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Micro Environmental Factors

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Micro Environmental Factors

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  • October 2011
  • 496 Words
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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...

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