What are the Micro Environmental factors that influences the financial capabilities of an organization?

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What are the Micro Environmental factors that influences the financial capabilities of an organization?

  • 04 Feb, 2019

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Different type of Micro Environmental factors that impacts the financial capabilities of an organization are –

a)      Customers – Customer plays an important role in every business. A business must adopt a marketing strategies that influence the needs and buying power of the customers. 

b)     Suppliers – The business strategies can be influenced by the action of suppliers. The services of the suppliers should be reasonable and appropriate so that the sales and production of the organization cannot be affected.

c)      Competitors – To sustain the competitive advantage, the organization should understand how to do a competitive analysis of competitors. It must know the USP of their competitors and then compare their USP with the competitors.

d)     Employees – The organization can achieve their objectives with the help of skilled employees. An experienced and skilled employee leads the success of the organization. Employees can gain more knowledge by attending training and development programs. Thus, the organization should establish the training and development programs to increase the skills of the employees.

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a)      Shareholders – Shareholders may have direct influence on the operations of the company. The corporate shareholders are not personally responsible for the debts and other financial obligations of the company. They help the organization to make a decision for increasing the money on the stock market.

b)     Media – In every organization, media or social media can make or break the reputation of the business. Some organizations maintain a stronger public relation department in order to make good relations with media. If media shows the positive impact, then it will increase the image of the organization and vice versa. 

c)      Distributors – From the manufacturing units, a company channelize their products with help of distributors and dealers. Distributors sells the products by transferring it to the retail stores, supermarkets and other stores.  

d)     Investors – Investors are the primary assets of an organization. If the investors invest more money, then the Company can spend more in the various departments. Investors invest higher amount of money, if they satisfy with their Return on Investments and product performances.

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a)      Public – For selling the products, company always look upon the needs of the society. Companies invest in community development i.e. public services, building public health units etc. By investing in the community development, the company can earn a goodwill in the market and builds the trust and faith among the general public. 

b)     Marketing Intermediaries – Marketing Intermediaries are the individuals and group of individuals who promotes the activities, operations, plans and procedures of the company. These intermediaries are the middleman, financial institutions, distributing agencies and marketing services agencies.

c)      Regulatory agencies – Regulatory agencies are the independent agencies of Government which is responsible for exercising the autonomous authority in a regular manner. These regulatory agencies are managed by the legislature for enforcing the different laws.  

d)     Employees – The skilled employees of the organization will lead to the success of the organization. The training and development program of an organization enhances the skills and knowledge of the employees.

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