Micro-Environmental Factors Importance

Oct 26, 2020

In the previous blog, we saw how Macro-Environmental Factors affect the business and why it is important for your business. Today we’re going to see that along with  Macro-Environmental Factors, Micro-Environmental Factors are also important for your business.


What are Micro-Environmental Factors?

Micro-Environmental means the environment that has a direct effect on your business. It is connected to the specific region where your company operates and can influence any of your business processes directly. In other words, it consists of all the considerations that concern the company in particular. They have the capacity to influence the company's regular proceedings and general results. However, the influence that they have is not a long-lasting one.


Now, let's dig deeper and understand what are those factors that make up the Micro Environment:

  1. Customers - Customers play a key role for a business as they help to attract and retain the majority of customers to generate sales; regardless of what industry you are in or what products or services your business offers. Organizations must also follow a marketing strategy that attracts new customers and retain current customers by taking into account consumer needs and preferences and by offering after-sales and value-added services.

Nowadays, for a business to be successful, it must find customers for your products/services. Thus, customers become the most important factor in the Micro-Environment of business.   

This is the reason why nowadays business companies are giving more importance to “Customer Satisfaction Reviews”. Now, every business firm is setting up systems to track Customer Attitude and Customer Satisfaction on a regular basis as now it is widely agreed that Customer Satisfaction is the basis for any Business’ success. 


  1. Competitors - Competitors can directly influence your business strategies. Thus,  business companies must consider how to do a strategic analysis of competitors and have a competitive advantage. A company must consider what value-added services does the competitor offers or try to know the competitor’s USP. What advantages your business can offer to customers that your competitors do not offer. 

A business company must realize that the lack of knowledge of competitors will make it difficult to beat them and lead the market. A business company must consider how competitors respond when there is a shift in the business climate, such as Political and Legal changes, Technological changes, changes in Customer Behaviours that can affect their company. They should also evaluate how their competitors react to market changes and what methods they use to better prepare for these changes.

By doing so, your business company can gain an edge over them. 


  1. Suppliers - Suppliers are an integral part of the Micro Environment. They control the price structure of the industry through their own bargaining power. They constitute a significant force in the industry that shapes competition. Depending on this Supplier Environment, companies must also make a big Marketing Environment Decision on "Outsourcing" or "In-house Production". 

As Suppliers provide the production materials, their activities can also affect the business strategy. For example, if their services are not fair and timely, it can impact the time of production and sales because of the delayed production process. 

Therefore it becomes very important for business companies to keep a strong relation with Suppliers as they can help your business in getting an edge over Competitors.


  1. Marketing Intermediaries - Market Intermediaries are either individuals or business houses that support the business companies to advertise, sell, and deliver the items to the final customers. They are Middlemen (wholesalers, retailers, and agents), distribution companies, consumer service companies, and financial institutions. Sometimes, it becomes too difficult for business companies to meet customers. In such situations, agents and distribution companies help to reach out to the customer with the commodity.

Any form of Intermediary that the business takes into account must take the following aspects into consideration:

  • The business companies can regularly review the output of all intermediaries as well as those who occasionally assist their efforts. If necessary, business companies can also replace those who are no longer performing at the expected level.

  • Instead of creating one and thus going for experiments, working through the existing Marketing Channels is advantageous and also effective.

  • In order to reach the products/services to the customer, the Supplier has to determine the most cost-effective method of Intermediaries that will help increase the profit.


  1. Public - The term 'Public' simply applies to individuals in general. 

Of course, it is in the best interest of each business company to appease(satisfy) the general public. Each move you take also needs to be seen from their viewpoint. How your acts influence others is incredibly important because their opinion can be the one thing that either drives you towards success or takes you down from the pedestal.

The manner in which Public acts can make or break an organization. The company should be able to maintain a good relationship with the  Public since whatever it shows would directly impact the business of the organization. If the Public shows a positive response, this would improve the organization's business and vice versa. Some companies maintain a PR Team (Public Relations Team) that oversees activities and handles publicity on behalf of the corporation in order to maintain good relations with the Public. 

Companies must bring their primary resources into the successful management of their consumer, dealer, and supplier relationships. Their overall performance would be influenced by how other people in the Society view their actions. 

In this new Business World, the Public has acquired an important role and their involvement in the Micro Business Environment.



Both Macro and Micro Environmental Factors have a powerful impact on how effective the company is. Any decision you make needs to take these two environments into account. If you really want them to be lucrative and hold a respectable marketplace, your marketing strategy must also be focused on them.



Why PESTLE Analysis is important for your Business?

MagnusMinds IT Solution

About the Author

MagnusMinds IT Solution

MagnusMinds is a well-known name when it comes to software development solutions. We have 15+ years of experience in this field. We have proficient developers and cutting-edge technologies at our disposal to deliver unmatched software development solutions.