of their best-performing cars after every two to three years to cater to the changing consumer preferences.

Moreover, based on consumer behavior, companies decide their promotional strategies. For instance, if a substantial proportion of consumer interactions start online or through social media, companies will lay greater emphasis on SEO, social media marketing, and other digital marketing strategies for customer acquisition. To gain further insights into optimizing your social media marketing efforts, you can read more about the services offered by a reputable social media marketing agency.

Like consumers, suppliers can also have a direct influence on product quality and pricing strategies. In a market where suppliers have enormous bargaining power, they can exploit the pricing strategies of companies.

Let us try to understand this by taking the example of the current scenario in the automotive industry. As most of us know, the global automotive industry is facing unprecedented losses because of supply chain bottlenecks primarily related to semiconductor shortages. In times when the industry is largely hit by semiconductor shortages, suppliers are assuming greater power and are exploiting the input costs for companies. Consequently, there is a price hike in the industry and hence a downfall in sales.

Through this example, we can clearly comprehend how suppliers can make a massive difference in the marketing micro environment. If suppliers choose to hoard back the supplies, it will put immense pressure on the supply chain operations of a firm. Consequently, it will directly impact product strategies and pricing strategies.

In the modern era, most companies want to position themselves as a sustainable brand that cares for the environment. Marketing on the lines of being a purpose driven brand has become the need of the hour for companies. This is for the simple reason that brands’ public perception is directly linked to their growth and the sustenance of their competitive advantages.

When brands promote their products along the lines of sustainability, they try to set a positive narrative among the general public and environmentalist groups. The preferences of the modern consumers are changing and they are being more watchful of brand perceptions than in the past. To substantiate, as per Business Wire , almost 80 percent of modern consumers want to buy from brands that are perceived as environment-friendly.

This explains why most brands and businesses are now promoting greater transparency in their sustainable approaches. Almost every business now provides a sustainability report in the public domain and has set targets for carbon neutrality. In fact, sustainability or CSR initiatives are now at the epicenter of marketing campaigns for most businesses.

To cite an example, big brands like Adidas are running exclusive sustainability campaigns for proactive marketing. Brands are now using sustainability as a unique selling proposition and to maintain a positive brand image among the general public and environmental activists. They realize that not doing so may harm the perception of their business and they may begin to lose customers to relatively more sustainable brands.

To cite another example, in recent times, PETA, a globally renowned animal rights organization, launched a campaign against Gucci for exploiting animals and treating them unethically for their exotic skins. Given the fact that PETA enjoys global recognition and influence, the campaign dented the public image of Gucci, the consequences of which would have surely been felt in terms of customer attrition. Again, very recently, Gucci was under criticism one more time as PETA called out the brand for using wild animals for its advertising campaigns.

Hence, while setting marketing objectives and formulating marketing plans, companies need to be considerate of the public view as that may have a significant impact on the achievement of marketing goals. Marketing dashboards examples can provide valuable insights into public perception and help companies make informed decisions.

As discussed above, marketing intermediaries have a direct correlation with the promotion and distribution of products. Companies’ relationship with the network of wholesalers, sellers, distributors and retailers is a key determinant of marketing and related operations. Also, the marketing intermediaries may have a substantial influence on the product and pricing strategies.

To explain, if a company is selling inferior products with an overpriced strategy, most wholesalers, distributors, or retailers would not want to deal with the company. On the other hand, if a company is selling a high-quality product with a penetration pricing strategy , most retailers and wholesalers will happily associate with that product.

For wholesalers, retailers, and distributors, the sole purpose of collaboration will be their own profitability rather than the company’s profitability. Having said that, they will only be interested in qualities that have substantial demand in the market for their quality and unique features.

Recommended Readings

What is macro environment?

Change management models businesses should know

To encapsulate, while macro environment factors offer an in-depth understanding of the overall industrial environment with respect to a country or market, the micro environment factors explain the immediate operating environment that surrounds a firm. For effective strategic planning, substantial analysis of both macro environment and micro environment is necessary. The findings of environmental analysis help the companies not only identify the threats or opportunities but also to chart a course of action for the future.

What is the difference between micro and macro environment?

The term "micro environment" describes the immediate context in which a firm operates, including elements like suppliers, clients, rival businesses, and other stakeholders. It is the particular setting in which an organisation runs and over which it has some degree of power or influence.

On the other hand, the term "macro environment" refers to the broader, uncontrollable external elements, such as economic, technological, demographic, political, and cultural aspects, that have an impact on the business environment. These variables are frequently out of the company's hands, yet they can have a big impact on how it runs and how well it performs.

What are the tools used to analyse the micro environment?

Businesses use a number of micro environment tools, such as SWOT analysis , Porter's Five Forces analysis, PESTEL analysis , and customer analysis, to analyse their microenvironment. Businesses can discover their internal strengths and weaknesses as well as external opportunities and dangers by using a SWOT analysis.

By analysing the bargaining power of suppliers and customers, the threat posed by new competitors, the threat posed by substitutes, and the level of existing rivalry, Porter's Five Forces study aids firms in understanding the competitive environment. The political, economic, social, technical, environmental, and legal elements that could have an impact on the firm are taken into account by PESTEL analysis. Understanding a customer's requirements and preferences can help a business build better products and more effective marketing plans.

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6.4 A Firm’s Micro Environment: Porter’s Five Forces

• What makes up a firm’s external micro environment, and what tools do strategists use to understand it?

A firm’s micro environment is illustrated in the green circle in Exhibit 6 .2 . These entities are all directly connected to the firm in some way, and firms must understand the micro environment in order to successfully compete in an industry. All firms are part of an industry —a group of firms all making similar products or offering similar services, for example automobile manufacturers or airlines. Firms in an industry may or may not compete directly against one another, as we’ll discuss shortly, but they all face similar situations in terms of customer interests, supplier relations, and industry growth or decline.

Harvard strategy professor Michael Porter developed an analysis tool to evaluate a firm’s micro environment. Porter’s Five Forces is a tool used to examine different micro-environmental groups in order to understand the impact each group has on a firm in an industry ( Exhibit 6 .4 ). Each of the forces represents an aspect of competition that affects a firm’s potential to be successful in its industry. It is important to note that this tool is different than Porter’s generic strategy typology that we will discuss later.

Industry Rivalry

Industry rivalry , the first of Porter’s forces, is in the center of the diagram. Note that the arrows in the diagram show two-way relationships between rivalry and all of the other forces. This is because each force can affect how hard firms in an industry must compete against each other to gain customers, establish favorable supplier relationships, and defend themselves against new firms entering the industry.

When using Porter’s model, an analyst will determine if each force has a strong or weak impact on industry firms. In the case of rivalry, the question of strength focuses on how hard firms must fight against industry rivals (competitors) to gain customers and market share. Strong rivalry in an industry reduces the profit potential for all firms because consumers have many firms from which to purchase products or services and can make at least part of their purchasing decisions based on prices. An industry with weak rivalry will have few firms, meaning that there are enough customers for everyone, or will have firms that have each staked out a unique position in the industry, meaning that customers will be more loyal to the firm that best meets their particular needs.

The Threat of New Entrants

In an industry, there are incumbent (existing) firms that compete against each other as rivals. If an industry has a growing market or is very profitable, however, it may attract new entrants . These either are firms that start up in the industry as new companies or are firms from another industry that expand their capabilities or target markets to compete in an industry that is new to them.

Different industries may be easier or harder to enter depending on barriers to entry , factors that prevent new firms from successfully competing in the industry. Common barriers to entry include cost, brand loyalty, and industry growth. For example, the firms in the airline industry rarely face threats from new entrants because it is very expensive to obtain the equipment, airport landing rights, and expertise to start up a new airline.

Brand loyalty can also keep new firms from entering an industry, because customers who are familiar with a strong brand name may be unwilling to try a new, unknown brand. Industry growth can increase or decrease the chances a new entrant will succeed. In an industry with low growth, new customers are scarce, and a firm can only gain market share by attracting customers of other firms. Think of all the ads you see and hear from competing cell phone providers. Cell phone companies are facing lower industry growth and must offer consumers incentives to switch from another provider. On the other hand, high-growth industries have an increasing number of customers, and new firms can successfully appeal to new customers by offering them something existing firms do not offer. It is important to note that barriers to entry are not always external, firms often lobby politicians for regulations that can be a barrier to entry. These types of barriers will be covered in greater depth in more upper level courses.

Threat of Substitutes

In the context of Porter’s model, a substitute is any other product or service that can satisfy the same need for a customer as an industry’s offerings. Be careful not to confuse substitutes with rivals. Rivals offer similar products or services and directly compete with one another. Substitutes are completely different products or services that consumers would be willing to use instead of the product they currently use. For example, the fast food industry offers quickly prepared, convenient, low-cost meals. Customers can go to McDonald’s, Wendy’s, Burger King, or Taco Bell—all of these firms compete against each other for business. However, their customers are really just hungry people. What else could you do if you were hungry? You could go to the grocery store and buy food to prepare at home. McDonald’s does not directly compete against Kroger for customers, because they are in different industries, but McDonald’s does face a threat from grocery stores because they both sell food. How does McDonald’s defend itself from the threat of Kroger as a substitute? By making sure their food is already prepared and convenient to purchase—your burger or salad is ready to eat and available without even getting out of your car.

Supplier Power

Virtually all firms have suppliers who sell parts, materials, labor, or products. Supplier power refers to the balance of power in the relationship between firms and their suppliers in an industry. Suppliers can have the upper hand in a relationship if they offer specialized products or control rare resources. For example, when Sony develops a new PlayStation model, it often works with a single supplier to develop the most advanced processor chip it can for their game console. That means its supplier will be able to command a fairly high price for the processors, an indication that the supplier has power. On the other hand, a firm that needs commodity resources such as oil, wheat, or aluminum in its operations will have many suppliers to choose from and can easily switch suppliers if price or quality is better from a new partner. Commodity suppliers usually have low power.

Buyer Power

The last of Porter’s forces is buyer power , which refers to the balance of power in the relationship between a firm and its customers. If a firm provides a unique good or service, it will have the power to charge its customers premium prices, because those customers have no choice but to buy from the firm if they need that product. In contrast, when customers have many potential sources for a product, firms will need to attract customers by offering better prices or better value for the money if they want to sell their products. One protection firms have against buyer power is switching costs , the penalty consumers face when they choose to use a particular product made by a different company. Switching costs can be financial (the extra price paid to choose a different product) or practical (the time or hassle required to switch to a different product). For example, think about your smartphone. If you have an iPhone now, what would be the penalty for you to switch to a non-Apple smartphone? Would it just be the cost of the new phone? Smartphones are not inexpensive, but even when cell phone service providers offer free phones to new customers, many people still don’t switch. The loss of compatibility with other Apple products, the need to transfer apps and phone settings to another system, and the loss of favorite iPhone features, such as iMessage, are enough to keep many people loyal to their iPhones.

CONCEPT CHECK

• Describe each of Porter’s Five Forces. What information does each provide a manager trying to understand her firm’s micro environment?

Source contents: Principles of Management and Organizational Behavior . Please visit OpenStax for more details: https://openstax.org/subjects/view-all

Introduction to Management and Organizational Behavior Copyright © by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Business Jargons

A Business Encyclopedia

Micro Environment

Definition : Micro Environment, refers to the environment comprising of all the actors of an organization’s immediate environment which influences the performance of the company, as they have a direct bearing on the firm’s regular business operations.

The micro environment is popularly referred to as task environment or operating environment.

Elements of Micro Environment

The elements of the micro environment are closely associated with the company and they do not affect all the companies operating in the industry, in a similar manner, as some factors are specific to the firm.

So we can say that the micro environment is one which the firm addresses in its specific arena, such as the industry or the strategic group.

Competitors

Competition is what keeps the firm thriving. Competitors are the rival sellers operating in the same industry. It must be noted that the nature and intensity of competition highly influence the firm’s products and services. Product Differentiation is something that helps the firm to beat the cut-throat competition in the market.

For a firm to survive competition it is required to keep a close watch on the competitors (both existing and potential) future moves and actions, so as to prepare in advance, as well as to predict the response of competitors to company’s moves. Moreover, competitor analysis also helps in maintaining or improving market share and position.

Suppliers are the one who provides inputs such as material, components, labour and other stock of goods to the firm, which is required to undertake manufacturing activities. when there is uncertainty as to the supply constraints, it usually builds pressure on the firms and they are required to maintain high inventories, which leads to cost increases.

Suppliers have the power to change the firm’s position in the market and its capabilities.

The relationship amidst the firm and its suppliers represents a power equation, based on the industry conditions and their dependence on each other.

The success of the organization greatly depends on how effectively the firm fulfils the needs and wants of the customers, which is profitable to the firm and also provides value to the customer. The firm needs to analyze what the customers expect from their products and services so that the firm can satisfy them.

It must be noted that without customers no business can survive for a long time. So, the primary objective of the firm is to create and retain customers, to keep itself going.

Intermediaries

Intermediaries refer to marketing intermediaries which cover agents, merchants, distributors, dealers, wholesalers, etc. that participate in the company’s supply chain, in stocking and transporting the goods from their source location to their destination.

It acts as a link between the business organization and the ultimate consumer.

Shareholders

Shareholders are the real owners of the company who invest their money in the company’s business, by purchasing the shares, for which they are paid a dividend every year as a return. Shareholders have the right to vote in the company’s general meeting.

Placing the right person at the right job and retaining them for the long term by keeping the staff motivated is very important for the strategic planning process. Training and development act as a guide to the firm’s employees which ensures an up-to-date workforce.

A qualified and competent workforce can help the firm to achieve success with little efforts.

We all know the power of media these days, it can make or break an organization or its products/services overnight.

Management of media whether electronic media, press media or social media is really important not just to create a positive and clean image of the company and its products in front of the audience but also to support the firm in building a good reputation in the market. The right use of media can do wonders for the company and boost its sales.

When the firm competes with the firm operating in the same industry, with the same micro environmental factors, the relative success of the company is based on the relative effectiveness of the company in dealing with these factors.

Related terms:

• Monopolistic Competition
• Porter’s Five Forces Model
• Business Environment
• Internal Environment
• Macro Environment

Reader Interactions

Kwanele says

April 24, 2021 at 6:43 pm

Who is the author of this article and when was it published?

Surbhi S says

April 26, 2021 at 9:39 am

The author of this article is Surbhi S. and it was published on Feb 14, 2020

Jorge Morais Diamantino says

November 6, 2021 at 8:12 pm

THANKS FOR THIS

February 6, 2023 at 8:30 pm

Thank you very much!

harry machamanda says

January 31, 2022 at 3:21 am

great explanation

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Thank you for helping us understand business jargons

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Micro-Environmental Analysis Of Apple Inc Essay Sample

Type of paper: Essay

Topic: Business , Market , Customers , Steve Jobs , Products , Apple , Company , Marketing

Published: 03/10/2020

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Apple is an American multinational company formed in 1976 by Steve Jobs and his friends S. Wozniak, and R. Wayne. Apple’s products brought revolution in personal computer and consumer electronic industry. Apple is well-known in world market for its innovative products. Micro-environmental analysis of the Apple will help in understanding direct impact of micro environment factors on the company, its operations and business performance. This paper discusses the impact of micro-environmental factors on the Apple Inc.

A micro-environmental analysis will analyze all internal and micro factors such as company, employees, suppliers, customers, competitors, and publics/ media.

The Company: Apple has achieved new heights of success under the guidance of Steve Jobs. Steve was great a leader with extraordinary management skills. The leadership style of Steve was mix of situational and transformational. Steve was aware how make employees efficient and satisfied. Steve developed a collaborative organizational environment where all employees can share their ideas freely and participate in decision-making process. Collaborative environment of Apple not only empowered employees but also helped organization in bringing innovation to market before its competitors (Badenhorst-Weiss et al.). Presently Apple is growing under the guidance of Tim Cook who is also following the steps of Steve Jobs and taking his legacy forward. Apple is holding strong financial position in the market with annual revenue of around 183 billion US$ (2014) (Apple Press). Net income of the company is around 40 billion US$ for 2014. Recent success of i6 and iOS 8 across the world also positively impacted brand image and cash flow of the company. Apple is always on the top in bringing innovative technology to the consumers, which has proven on various instances. Apple involved in offering large variety of consumer electronics and computers that fulfill different needs of the customers. The offerings of Apple includes: Mac, iPod, iPad, iPhone, iTunes, Apple watch, and Apple store. Innovations drives success of the organization, and all offerings of the Apple are one step ahead of its competitors (Apple). Human Resource/ Employees: Apple is aware that success of any organization cannot be achieved without effective human resource management. Each employee at Apple has clear allocation of responsibilities; they understand their role and deliver the service as per the standards established by the Apple. All managers treat their employees with respect and dignity. Managers coach their team members and provide all type of support, training to drive customer satisfaction and organizational growth. Apple also ensures that it provide ample opportunity of growth and learnings to its employees. Employees at Apple can freely share their problems and issues with their seniors. A healthy working environment at Apple resulted in mutual growth of stakeholders (Fernando). Suppliers: Apple has large supplier base which provides company high bargaining power. The suppliers of the company are located in different parts of the world i.e. China, India, and South Africa. Apple believe in empowering its suppliers by organizing capacity building and training programs. A healthy and close relationship with its suppliers enables company to manage supply chain efficiently and gain competitive advantages. Apple developed strict code of conduct for its suppliers which need to follow by the suppliers. Apple ensure that all suppliers follow code of conduct by conducting various audits through the year and across the locations. Apple ensures that even small components is best in quality (Apple). Customers: Apple delivers what it promise to its customers i.e. good quality, innovative technology, excellent functioning and competitive pricing. According to a study conducted J.D. Power, Apple scores highest when it comes to customer satisfaction with 85 percent delighted customers (GSM Arena). Apple achieved customer satisfaction by efficiently managing all processes starting from procuring equipment, production of goods, retailing of the products and after sales services. Competitors: Apple is operating in very competitive market. Major competitors of Apple are Samsung, Microsoft and Google. In Smartphone market Motorola, HP, HCL and Blackberry also giving competition to the Apple. In developing countries Apple’s products are considered as premium products due to high pricing, however, Samsung has variety of products that are capable to fulfill needs of the customers and suitable on their pockets. Developing countries have wide untapped market and huge potential of growth that is presently not targeted by the Apple. It is important for the Apple to increase its product range and develop products in low price range in order to gain market share. Presently Samsung is holding top position when it comes to market share in Smart phone market. Apple needs to work strategically in order to regain its top position especially when product life cycle is too short and dynamics of market are continuously changing. Publics: media, government, financial bodies, and other general public falls into this factor. Apple is effectively dealing government bodies by adhering with all rules and regulations established by the authorities. Media may have mix opinion towards Apple by criticizing its products. However, customers like Apple and feel proud after owning its products.

Works Cited

"Apple Press." October 2014. Apple. 21 October 2014. Badenhorst-Weiss, H., Brevis, T., and Cant, M. Business Management: A Contemporary Approach. Cape Town: Juta and Company Ltd., 2008. Fernando, A.C. Business Environment. New Delhi: Pearson Education India, 2011. "Supplier Responsibility." 2014. Apple. Online. 21 October 2014. "US customer satisfaction led by Apple, Samsung close second." 25 April 2014 . GSM Arena. 21 October 2014.

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POLITICAL ENVIRONMENT

Political factors, in the context of the external environment in which a business functions, are a type of external constraint acting upon a business. They’re related to actions of governments and political conditions in the location where the business conducts business or seeks to conduct business. Government actions and political realities influence the success of the business.

Political environment can also affect government policies at local to federal level. Companies should be ready to deal with the local and international outcomes of politics. Changes in the government policy make up the political factors. The change can be economic, legal or social. It could also be a mix of these factors.

Change in the political factors can affect business strategy. The stability of a political system can very well decide about the appeal of a particular local market because Government is a major consumer of goods and services. Government is liable for protecting the public interest and thus it views business organizations as a vehicle for social reform. Government pass legislation, which impacts the relationship between the firm and its customers, suppliers and other companies.

Below, is a list of political factors affecting business:

§ Bureaucracy

§ Corruption level

§ Freedom of the press

§ Trade control

§ Education Law

§ Anti-trust law

§ Employment law

§ Discrimination law

§ Data protection law

§ Environmental Law

§ Health and safety law

§ Competition regulation

§ Regulation and deregulation

§ Tax policy (tax rates and incentives)

§ Government stability and related changes

§ Government involvement in trade unions and agreements

§ Import restrictions on quality and quantity of product

§ Intellectual property law (Copyright, patents)

§ Consumer protection and e-commerce

§ Laws that regulate environment pollution

ECONOMIC ENVIRONMENT

A business has many decisions to make – what to produce, how to produce, for whom to produce. However, these decisions will be affected greatly by the economy in which the firm operates. Even if the economy is quite stable, the business always has to monitor its own operations, those of the opposition and any changes to customers’ habits or even lifestyles. Where there is instability in the economy the decisions of the business will be even harder and difficult and even more important.

Economic environment refers to the aggregate of the nature of economic system of the country, the structural anatomy of the economy to economic policies of the government the organisation of the capital market, the nature of factor endowment, business cycles, the socio-economic infrastructure etc.

When the economy becomes unstable, that’s when problems will occur, when services and goods start to become in short supply or the price of the goods and services go so high that people are not able to afford them anymore. A rise in unemployment could mean that the production and supply of goods decrease and the amount of money to purchase the available goods decreases as well – due to wages being reduced. As there are less people in employment, the taxes being paid to the government are less (they need the taxes to fund services such as housing, health e.g. and education, etc.).

Economic factors that affect the business environments are as under:

· Government economic policies

· Rate of interest set by the central bank of any country

· Per capita Income which has a huge impact on business environment by changing their consumption behaviour

· Privatization policy by the government

· Instability in the economy due to bad political conditions in the county affects the business environment

· Customs duty structure

· Airline air freight charges

· Foreign investment in the country

SOCIAL ENVIRONMENT

Social environment of business means all factors around the business which affect it socially. It refers to the nature of social organisation and development of social institutions like caste, religion, customs, and socio-economic factors like class structure, social mobility, women employment etc.

Society is ever changing. The tastes and continuously changing trends are a part of it. It is highly affected by social media and social networking sites.

A business has some responsibilities towards society as it uses resources from society, so it has to return something to the society. Corporate social responsibility (CSR) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.

Below is a list of social factors which impact customer needs and size of markets:

§ Lifestyles

§ Buying habits

§ Education level

§ Emphasis on safety

§ Religion and beliefs

§ Health consciousness

§ Sex distribution

§ Average disposable income level

§ Social classes

§ Family size and structure

§ Minorities

§ Attitudes toward saving and investing

§ Attitudes toward green or ecological products

§ Attitudes toward for renewable energy

§ Population growth rate

§ Immigration and emigration rates

§ Age distribution and life expectancy rates

§ Attitudes toward imported products and services

§ Attitudes toward work, career, leisure and retirement

§ Attitudes toward customer service and product quality

TECHNOLOGICAL ENVIRONMENT

Technology has revolutionized the world. It is changing rapidly with newer innovations. It has influenced operations of the business over the world. Its influence is felt in practically all aspects on the day-to-day operations of businesses, both large and small.

Technology has also changed the face and the pace of how business functions. Business processes have been modified and organizations are now working much more efficiently than ever. At the same time, technology has opened a new way of communication, allowing businesses to communicate and collaborate beyond borders.

The growing use of IT and its tools, smartphones and various smart devices have taken the business to a next level. Today, it’s seen that those organizations are higher ranked are usually more advanced in technology. Technology has, in fact, made organizations to go digital.

The rapid development of technology requires quick reaction by businesses in order to survive in an emerging competitive environment and keep up with new trends and innovative services which other competitors might be offering.

These technological factors can include both products and processes and can present opportunities and threats but it is vital for competitive advantage and is a successful driver in globalisation. Products can be marketed in new ways and processes present immense Value to the business.

LEGAL ENVIRONMENT

The legal environment refers to the principles, rules and regulations established by the government and applicable to people. These regulations come through various legislations. The government has passed and enacted various Acts. Now due to globalization of economy, it became necessary to make changes in these Acts.

The legal environment plays a very crucial role in determining the success of a business. The government imposes taxes among other regulatory measures to promote economic growth and to cushion consumers from exploitation. Therefore, before establishing or when running a business, it is imperative to understand the role of regional tax measures and regulatory measures to determine how they affect business.

An understanding of the legal environment of business is relevant—indeed, essential—to functioning well within disciplines like accounting, finance, management and marketing. Additionally, a solid understanding of the legal environment can help avoid liability or at least minimize risk. In business, it is not enough to comport one and one’s business ethically. Business must also ensure that it understands the legal environment in which it is working. Therefore, it is important for the organization, for its employer, and for all the other people who may be relying on business expertise—such as employees and their family—to understand the legal environment. Such an understanding will help to avoid or lessen the likelihood of liability exposure, enabling organization to manage business affairs successfully, unhampered by unmanaged legal liability risks.

Most of the countries have consumer protection laws aimed at making sure that business act fairly towards their consumers. A few examples are

· Weight and Measures Act, 1976: This Act was enacted to establish standards of weights and measures, to regulate inter-State trade or commerce in weights, measures and other goods which are sold or distributed by weight, measure or number, to provide for matters connected therewith or incidental thereto. Goods sold should not be underweight. Standard weighting equipments should be used to measure goods.

· Trade Description Act, 1968: It means deliberately giving misleading impression about the product is illegal. The Act makes it a criminal offence to apply a false trade description to goods. The Act covers descriptions given both verbally and in writing. It covers any factual statement about the physical qualities of the product, e.g. size, capacity, performance, place of manufacture and previous history.

· Consumer Credit Act, 1974: According to this Act, consumers should be given a copy of the credit agreement and should be aware of the interest rates, length of loan while taking a loan. The Act also regulates what may be taken as security, limits the ways in which credit organisations can advertise and gives the county courts the ability to intercede in the case of unfair or unjust credit agreements. It also gives additional rights to the debtor, including certain limited rights to cancel concluded agreements.

· Sale of Goods Act, 1979: According to the Act, it is illegal to sell products with serious flaws or problems and goods sold should conform to the description provided. The Act applied to contracts where property in ‘goods’ were transferred or agreed to be transferred for a monetary consideration, in other words: where property (ownership) in personal chattels was sold.

NATURAL ENVIRONMENT

Business is interconnected with nature in two ways. Firstly, business gets its raw materials from the nature, whose quality and availability can affect the business to a large extent. Secondly, natural calamities which are uncontrollable and uncertain, can bring disaster for the business.

The analysis of the mega environment must also cover aspects like extent of endowment of natural resources in the country, ecology, climate, etc. These constitute the natural environment.

In today’s nature disturbances, upcoming of global warming and other hazardous issues to the environment, companies around the world are integrating environmental interest with business and are becoming proactive in finding ways to reduce environmental impact. Additionally, consumers are favouring businesses that contribute to protecting natural resources. These interconnections are explicit domains where business is heavily implicated.

There are no hard and fast rules with regard to location of plant. In practice, a large number of factors have to be considered while choosing a suitable location. Moreover, these factors differ from situation to situation and from time to time.

ENVIRONMENT SCANNING TECHNIQUES

It is essential for a company to understand the environment in which it is working, in order to stand and survive in the market. The understanding of environment can be meant as environmental scanning. This environmental scanning is used by the companies to judge its position among its competitors. It helps to identify positive points and negative points, that is, strengths and weaknesses of the company. It provides knowledge about the upcoming opportunities and threats to the company. Thus, environmental scanning gives a proper base to the company for looking its current position and improving for the better. It shows the scope of betterment in future.

There are various techniques of environmental scanning, each having its own usefulness but having some drawbacks at the same time.

SWOT ANALYSIS

SWOT analysis is an acronym of Strengths, Weaknesses, Opportunities, Threats. It is the simplest technique of all because it does not take much time and doing it forces the management to think about the company in a whole new way. SWOT analysis is calculated by a SWOT matrix.

SWOT analysis, as per the name suggests, helps company to identify its strengths and weaknesses, understand and grab the opportunities on the way and taking precautions against threats that may harm it.

Strengths and weaknesses are the internal factors of the company which can be changed from time to time but not without some work. Opportunities and threats are the external factors which cannot be changed nor there is any control over them.

Areas typically considered in the internal factors include financial resources, human resources, physical resources, access to natural resources, and current processes.

Some example of strengths, as an internal factor, that a company can consider are patents, strong brand names, good reputation among customers, cost advantages from proprietary know-how, exclusive access to high grade natural resources, favourable access to distribution networks. Some example of weaknesses, as an internal factor, that a company can consider are lack of patent, weak brand names, poor reputation among customers, high cost structure, lack of access to the best natural resources, lack of access to key distribution channels.

Areas typically considered in the external factors include market trends, economic trends, funding, demographics, relationships with suppliers and partners, and, political, environmental and economic regulations.

Some example of opportunities, as an external factor, includes an unfulfilled customer needs, arrival of new technology, loosening of regulations, removal of international trade barriers. Some example of threats, as an external factor, that a company can face include shifts in consumer tastes away from the firm’s products, emergence o f substitute products, new regulations, international trade barriers.

It is important to study SWOT analysis to determine the status of the company and providing for better future.

ENVIRONMENT THREAT AND OPPORTUNITY PROFILE(ETOP)

ETOP is the acronym of Environment Threat and Opportunity Profile. It is an environmental scanning technique in which environment is divided into different sectors and then impact of each sector is analysed separately. The impact is measured on three measures of scale: positive, negative, neutral, marked as +,-,0 respectively.

ETOP considers the environmental information and determines relative impact of threats and opportunities, for the systematic evaluation of environmental canning. It helps organization to identify opportunities and threats and to consolidate and strengthen organization’s position. It provides the strategists of which sectors have a favourable impact on the organization.

Some of the environmental factors that can be covered while undergoing ETOP analysis includes political factors, legal factors, economic factors, social factors and alike.

The strategic managers must keep focus on following dimensions:

· Issue selection

Focus on issues which have been selected, should not be missed as there is a probability of landing at incorrect practices. Some of the important issues may be related to market share, competitive pricing, customer preferences, technological change, economic policies, competitive trends, etc.

· Accuracy of data

Data should be collected from good sources otherwise the entire process of ETOP may fail. The relevance, importance, manageability, variability, and low cost of data are some of the important factors to be kept in focus.

· Flexibility in operations

Due to uncertainty in business situations, a company will be benefited by devising proactive and flexible strategies in their plans, structures, strategy, etc.

· Impact study

It should be conducted focusing on the various opportunities and threats and the critical issues selected. Efforts must be made to make the assessment more objective.

ORGANIZATIONAL CAPABILITY PROFILE(OCP)

OCP is the acronym of Organizational Capability Profile. It is summarized statement which provides overview of strengths and weaknesses in key result areas likely to affect future operation of the organization. Information in this profile may be presented in qualitative terms or quantitative terms.

The organizational capability profile is drawn in the form of a chart. The strategists are required to systematically assess the various functional areas and subjectively assign values to the different functional capability factors and sub factors along a scale ranging from values of -5 to +5.

After the preparation of OCP, the organisation is in a position to assess its relative strength and weaknesses vis-a-vis its competitors. If there is any gap in area, suitable action may be taken to overcome that. OCP shows the company’s capacity. OCP tells about company’s potential and capability. OCP tells what company can do.

STRATEGIC ADVANTAGE PROFILE(SAP)

SAP is the acronym of Strategic Advantage Profile. It is a summary statement, which provides overview of the advantages and disadvantages in key areas likely to affect future operations of the firm. It is a tool for making a systematic evaluation of the strategic advantage factors, which are significant for the company in its environment. The preparation of such a profile presupposes detailed analysis and diagnosis of the factors in each functional area.

SAP describes the organisation’s competitive position in the market place. It indicates what the organisation has done or is doing in comparison to its competitors to generate competitive advantage for itself. It is external-oriented.

INTERACTION MATRIX – PORTER’S FIVE FORCES OF MODEL

Source: www.tutorialspoint.com

The mix, character and power of the competitive forces operating in a company’s industry varies from one industry to another. The most powerful tool used for systematically diagnosing the basic competitive pressures in a market and assessing strength, weakness, opportunities and threats, is the five-forces model of competition.

Five forces model of competition was developed by Harvard Business School’s Michael E. Porter in 1979. It emphasizes on the five important factors that help determine whether or not a business can be profitable on the basis of the present strategy it is following. The strategy the business follows is what ultimately drives competition and profitability and not on what product or services it is providing.

RIVALRY AMONG EXISTING COMPETITORS

In today’s cut-throat market, competitors are prone to use whatever weapons they have in their business to attain better market positions and earn good profits as well as brand loyalty. The challenge is to adopt a competitive strategy that produces competitive edge over rivals. This strategy consists of offensive and defensive moves, action and reaction patterns, adjust and readjust process. Thus, the current leaders of the market cannot be very sure of their continued leadership in future.

Rivalry gets stronger when competitors are active in making strategies against strategies, moves after moves. Competition increases as the products of rival sellers become more standardized and diminishes as the products of industry rivals become more strongly differentiated. Competitors to stand in market, thus, should have diverse strategies and objectives.

THREAT OF NEW ENTRANTS

Val Renault, Section 14. SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats, Retrieved from http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main

Tim Berry, What is a SWOT Analysis?, Retrieved from http://articles.bplans.com/how-to-perform-swot-analysis/

SWOT Analysis, Retrieved from http://shodhganga.inflibnet.ac.in/bitstream/10603/59535/7/07_chapter%201.pdf

Smriti Chand, Environmental Threat and Opportunity Profile, Retrieved from http://www.yourarticlelibrary.com/organization/environmental-threat-and-opportunity-profile-%D0%B5%D1%82%D0%BE%D1%80/23557/

ETOP Analysis, Retrieved from http://www.bbamantra.com/etop-environmental-threat-and-opportunity-profile/

BMS Team, Organizational Capability Profile, Retrieved from http://www.bms.co.in/organizational-capability-profile-ocp/

Strategic Management – Environmental Scanning Techniques – Notes – Business Management, Study notes for Business Administration. Banaras Hindu University,Business Administration, Retrieved from http://www.docsity.com/en/strategic-management-environmental-scanning-techniques-notes-business-management/52577/

Jim Makos, Political factors affecting business, Retrieved from http://pestleanalysis.com/political-factors-affecting-business/

Alex Pirouz, The Impact of Technology in Business, December/January 2012 issue of Business Review Australia magazine

Andrew J. Hoffman and Susse Georg, INTRODUCTION TO BUSINESS AND THE NATURAL ENVIRONMENT A history of research on business and the natural environment: conversations from the field, Retrieved from http://webuser.bus.umich.edu/ajhoff/pub_academic/2013%20Routledge%20Intro-2.pdf

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Privacy Overview

• Key Differences

Know the Differences & Comparisons

Difference Between Micro and Macro Environment

While microenvironment has a direct impact on business activities, the macro environment is a general business environment, which influences all business groups at large. It is important to learn the business environment, so as to understand the effect of various forces on business. Take a read of the given article to know the difference between microenvironment and macro environment.

Content: Micro Environment Vs Macro Environment

Comparison chart, definition of micro environment.

Microenvironment refers to the environment which is in direct contact with the business organization and can affect the routine activities of business straight away. It is associated with a small area in which the firm functions.

The microenvironment is a collection of all the forces that are close to the firm. These forces are very particular for the said business only. They can influence the performance and day to day operations of the company, but for the short term only. Its elements include suppliers, competitors, marketing intermediaries, customers and the firm itself.

Micro Environment

• Suppliers are the ones who provide inputs to the business like raw material, equipment and so on.
• Competitors are the rivals, which compete with the firm in the market and resources as well.
• Marketing intermediaries may include wholesalers, distributors, and retailers that make a link between the firm and the customers.
• Customers / Consumers are the ones who purchase the goods for their own consumption. They are considered as the king of business.
• The firm itself is an aggregate of a number of elements like owners like shareholders or investors, employees and the board of directors.

Definition of Macro Environment

The general environment within the economy that influences the working, performance, decision making and strategy of all business groups at the same time is known as Macro Environment. It is dynamic in nature. Therefore it keeps on changing.

It constitutes those outside forces that are not under the control of the firm but have a powerful impact on the firm’s functioning. It consists of individuals, groups, organizations, agencies and others with which the firm deals during the course of its business.

Macro Environment

The study of Macro Environment is known as PESTLE Analysis. PESTLE stands for the variables that exist in the environment, i.e. Political, Economic, Socio-cultural, Technological, Legal and Environmental. These variables, consider both economic and non-economic factors like social concerns, government policies, family structure, population size, inflation, GDP aspects, income distribution, ethnic mix, political stability, taxes, and duties, etc.

Key Differences Between Micro Environment and Macro Environment

The following are the major difference between micro and macro environment:

• The microenvironment is the environment which is in immediate contact with the firm. The environment which is not specific to a particular firm but can influence the working of all the business groups is known as Macro Environment.
• The factors of the microenvironment affect the particular business only, but the macro-environmental factors affect all the business entities.
• The microenvironmental factors are controllable by the business but to some extent only. However, the macroeconomic variables are uncontrollable.
• The elements of the microenvironment affect directly and regularly to the firm which is just opposite in the case of the macro environment.
• The study of the microenvironment is described as COSMIC analysis. Conversely, PESTLE Analysis is a study of the macro environment.

Video: Micro Vs Macro Environment

Microenvironment and macro environment, both cover the overall environment of business. So, they are more complementary rather than contradictory. The study of these environments will help to know the strength, weakness, opportunity and threat of business.

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Preksha says

January 12, 2017 at 11:34 am

Wonderfully written.

January 12, 2017 at 11:35 am

In which category would service provider come?

Surbhi S says

January 12, 2017 at 12:15 pm

samuel onyema says

March 23, 2019 at 3:11 am

can you help me with the Harvard referencing of your journal Difference between micro and macro environment

luthando says

January 23, 2017 at 12:48 am

Wonderfully written it makes sense

Timothy says

March 4, 2017 at 9:03 pm

Adane zewude says

March 22, 2023 at 5:24 am

Good view and written excellent definition

ntongo dianah says

May 31, 2017 at 2:49 pm

thank you it was on important value for my research

Siddharth Deshpande says

December 20, 2017 at 8:19 pm

Thank you so much for the article! Very well stated!

Arjit Sawhney says

February 19, 2018 at 3:56 pm

Far better than reading boring books with so much repetition. Thank you 🙂

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February 23, 2018 at 4:48 pm

Its helpful for my assignment

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April 11, 2018 at 10:22 pm

Well written & easy to understand

February 11, 2019 at 2:56 pm

Well written and it will definitely assist with my strategy module this year. thank you.

February 23, 2019 at 4:30 am

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July 2, 2019 at 3:08 pm

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July 8, 2019 at 1:04 am

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Maureen says

August 17, 2019 at 10:30 pm

The micro and macro environment that influence the business. I require reasons. please help me sir.

March 25, 2020 at 10:34 pm

helpfull but i have to relate this to law enforcement enviroment

help with Havard referencing

Isagani says

November 27, 2020 at 5:26 am

Thank you. It’s a big help to my research

November 29, 2020 at 5:51 pm

This is a very, very clear article that has clarified the differences between the micro and macro environment. I found the advice to think of the environments as complementary rather than contradictory to be especially helpful. Thank you!

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December 8, 2020 at 8:34 am

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You are here, micro essay lesson plan.

GRADE LEVEL

High School

Students will practice short form nonfiction writing by composing a micro essay describing how a piece of literature has influenced their understanding of the world around them. 

ANCHOR STANDARDS

CCSS.ELA-LITERACY.CCRA.W.3 CCSS.ELA-LITERACY.CCRA.W.4 CCSS.ELA-LITERACY.CCRA.W.5

PENNSYLVANIA CORE STANDARDS

ELA CC 1.4 B ELA CC 1.4 E ELA CC 1.4 F

• Stories can shape our perspective on the world around us.
• Writing is a multi-step process that involves gathering ideas, drafting, revising, editing, and rewriting.

ESSENTIAL QUESTIONS

• How do writers vary writing when they compose for specific purposes and audiences?
• How does the writing process strengthen writing?
• How do writers use figurative and/or descriptive language to impact an audience?
• Precision of language and the use of specific vocabulary are key factors to consider when writing.
• Writing is a recursive process.

Theme Support Evidence Influence Voice Prose Poetry Cliché Colloquialism

Simple Sentence Compound Sentence Complex Sentence Imagery Audience Metaphor Simile Hyperbole

Synonym Tone Mood Fragmentation Repetition Action Verb Passive Voice

COMPETENCIES

• Use the writing process to develop and strengthen writing.
• Incorporate vivid and sensory details through word choice and literary devices.
• Compose short form nonfiction with a sharp, distinct focus.

Writing utensil Paper Sticky notes Tape/tacks for wall (optional) Computers with Internet Access (optional) Micro Essay Rubric (optional)

SUGGESTED ONLINE RESOURCES

Brevity: A Journal of Concise Literary Nonfiction (" The Watch " by Lisa Groeb Braner)

SUGGESTED INSTRUCTIONAL PROCEDURES

The structure of a micro essay is used in many places: exams, presentations, application essays, blog posts, abstracts, and elevator pitches. Micro essays, or flash essays, utilize the classic essay form while highlighting the importance of word choice and clarity. Over the course of this lesson, students will be guided through a freewrite, draft, and and revision to create a piece under 500 words that responds to the prompt: "Describe how a piece of literature (fiction/nonfiction/poetry/play/graphic novel) has redefined your behavior, attitude, worldview, and/or personal perspective.”

CLASS PREPARATION

Prior to class, ask students to identify three pieces of published literature that resonate with them. These pieces could be fiction/nonfiction books, graphic novels, plays or poetry, but should be selected for their influence on the students. Request that they return to class with the titles of three pieces of literature. If available, invite the students to bring the texts to class.

BRAINSTORM/FREEWRITE

Begin class with a freewriting exercise. Each student will need several pieces of blank paper and a writing utensil. If desired, students may also type responses. Reminding students that they were asked to identify three pieces of literature, ask students to write the titles at the top of the page.

Establishing a focus.  Have students take a moment to quietly consider the three literary items they have chosen:

• Why are these important to you?
• How do/did they resonate with you?
• How do these pieces of literature link to something within your life, your past, or your future?

Write these questions in a space where students can see them clearly and refer to them when freewriting.

Freewrite. Given these questions. invite students to freewrite (Elbow, 1-7) as follows:

Write for 7-10 minutes without stopping, rereading, or talking. Ignore all rules of grammar. Do not feel the need to write in complete sentences or with proper spelling. The goal is to get subconscious thoughts onto paper and increase the flow of thought. Even if one’s train of thought wanders, write the titles of three pieces repeatedly until the flow of ideas returns. Keep writing for the entire time.

As the teacher keeps track of the allotted time, students are to quietly freewrite. In the final minutes, invite students to finish their thoughts and set their pencils/pens down.

Review your writing . Take a few minutes and ask students to read their writing. Do their literature selections have anything in common? Any common thread or theme? Ask students to circle phrases or descriptions that they like. Invite students to share the common thread, fun phrases, or descriptions that emerged with the class.

Select one . Ask students: Which piece did you enjoy writing about more than others? Select one title and write it at the top of a new sheet of paper.

Invite students to linger on that piece of literature:

• Envision the text – feel the heft of the book, see the cover or graphic art, imagine watching the play performance or hearing the poetry.
• Recall the content of the piece. What stands out to you – the characters, language, or themes?
• Consider the time period in which you read the piece of literature. Memories are often fragmented – what images, emotions, people, or settings come to mind?
• How did the literature influence your understanding of the world around you? How did it challenge a belief, offer insight, or change your perspective?

Again, write these questions in a place where students can see them during the second freewrite.

Second freewrite. In this freewrite, the focus is on conveying the essence and importance of a selected piece of literature. Again, ask students to write for 7-10 minutes and conclude with an invitation to complete their thoughts.

Reread. Ask students to review their freewriting:

• What phrases or images appeal to you?
• Circle or highlight these to reference later when writing your first draft.

Think-Pair-Share . Either with a partner or as a class, invite students to share a bit of their freewrite:

• What piece of literature did you choose?
• How does this piece of literature speak to you?
• The process of writing activates a retrieval process. What did you uncover, connect, or learn while writing?

TRANSITION TO MICRO ESSAY

These freewrites provide an initial planning thought process for the composition of a micro essay. A micro essay is a form of expository writing. It is a framed snapshot that emphasizes the economy of expression. In utilizing shorter paragraphs, the writer’s word choice and sentence structure become essential elements in the succinct communication of ideas.

For this micro essay, invite students to respond to the prompt:

Describe how a piece of literature (fiction/nonfiction/poetry/play/graphic novel) redefined your behavior, attitude, worldview, and/or personal perspective.

As with any form of writing, knowing the conventions of the form and practicing will improve writing. Share examples of micro essays. These could be from PACFTB Wordstruck , application essays, or selections from Brevity (consider “ The Watch ” by Lisa Groeb Braner).

Micro essays often open with little introduction and a great first sentence. The content, while minimal, is focused and the details provided create an image or emotion for the reader. In some instances, the writing follows an hourglass structure: opening with a broad statement or image, quickly narrowing to a distinct focus, and then connecting and ending broadly once again. The voice of the writer is distinctive and reflects a well-defined perspective.

Establishing first draft. In one sentence have students answer how this piece of literature redefined them. This sentence should guide the focus of the micro essay. The content of the micro essay will reveal the impact of the piece of literature on the writer. Writers are to assume that the audience is familiar with the selected piece of writing. Any references to the chosen text are to be used for illustration or connection.

Ask students to write the first draft in one sitting. The completed draft should be 300-500 words (approximately one page, single-spaced in 12-pt font). Concentrate only on a few select details that illustrate how the writer’s behavior, attitude, worldview, or personal perspective were altered by the piece of literature.

Homework. With a completed first draft, ask students to review their writing in a series of readings. This focused revision process examines content and organization as well as word choice. If desired, students can consider a third reading to focus upon style. As an alternative to homework, teachers may select to pair students together or to create stations for focused feedback using these criteria.

The feedback from these readings should be used to compose a final draft.

First Reading: Content and Organization

Goal: confirm the essay is focused, contains illustrative examples, and maintains reader interest.

• Assume that readers are familiar with the text. Does the writing avoid summarizing the selected piece of literature?
• Are there concrete personal examples that illustrate how this piece of literature redefined the writer?
• Does the piece alter sentence structure to maintain interest (simple sentences, compound sentences, and complex sentences)?

Second Reading: Word Choice

Goal: confirm the essay is within word count and that word choice contributes to meaning and impact.

• Consider the impact of revising for brevity. Does every sentence contribute to meaning? Omit duplicated concepts, excess explanations, clichés, and colloquialisms.
• Review nouns and verbs for clear and precise word choice.
• Review the verbs, are they action verbs? Circle conjugations of to be (am, is, are, was, were). Can sentences be written differently to remove the passive voice?

Bonus Reading: Style

Goal: refine the writing to enhance imagery, emotion, and voice.

• Micro essays benefit from detail and imagery. What should your readers feel or know at the end of the piece? Consider how the use of literary devices, imagery, and pacing can influence the experience of the reader.
• Simile and metaphor can deepen meaning or add personality. Consider how the use of sensory words, hyperbole, or simple repetition can enhance the desired tone and mood.
• Concentrate on a few select details to create a single impression.

Gallery Walk . Remove names from final drafts and place the texts around the room, either on the wall or on desks to create a micro essay exhibit. Allow space for students to linger without crowding. Distribute five sticky notes to respond to the writing. 

These sticky note responses should assist the writer and offer feedback from the community. Suggested response phrases could be:

• favorite lines/word choices: “I like…”
• questions: “I wonder…”
• connections: “This reminds me of...”

Students circulate through the “gallery” silently or with minimal conversation. When the allotted time has expired (approximately 20 minutes), ask students to return to their writing to review comments.

In a virtual setting, a gallery walk can be created through a shared document or storyboard.

Alternatives:

• At times content can be personal. Students may select to have one or more entrusted readers review and comment upon their writing.
• Using the optional rubric , students can review and grade a selected number of peer essays.
• The optional rubric can be used for formal grading.

EXTENSION/FURTHER STUDY

Invite students to:

• Submit to a flash nonfiction journal .
• Create a nonfiction journal as a class.
• Compose a letter to the author/poet/playwright of the selected piece of literature accompanied by the micro essay.

Braner, Lisa Groen. “ The Watch .” Brevity , Issue 33, Summer 2010.

Elbow, Peter. Writing Without Teachers . New York: Oxford UP, 1973, 1-7.

McClanahan, Rebecca. " The Soul of Brevity: Thirteen Ways of Looking at the Brief Essay ." Tampa Review , no. 43, 2012, pp. 117-123,155. 

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25 Important Marketing Environment Questions and Answers [Notes with PDF]

The second chapter of our marketing learning course is “ Marketing Environment”. In this article, we’ll learn the 25 most important marketing environment questions and their answers.

If you read every question and its answers carefully, you will be able to prepare for the marketing course in a very good way.

You can read the first chapter of our free “ Marketing learning course ” here if you missed it.

• 30 Important Introduction to Marketing Questions and answers [Notes with PDF]

By reading this post, you may quickly prepare for any competitive tests such as school and college exams, vivas, job interviews, and so on.

So let’s get started…

Marketing Environment Questions and Answers:

The following are the 25 important marketing environment questions and answers:

Question 01: What is the environment?

Answer: The surrounding conditions, elements, or forces of a place or region in which people live and an organization is engaged in achieving its objectives are referred to as the environment.

On the one hand, there are natural elements such as topography, climate, rivers, hills, mountains, and forests, among others.

On the other hand, unnatural elements such as education-culture, science-technology, law, economy, religious beliefs, politics, and so on exist.

In a nutshell, the environment refers to all of the natural, social, and economic elements that surround man and are necessary for his survival.

Question 02: What is the concept of a “marketing environment”?

Answer: External and potential forces and entities that influence the marketing of products, services, or ideas are referred to as marketing environments.

The marketing environment includes factors such as buyers, sellers, suppliers, people, the country’s social, cultural, and political conditions, and so on that influence marketing activities.

That is, the marketing environment is comprised of a variety of external factors and forces that affect marketing management’s ability to build and maintain successful relationships with the intended consumers.

Question 03: What is the relationship between the environment and the marketing environment?

Answer: The environment encompasses the soil, air, plants, animals, rivers, moon, sun, human behavior, race, religion, education, language, culture, government, a system of governance, and so on that surround us.

In contrast, the marketing environment is regarded as a component of the overall environment.

An organization’s marketing environment consists of the elements that influence product marketing.

On the other hand, the natural environment, such as soil, air, rivers, and so on, affects the marketing environment; on the other hand, the unnatural environment, such as buyers, sellers, the country’s social, cultural, and political conditions, technology, and so on, affects the marketing environment.

Because the marketing environment is a component of the overall environment, it is greatly influenced by it and has a close relationship with it.

Question 04: Why is it important to study the marketing environment?

Answer: The following are the benefits of studying marketing:

• Recognizing and anticipating business trends
• Recognizing threats and opportunities
• Long-term planning
• Keeping up with the competition
• Recognizing Changes
• Situational adaptation
• Gathering information
• Immediate assessment of the situation
• Recognizing one’s own strengths and weaknesses
• Establishing guidelines
• Foreseeing problems
• Marketing and Society

Question 05: What are the types of marketing environments?

Answer: The types of marketing environment are as follows:

• Micro Environment
• Intermediaries
• Competitors

2. Macro Environment

• Demographic
• Technological

Question 06: What is the micro-environment?

Answer: The micro-environment consists of the controllable aspects, strengths, and elements of the marketing environment.

The controllable parties, energy, and material that directly affect the marketing activities are called micro-environments.

Such aspects of the environment, energy, and surrounding elements directly influence marketing operations. In this case, the behavior of the smallest elements of the marketing environment and their functions are discussed separately.

That is, the micro-environment includes all of the forces that are closely associated with the company and have an impact on its customer services capacity, such as suppliers, marketing intermediaries, buyer markets, competitors, and the population.

Question 07: Why is the micro-marketing environment controllable?

Answer: The micro marketing environment refers to the controllable parties, energy, and materials that have a direct impact on marketing activities.

Companies, suppliers, intermediaries, buyers, competitors, populations, and so on are all components of a micro-marketing environment.

These environmental elements are under the marketer’s direct or indirect control. For example, the company has direct control over all departments and surfaces.

Furthermore, direct control can be imposed on any of the other elements, as well as indirect control on any of them. As a result, the micro-marketing environment can be said to be under the control of direct or indirect marketers.

Question 08: What is the macro-environment?

Answer: All elements of the macro marketing environment are driven by external and uncontrollable forces. The overall environment can create both risks and opportunities for the company.

Therefore, the macro environment is the combined effect of uncontrollable energy that indirectly affects marketing activities.

That is, the macro environment is made up of the forces that influence the micro-environment from the largest society, the population, economic, natural, technological, political, and cultural forces.

Question 09: What are the elements of the micro-environment?

Answer: The elements of the micro-environment are as follows:

Question 10: What are the elements of the macro-environment?

Answer: The elements of the macro-environment are as follows:

• Demographic environment
• Economic environment
• Natural environment
• Technological environment
• Political and social environment
• Cultural environment

Question 11: Why are the elements of the macro environment uncontrollable?

Answer: The term “macro environment” refers to the uncontrollable energy that has an indirect impact on marketing activities.

Demography, the economy, nature, technology, politics, society, culture, and so on are examples of macro-environmental elements. Some of these elements are God-given, while others are man-made.

The marketer cannot, under any circumstances, control the ingredients alone. Although some aspects of the macro environment may be affected collectively, it is not possible for the marketer to do so alone.

As a result, the macro environment of marketing is uncontrollable.

Question 12: How does the environment affect marketing?

Answer: The environment has an impact on marketing functions both directly and indirectly. The surrounding conditions, elements, or forces of a place or region in which people live and an organization is engaged in achieving its objectives are referred to as the environment.

Market research, purchasing, selling, transportation, warehousing, advertising, and other marketing activities are examples of marketing activities.

The environment has a significant impact on each of these jobs.

As an illustration. Marketing activities in the hilly, desert, and plain areas will never be the same. Again, the marketing functions of the economically developed world and the economically underdeveloped world must be distinct.

That is to say, the environment has an impact on every marketing act.

Question 13: What impact do competitors have on product marketing?

Answer: Competitors are those who have an impact on an organization’s marketing activities by offering similar products or services.

Marketing is heavily influenced by competitive products. The competitor attempts to create a positive attitude toward their products among buyers through various activities such as quality, price, advertisement, sales promotion, and so on.

Buyers are drawn to competitive products as a result of this. Adopt marketing strategies that take into account your competitors’ current and potential strengths, abilities, and weaknesses.

Question 14: How does the company influence marketing?

Answer: A company is a legal entity made up of a few people. A company has various departments. Purchase departments, sales departments, manufacturing departments, finance departments, R&D departments, accounting departments, marketing departments, and so on.

The work efficiency of these interdependent departments is critical to the company’s efficiency and reputation.

The activities of all these departments are controlled by the top management. Top management determines the company’s goal-objective strategy and policy.

According to the decision of the top management , the marketing department prepares the plan and arranges it for its implementation.

Marketing is one of the most important parts of the company. The functions of the marketing department are conducted with the help of other departments.

This department tries to increase the sales of the product and gives necessary advice to the production department to improve the quality of the product.

The job of the research and development department is to improve the quality of existing products and create new products.

This work is done through effective communication with the production department.

The purchasing department arranges for the supply of the necessary materials to the company.

The finance department arranges the necessary funds. The job of the accounting department is to calculate the cost and profit loss.

 In this way, all the departments of a company help in implementing the plans and activities of the marketing department

The company’s microenvironment is formed by the dedication and work coordination of the employees in the relevant department.

Question 15: How does the supplier influence marketing?

Answer: Various materials are required for the company’s smooth operation. Suppliers are individuals or organizations who provide all of the materials for the company.

Failure to deliver required materials on time disrupts operations and tarnishes the company’s reputation.

This is why marketing skills depend on the activities of suppliers. The company can determine the supplier as required.

Marketers can exert control over the environment by working with a variety of suppliers.

Question 16: How do the intermediaries influence marketing?

Answer: Intermediaries are individuals or organizations that deliver the company’s products to the final consumer or users.

For example, wholesalers, retailers, distributors, representatives, etc.

The smooth operation of intermediaries is important to the sale of goods. Intermediaries must be recruited and motivated in order to significantly expand the product market.

Product marketing is carried out by various types of intermediaries.

The company’s marketing skills depend on their cooperation. Therefore, in determining the middlemen, it is necessary to consider their efficiency, cost, quality of services provided, etc.

This is because their activities greatly influence the structure of the company’s work environment.

Question 17: How do the competitors influence marketing?

Answer: Competitors are business rivals who usually offer similar products or services.

That is to say, the marketing activities of an organization that are influenced by other similar products or service offers are called competitors.

Competing companies try to sell products to similar buyers. The company has to deal with different types of competitors.

The marketers must contend with competitors.

To survive in the competition, the marketer must identify the competitors, understand their strategies, and tailor his own strategy accordingly.

Because the organization’s success is dependent on using a marketing strategy that is consistent with the competitors.

The marketing activities of the company depend on the number, type, and activities of the competitors.

Question 18: How do People influence Marketing?

Answer: People are individuals who have a direct impact on the operations of the company.

For example, the financial population, media population, government population, civic activities population, local population, general population, and internal population.

Certain populations can help a company achieve its objectives faster. If the people do not assist, the company’s operations are adversely affected.

The attitude of the people and the buyers have to be taken into consideration while formulating the marketing plan of the company.

Companies can expect feedback from specific populations.

The company must establish and maintain positive relationships with these communities in order to create a favorable environment.

Question 19: How does the customer influence marketing?

Answer: A customer is a person or organization that buys goods or services from a store or business organization. So the marketing organization has to know the details about the customers.

There are different types of customers in the market and their buying behavior is different.

As a result, the marketer has to adapt the marketing activities according to the characteristics of the buyer’s market.

For example, consumers purchase goods or services for personal or family consumption, and business buyers purchase goods or services for reprocessing or use in the manufacturing process.

Reseller market buyers purchase goods or services for profit through resale, government market buyers purchase goods or services for the purpose of maintaining public service activities or transferring them to others.

On the other hand, buyers in the international market are foreign consumers, producers, resellers, or the government.

 Each of the mentioned markets has specific characteristics through which marketing activities are affected. These are marketing responsibilities that need to be carefully considered.

Question 20: How does the demographic environment influence marketing?

Answer: Demographic environment is the most important consideration for a marketer, as the marketer conducts all activities by involving the people.

Moreover, people are the main component of the market for goods or services. As one of the elements of the environment, population influences marketing.

Population size, density, age, religion, caste, occupation, etc. are the elements of this environment.

The elements of the demographic environment that influence the marketing of goods and services are:

• Changes in the age structure of the population
• Family lifestyle changes
• Changes in the geographical location of the population.
• Impact of education and profession
• Increase diversity

Question 21: How does the economic environment influence marketing?

Answer: The economic environment is the sum of the external factors that affect the purchasing power of consumers and the type of expenditure on a country’s economy.

The elements of the economic environment have an impact on the purchasing power of the consumer and the type of expenditure.

So the marketer has to keep an eye on the consumption trend of consumers in his country and world market and the type of expenditure.

The two things that marketers need to keep an eye on are:

• Changes in consumer income and
• Changes in the type of consumer spending

Lately, there has been a change in the economic components. For example, economic factors have greatly changed people’s income, living expenses, interest rates, types of savings and loans, marketplace, and so on. Companies focus on these elements for economic forecasting.

Question 22: How does the natural environment influence marketing?

Answer: The natural environment is the environment that is formed by various natural elements such as rivers, canals, seas, mountains, climate, topography, etc.

Consumer awareness of the natural environment has greatly increased. Water pollution levels in many cities around the world have reached alarming proportions.

Countries around the world have become aware of global warming and environmentalists are also vocal about its dire consequences.

This is why marketers need to know about the three types of trends in the natural environment. These are:

• Shortage of raw materials,
• Levels of environmental pollution and
• Government intervention

Question 23: How does the technological environment influence marketing?

Answer: The technological environment is the result of combining science and technical education, related research, advanced technology use, technology import opportunities, and so on.

The use of technology affects the marketing environment. The forces of innovation in new technologies, the creation of new products and markets and opportunities, etc. have an impact on the marketing environment.

However, the technological environment is changing rapidly. New technology creates new markets and opportunities.

Every new technology removes the old technology from the market. So the marketer should get used to the technical environment and monitor it closely.

Companies that can’t keep up with the technological environment see their products quickly become obsolete.

Question 24: How does the Political and Social environment influence marketing?

Answer: The political and social environment is made up of the activities of various government agencies and social interest groups that influence marketing activities.

The political environment includes factors such as government stability, political ideology, vision, policies, and programs, transparency, accountability, people’s political thinking, and the country’s law and order situation, among others.

The political situation has a significant impact on marketing activities. Marketers must be aware of the various laws and ordinances that govern their industry, and they must conduct their marketing activities in an ethical and socially responsible manner.

Question 25: What is the difference between Micro-environment and Macro environment?

Answer: The 3 most important differences between Micro-environment and Macro environment are as follows:

• The elements of the micro-environment are companies, suppliers, marketing intermediaries, buyers, competitors, and the population. On the other hand, the elements of the macro-environment are economic, natural, technological, political, and cultural.
• The elements of the micro-environment directly affect the marketing activities, while the elements of the macro environment indirectly affect the marketing activities.
• The scope of the micro-environment is very small, while the scope of the macro-environment is very wide.

I hope that by the end of this post, you have a good understanding of the “Marketing Environment” chapter. If you have any doubts or questions, don’t hesitate to contact us or leave a comment so that we can respond soon.

You can also read:

• 35 Important Functions of Marketing Questions and Answers [With PDF]
• 25 Important Market Segment Questions and Answers [With PDF]
• 25 Important Marketing Mix Questions & Answers [With PDF]
• 25 Important Pricing Products Questions and Answers [With PDF]

3 thoughts on “25 Important Marketing Environment Questions and Answers [Notes with PDF]”

Great quiz it helps you understand the unit well

Was helpful to me in my career as a marketer Thanks alot

Having read this, I thought it was very informative. I appreciate you spending some time and energy to put this information together. It was still worth it!

Comments are closed.

Essay on Environment for Students and Children

500+ words essay on environment.

Essay on Environment – All living things that live on this earth comes under the environment. Whether they live on land or water they are part of the environment. The environment also includes air, water, sunlight, plants, animals, etc.

Moreover, the earth is considered the only planet in the universe that supports life. The environment can be understood as a blanket that keeps life on the planet sage and sound.

Importance of Environment

We truly cannot understand the real worth of the environment. But we can estimate some of its importance that can help us understand its importance. It plays a vital role in keeping living things healthy in the environment.

Likewise, it maintains the ecological balance that will keep check of life on earth. It provides food, shelter, air, and fulfills all the human needs whether big or small.

Moreover, the entire life support of humans depends wholly on the environmental factors. In addition, it also helps in maintaining various life cycles on earth.

Most importantly, our environment is the source of natural beauty and is necessary for maintaining physical and mental health.

Get the huge list of more than 500 Essay Topics and Ideas

Benefits of the Environment

The environment gives us countless benefits that we can’t repay our entire life. As they are connected with the forest, trees, animals, water, and air. The forest and trees filter the air and absorb harmful gases. Plants purify water, reduce the chances of flood maintain natural balance and many others.

Moreover, the environment keeps a close check on the environment and its functioning, It regulates the vital systems that are essential for the ecosystem. Besides, it maintains the culture and quality of life on earth.

The environment regulates various natural cycles that happen daily. These cycles help in maintaining the natural balance between living things and the environment. Disturbance of these things can ultimately affect the life cycle of humans and other living beings.

The environment has helped us and other living beings to flourish and grow from thousands of years. The environment provides us fertile land, water, air, livestock and many essential things for survival.

Cause of Environmental Degradation

Human activities are the major cause of environmental degradation because most of the activities humans do harm the environment in some way. The activities of humans that causes environmental degradation is pollution, defective environmental policies, chemicals, greenhouse gases, global warming, ozone depletion, etc.

All these affect the environment badly. Besides, these the overuse of natural resources will create a situation in the future there will be no resources for consumption. And the most basic necessity of living air will get so polluted that humans have to use bottled oxygen for breathing.

Above all, increasing human activity is exerting more pressure on the surface of the earth which is causing many disasters in an unnatural form. Also, we are using the natural resources at a pace that within a few years they will vanish from the earth. To conclude, we can say that it is the environment that is keeping us alive. Without the blanket of environment, we won’t be able to survive.

Moreover, the environment’s contribution to life cannot be repaid. Besides, still what the environment has done for us, in return we only have damaged and degraded it.

FAQs about Essay on Environment

Q.1 What is the true meaning of the environment?

A.1 The ecosystem that includes all the plants, animals, birds, reptiles, insects, water bodies, fishes, human beings, trees, microorganisms and many more are part of the environment. Besides, all these constitute the environment.

Q.2 What is the three types of the environment?

A.2 The three types of environment includes the physical, social, and cultural environment. Besides, various scientists have defined different types and numbers of environment.

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