Micro environmental factors are internal factors close to a business that have a direct impact on its strategy

Micro environmental factors are internal factors close to a business that have a direct impact on its strategy. These factors include:

Customers Organisations survive on the basis of meeting customer needs and wants and providing benefits for their customers. Failure to do so will result in a failed business strategy.

Employees Employing the correct staff and keeping staff motivated is an essential part of an organisation's strategic planning process. Training and development play a critical role in achieving a competitive edge; especially in service sector marketing. This is clearly apparent in the airline industry, where customer services is crucial in obtaining a competitive edge. Suppliers Suppliers provide businesses with the materials they need to carry out their business activities. A supplier's behaviour will directly impact the business it supplies. For example if a supplier provides a poor service this could increase timescales or lower product quality. An increase in raw material prices will affect an organisation's marketing mix strategy and may even force price increases. Close supplier relationships are an effective way to remain competitive and secure quality products. Shareholders As organisations require inward investment to grow, they may decide to move from private to public ownership and list on the stock market. The introduction of public shareholders brings new pressures as public shareholders want a return from the money they have invested in the company. Shareholder pressure to increase profits will affect organisational strategy. Relationships with shareholders need to be managed carefully as rapid short term increases in profit could detrimentally affect the long term success of the business. Media Positive media attention can make an organisation (or its products) and negative media attention can break an organisation. Organisations need to mange the media so that the media help promote the positive things about the organisation and conversely reduce the impact of a negative event on their reputation. Some organisations will even employ public relations (PR) consultants or gurus to help them manage a particular event or incident. Consumer television programmes with a wide and more direct audience can also have a very powerful impact on the success of an organisation. Some businesses recognise this and will change their reaction when consumers mention that they are going to contact a consumer television programme or the newspapers about the business. Competitors The name of the game in marketing is differentiation. Can the organisation offer benefits that are better than those offered by competitors? Does the business have a unique selling point (USP)? Competitor analysis and monitoring is crucial if an organisation is to maintain or improve its position within the market.If a business is unaware of its competitor's activities they will find it very difficult to beat them. The market can move very quickly whether that is a change in trading conditions, consumer behaviour or technological developments. As a business it is important to examine competitors' responses to these changes so that you can maximise the impact of your response.

Macro-environmentDiscuss the following areas of the so-called marco-environment:sa. competitive Environmentb. Demographic Environmentc. Economic Environmentd. Natural Environmente. Technological Environmentf. Political Environmenta. Competitive Environment:includes institutions and other forces that affect the basic values, behaviors, and preferences of the society-all of which have an effect on consumer marketing decisions.b. Demographic Environment: includes the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistical informationc. Economic Environment: consists of all factors-such as salary levels, credit trends, and pricing patterns-that affect consumer spending habits and purchasing power. d. Natural Environment: involves all the natural resources, such as raw materials or energy sources, needed by or affected by marketers and marketing activities.e. Technological Environment: consists of those forces that affect the technology and which can create new products, new markets, and new marketing opportunities.f. Political Environment: includes all laws, government agencies, and lobbying groups that influence or restrict individuals or organizations in the society