Solar Feeder Microenvironment

Microenvironment

Daniel M. Shelley

Webster University

MNGT 5650 Management and Strategy

Microenvironment

All companies operate in an industry that is shaped by external factors or forces. We have previously discussed the external influences that impact an industry or the macroenvironment. The immediate industry and competitive environment within an industry is often referred to as the microenvironment. Companies within a specific industry must have the ability to analyze the factors that can cause change to any of the factors in both the macro and micro environment in order to maintain profitability and success.

The purpose of this assignment is twofold: first I will examine the factors that make up the microenvironment and provide insight into how these factors can impact an industry. I will then evaluate the case study “The Solar Feeder” and determine the outside forces that could impact the success of the bird feeder industry, of which Squirrel Defense Incorporated (SDI) resides.

Microenvironment Defined

The microenvironment consists of the industry and competitive environment that a business operates within. Michael E Porter has developed an effective model for formulating strategy and evaluating the five forces that act on the microenvironment. I will utilize Porter’s model to analyze the effect of the microenvironment on the bird feeder industry later in this paper. Business Dictionary.com defines a microenvironment as “the factors or elements in an organization’s immediate area of operations that affect its performance and decision making freedom. These factors include competitors, customers, distribution channels, suppliers, and the general public.” Simply stated, the microenvironment refers to the forces that are close to a company and affects the company’s ability to serve its customers.

The microenvironment is made up of the following forces:

o Rival firms

o New entrants

o...