Micro environment refers to the specific factors and forces that directly impact a business and its ability to operate effectively. It includes all the internal and external factors that are within the control of the business and have a direct impact on its daily operations, performance, and success.

1. Definition of Micro Environment:
Micro environment is the immediate and close environment of a business that directly affects its capacity to work and operate effectively. It consists of factors that are specific to the industry, market, and business itself.

2. Internal Factors:
The internal factors are within the control of the business and include:

- Employees and their skills: The workforce of a business plays a crucial role in its success. The skills, knowledge, and motivation of employees directly impact the business's capacity to work effectively.

- Management: The quality of management and their decision-making abilities influence the business's operations and performance.

- Organizational culture: The values, beliefs, and norms within the organization can either promote or hinder productivity and effectiveness.

- Resources: The availability and management of resources such as capital, technology, and infrastructure are essential for the smooth functioning of a business.

3. External Factors:
The external factors are outside the control of the business and include:

- Customers: The demand, preferences, and buying behavior of customers have a direct impact on the business's capacity to generate revenue and sustain profitability.

- Competitors: The actions and strategies of competitors can influence the market position, pricing, and customer loyalty of a business.

- Suppliers: The reliability, quality, and cost of inputs provided by suppliers can affect the business's ability to produce goods or deliver services.

- Government regulations: Laws and regulations imposed by the government can create opportunities or pose challenges for businesses in terms of compliance, licensing, and taxation.

- Economic conditions: Factors such as inflation, interest rates, and consumer spending patterns can affect the business's sales, profitability, and overall performance.

- Socio-cultural factors: The prevailing social and cultural norms, values, and trends in a society can impact the demand for certain products or services.

4. Importance of Micro Environment:
Understanding and managing the micro environment is crucial for businesses as it determines their ability to compete, adapt, and succeed in the market. By identifying and analyzing the factors within their control, businesses can make informed decisions, develop effective strategies, and mitigate risks. It allows them to align their operations, resources, and marketing efforts with the specific needs and expectations of their target customers. Ultimately, a favorable micro environment can enhance a business's capacity to work efficiently, attract customers, and achieve its goals.