Business Environment — Business Studies STD 12 Commerce — Question

Micro Environment: Micro environment means that environment which includes those factors with which business is closely related. These factors influence every industrial unit differently. These factors are as under:

1. Customers: Customers of an industrial unit can be of different types. They include household, government industry, commercial enterprises, etc. The number of different types of customers highly influences a firm. For example, a firm supplies goods only to the government. It means that firm has only one customer. If because of some reason their relations get soured, the supply of goods will stop and in that case the closure of that firm is certain. This clearly indicates that the customers do influence business. Therefore, a firm should make efforts to have different kinds of customers.
2. Suppliers: Like the customers, the suppliers also influence business. If a business has only one supplier and he gets annoyed because of some reason, the supply of goods can be stopped and the very existence of the business can be threatened or endangered. Hence, efforts should be made to have various suppliers.
3. Competitors: The competing firms can influence business in a number of ways. They can do so by bringing new and cheap products in the market or by launching some sale promotion scheme, etc.
4. Public: Public has different constituents like the local public, press or media, etc. The attitude or behaviour of these constituents can affect business units. For example, the local population can oppose some established firm whose businessis excessively noisy. Similarly, if the media gives some favourable report about a particular company, the price of its share can register an increase on this count.