The success of every business depends on adapting itself to the environment within which it functions. For example, when there is a change in the government polices, the business has to make the necessary changes to adapt it to the new policies.
Similarly, a change in the technology may render the existing products obsolete, as we have seen that the colour television has made the black and white television out of fashion. Again a change in the fashion or customers’ taste may shift the demand in the market for a particular product.
All these aspects are external factors that are beyond the control of the business. So the business units must have to adapt themselves to these changes in order to survive and succeed in business. Hence, it is very necessary to have a clear understanding of the concept of business environment and the nature of its various components.
What is Business?
Business may be understood as the organized efforts of enterprises to supply consumers with goods and services for a profit.
The Micro Environment of Business
These are powers which are deeply related with company and company can control these type of environment by improving its capacity and efficiency.
Suppliers are the persons who supply raw material to company.
Customers are the persons who buy goods from company.
3. Market Intermediaries
Market intermediaries are those people who helps company to sell its products.
4. Financial Intermediaries
Financial intermediaries are those institutions who provide loan, credit and advance to company.
Competitors are those who also sell same product of company.
Public is those group of people who can buy or who can show their interest to buy the products of company.