The company microenvironment refers to all the micro factors that affect business strategy, decision making and performance. It is vital to the success of a company to carry out a microenvironment analysis before its decision-making process..
It corresponds to the internal environment of the company. This includes all departments such as administration, finance, research and development, purchasing, business operations, and accounting. Each of these departments influences marketing decisions.
For example, the research and development department has information about the characteristics of a product, and the accounting area approves the financial part of the marketing plans and the budget to satisfy the client..
Marketing managers must monitor the availability of supplies and other aspects related to suppliers to ensure that the product is delivered to customers in the required time, in order to maintain a strong relationship with them.
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Microenvironmental factors are the closest to a company and have a direct impact on its business operations. Before deciding on the corporate strategy to follow, companies should carry out a complete analysis of their microenvironment.
They are an important part of the company's microenvironment. They must be good at their jobs, whether producing or selling. Managers must be good at managing their subordinates and supervising other parts of the microenvironment..
This is very important because, although all employees may be capable and talented, internal politics and conflicts can ruin a good company..
They are those who sell products and services equal or similar to those of a company. They compete in the market, and the way they sell must be taken into account. How does it affect your price and product differentiation? How can you take advantage of this to get better results and get ahead of them?
When you start a company, you fight against others already established in the same industry. After the company is established, it will eventually have to face newer ones that will try to take over its clients..
Even in a great economy, a lack of money can determine whether a business survives or dies. When cash is too limited, it affects the number of people that can be hired, the quality of the equipment, and the amount of advertising that can be purchased..
Keeping up with cash gives you much more flexibility to expand your business or endure an economic downturn.
It consists of the values, attitudes and priorities that employees share. A fierce culture in which each employee competes with each other creates a different environment than a company that emphasizes teamwork. Typically, company culture flows from top to bottom.
Knowing who the customers are and what their motives are for buying the product will play an important role in the way in which the marketing of the products and services is approached..
The power of customers depends on the ferocity of the competition, how good the products are and if the advertising encourages them to want to buy products or services of the company, among other elements.
They have a big impact on costs. The influence of any supplier depends on the scarcity: if you can't buy elsewhere, the bargain is limited. They can control the success of the business when they have the power.
Companies carry out a Strengths, Weaknesses, Opportunities and Threats Analysis (SWOT).
Commonly, the company will seek to take advantage of those opportunities that can be combined with its internal strengths; that is, the company has great capacity in any area in which strengths are combined with external opportunities.
If you want to take advantage of opportunities in your areas of weakness, you may need to develop certain skills. An area of weakness that is combined with an external threat represents a vulnerability. The company may need to develop contingency plans.
They are distinctive capabilities, competencies, skills, or assets that give a business or project an advantage over potential competition. They are internal factors favorable to achieve the objectives of the company.
They are internal deficiencies that place the business or project at a disadvantage with respect to its competition, or deficiencies that prevent an entity from moving in a new direction or acting on opportunities. They are unfavorable internal factors to achieve the objectives of the company.
They are all the elements in the business environment that the business or project could exploit for its benefit.
They are elements in the environment that could erode the company's market position; these are external factors that prevent or hinder an entity from moving in the desired direction or achieving its objectives.
Below is an example of the SWOT analysis for fast food company Domino's Pizza:
Domino's is the market leader in the delivery of different types of pizzas, as it has no competitors in this sector. Its good image makes the company even stronger. It offers products of good taste and quality with qualified personnel, a good working environment and a hygienic environment..
Their specialty is pizzas. The motivation level of the staff is very high, which makes the company more prosperous.
They are certified by ISO (International Standards Organization). They have sufficient resources to operate different activities. They offer free home delivery service, creating a monopoly in this sector.
Another great strength, and even a competitive advantage, is having a full service restaurant with delivery services..
Most of the domino competitors do not have restaurants. Thanks to the restaurant, Domino's can market many different segments that other pizza chains cannot..
The fact that Domino's has a restaurant is also a weakness. Due to the restaurant, Domino's has higher indirect costs that the other competitors do not have to deal with.
As a result of its higher indirect costs, Domino's must charge high prices. It is not a low-cost producer. They trust the quality of their pizza and their good service to justify their higher prices..
The menu is limited and expensive, there are very few inexpensive items on the menu and they are more focused on western taste than eastern.
New markets can be explored. Domino's can introduce new products with people's oriental tastes in mind, just like McDonalds did.
The diversification of new products can increase their market share, being able to reduce their prices due to their greater offer.
Domino's main threats come from its competitors. Currently, its closest competitor is Pizza Hut, which is working to open its branch quickly. Domino's main competitive advantage over Pizza Hut is its lower price.
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