The external business environment is the area outside of a company's remit that it has little or no control over. There are two types of such environment;
1) Micro Environment
Also known as the task environment, this concept has a direct influence on any given business. Micro-environment issues do not impinge on all firms in an industry and in many ways it depends on the effectiveness of the way a business deals with a particular element.
The factors within the Micro-environment are:
Suppliers- Those who supply products and resources to a business.
Customer- The biggest job is to create and sustain a customer base. There are a number of factors in this including dependability, stability of demand, growth prospects and competition.
Marketing Intermediaries - This area is dictated by middle men such as agents and merchants that help close sales for the business.
Public- Anyone who is a potential customer falls under this category.
2) Macro Environment
This secondary concept is the general environment and the factors within it are usually uncontrollable. Success here depends on how any given business adapts to the following constraints;
Economic Environment - This describes the nature of the economic system and how healthy it is.
Social Environment - Otherwise known as a nation's value system. This is comprised of sociological factors such as the customs of a society, the cost system and mobility of labour.
Political Environment - The influence of politics, ideologies and the impact of bureaucracy.
Legal Environment - Flexibility of the law and the rules a business operates under.
Technical Environment - This relates to technological developments and the type of goods produced, how they are manufactured as well as the costs of the technology.
1) Micro Environment
Also known as the task environment, this concept has a direct influence on any given business. Micro-environment issues do not impinge on all firms in an industry and in many ways it depends on the effectiveness of the way a business deals with a particular element.
The factors within the Micro-environment are:
Suppliers- Those who supply products and resources to a business.
Customer- The biggest job is to create and sustain a customer base. There are a number of factors in this including dependability, stability of demand, growth prospects and competition.
Marketing Intermediaries - This area is dictated by middle men such as agents and merchants that help close sales for the business.
Public- Anyone who is a potential customer falls under this category.
2) Macro Environment
This secondary concept is the general environment and the factors within it are usually uncontrollable. Success here depends on how any given business adapts to the following constraints;
Economic Environment - This describes the nature of the economic system and how healthy it is.
Social Environment - Otherwise known as a nation's value system. This is comprised of sociological factors such as the customs of a society, the cost system and mobility of labour.
Political Environment - The influence of politics, ideologies and the impact of bureaucracy.
Legal Environment - Flexibility of the law and the rules a business operates under.
Technical Environment - This relates to technological developments and the type of goods produced, how they are manufactured as well as the costs of the technology.
