What are the micro-environment forces? List and briefly explain each of these forces.
The forces that act very close to an organization’ operations, domain and range are known as Micro-environment forces. The organization, its performance, and its decision-making processes get affected by these forces. Customers, suppliers, competitors, marketing intermediaries like wholesalers and retailers etc . are the major forces included in the micro-environment.
Customers- it is the most critical Micro-environment factor in any organization. There is a direct relationship between the revenue and the customers in a company. In case any change occurs in the taste of the customers, it may force the organization to work differently, make new decisions and so on. The prices are decided by the organization according to their customers. The organization perhaps may not be able to charge high prices for its offerings if it is located in an area where the population is generally less.
Suppliers– It is also considered to be one of the critical factors. For the success of the organization, the progress of the supplier is significant. On the arrival of any adverse situation, it may have an impact on the organization. Supplier pricing is said to be the critical input for an organization to decide its prices. If any significant change occurs in supplier prices, the organization profits get directly affected. Sometimes, the organization may need to change its pricing.
Competitors– it is another major micro-environment factor for an organization. One of the most critical factors for an organization is to decide its strategies and operation is based on what its competitors are doing; Hence, if all competitors start offering lower prices for their products, the organization also would be forced to lower its costs.
Marketing intermediaries– it includes wholesaler and retailers, which are also a vital Micro-environment factor for organizations. The business of organizations heavily relies on the operation of their wholesalers and retailers. In case, there is any problem at wholesalers’ or retailers’ end; it would have a direct impact on an organization’s operations.