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Micro Environmental FactorsTweet
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.
Micro Environmental Factor/Stakeholder Analysis
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