Microro Environment-Industry Analysis: Micro Environment And Environment
MICRO ENVIRONMENT/ INDUSTRY ANALYSIS
The environment which is close to business and affects its capacity to work is called micro or operational environment.
Industry is a group of companies which offer same or similar product or services. These products and services are close substitutes of each other. It consists of:
1 Suppliers
Supplier are the people who supply raw materials and required components to the companies. Increasing prices and reducing the quality of their products are potential means used by suppliers to exert power over firms competing within an industry. A firm should try to recover cost increased by its suppliers through its own pricing structure or its profitability is reduced by its suppliers’ actions. A supplier group is powerful when:
• It is dominated by a few large companies.
• …show more content…
The regulations may differ from one industry to other. The regulations also vary from location to location. Say if the firm is set up in a SEZ it has few incentives. These incentives include tax rebates, abolition of sales tax etc.
The company strategically should also choose which industry and which place to start a business in order to gain a competitive advantage
8 financial institution
The linkage of industries with financial institutions play a crucial role for industry’s survival and development. The firm needs support from financial institutions to meet its capital requirements or even day to day expense. The support and availability of financial institutions also play important role. The firms should maintain a cordial relationship with the supporting financial institutions to have a proper money flow in the firm.
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The environment which is close to business and affects its capacity to work is called micro or operational environment.
Industry is a group of companies which offer same or similar product or services. These products and services are close substitutes of each other. It consists of:
1 Suppliers
Supplier are the people who supply raw materials and required components to the companies. Increasing prices and reducing the quality of their products are potential means used by suppliers to exert power over firms competing within an industry. A firm should try to recover cost increased by its suppliers through its own pricing structure or its profitability is reduced by its suppliers’ actions. A supplier group is powerful when:
• It is dominated by a few large companies.
• …show more content…
The regulations may differ from one industry to other. The regulations also vary from location to location. Say if the firm is set up in a SEZ it has few incentives. These incentives include tax rebates, abolition of sales tax etc.
The company strategically should also choose which industry and which place to start a business in order to gain a competitive advantage
8 financial institution
The linkage of industries with financial institutions play a crucial role for industry’s survival and development. The firm needs support from financial institutions to meet its capital requirements or even day to day expense. The support and availability of financial institutions also play important role. The firms should maintain a cordial relationship with the supporting financial institutions to have a proper money flow in the firm.
9 e