Seminar paper from the year 2012 in the subject Business economics - Operations Research, grade: B, Kings College London, language: English, abstract: The micro environment can be defined as that which consists of the groups that the company deals with on a regular basis. The microenvironment is thus comprised of the suppliers to the firm, the customers, distributors and other companies in the industry with which the firm competes with. In analysing these groups scholars have come up with a model that is specifically targeted at this kind of analysis which is called Porter's five forces analysis (Lamb, Hair, & McDaniel, 2011). According Porter, the model presents five forces that determine the competitive nature of the microenvironment within which a firm operates in. scholars argue that a highly unattractive industry will be one that all the five forces found in the model are strongly present and this would mean that there is perfect competition. The model consists of the following forces: threat of new entrants, bargaining power of suppliers, threat of substitutes and the rivalry among existing competitors (Kurtz, 2008).