Marketing Assignment

INISTITUTE OF BUSSINESS AND ECONOMICS

DEPARTMENT OF MBA

Marketing Assignment

NAME-------------------------------------- ID NUMBER

Ermias Yeniealem------------------------1402383/2014

Tirualem (PHD)

Debre Markos, Ethiopia

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 Marketing Assignment

Feb 2022

The effects of external factors on industry performance: the case of lalibela

city micro and small enterprise, Ethiopia?

What is the external mean?

External factors are things outside the business that will have an impact on its success. Their
impact can be positive or negative a business cannot control external factors. All it can do is
react to them and make decision to help it remain successful. The contribution of micro and
small enterprise has been recognized over the world which is on of the mechanism and strategies
to reduce poverty and intergenerational wealth creation transfer is a focus on the development of
MSEs which generate income and employment opportunities .Micro and small enterprise
generally account for bulk the total enterprise population, irrespective of the level of economic
and social development of a country (Belete 2015).

What is the meaning of micro and small enterprise?

A microenterprise is an enterprise where investment in plant and machinery does not exceed
RS.25 lakh.

A small enterprise is an enterprise where investment in plant and machinery is more than RS. 25.

The official definition of micro and small enterprise (i.e. having 10 worker or less ) was adopted,
but excluded street vending “ guilt’s ” microenterprise is generally defined as a small business
employing 9Nine people or fewer and having a balance sheet or turn over less than a certain
amount (e.g. 2 million or php3 million ). The term micro enterprise and micro business have the
same meaning, most micro enterprises are family business employing one or two persons.

Most micro enterprise owners are primarily interested earning a living to support themselves and
their family. The only grow the on when something in their lives change and they need to
generate a larger income. The term small enterprise businesses are a business whose personnel
numbers fall below certain limits. Micro and small enterprise play varies role in economic

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development of a nation that include building up local production structure, creating employment
opportunity and achieving a fare distribution of national resource, income , knowledge, power
and help to promote rural industrialization and promote export market specifically (Mulugeta
2008).

Micro and small enterprise play fundamental position for socio-monitory development and
services as engine for employment opportunity and methods of improving wealth creation with
the aid of supporting the monitory boom (GFORE 2011) noted in Lench (2019).

Study investigated the factors that affect the performance of small and micro enterprises in
Bench maji, sheca and keffa zone unique to the manufacturing, trade and service provider sector
and reveled that the significant effect of political, legal , social, working premise, technology
infrastructure, marketing, finance, management and entrepreneurial competencies on the overall
performance of MSEs( Abdissa and fitwis 2016 ).

Hence, the main reason to conduct this study to analyze the effect of external factor on industry
performance in micro and small enterprise in the study area. Ethiopia has prolonged a number of
commercial enterprise gives approach or coverage to decorate business overall performance and
to create conductive commercial enterprise surrounding for micro and small enterprise’s growth
and development one of the major challenges that confronted the increase and development of
micro and small enterprise in Ethiopia is getting the right of entry to enough and sustainable
market (EDRI 2014).

Examined an effects of internal and external business, environmental factors on the performance
of micro and small enterprise in lalibela city ( kebede and simesh (2015).

The research finding show that infrastructure and monitory environment, technological
environment, and factors related with entrepreneurial commitment have a significant relationship
with performance of micro and small enterprise. Mainly researchers found that infrastructures
and finance had positive impacts on the overall performance of micro and small enterprise of
MSES while the rest has negative roles.

The political legal factor did not have any significant effect on industry performance on his study
of SMEs. Similarly the study of Mezgeb (2012) should that politico-legal factor did not

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significantly affect business performance of MSEs in Addis Abeba city ( Akinruwa, Awolusi and
Ibojo’s2013).

Finding shows that the monitory elements have been that most influencing predictor variable for
SMEs overall performance followed through infrastructure and politico-legal factor Fetene
(2017).

Working premises were at the fourth role in the phrases of its electricity in influencing
commercial enterprise overall performance followed through administrator and advertising and
marketing factor. This factor or dimension which affects industry performance that is

1. Marketing factors
2. Infrastructure factors
3. Finical factors
4. Working premise
5. Trade fair factors
6. Political-legal factors

The definitions of the above six factors are discussed below

1. Marketing factors: - are an external variable affecting the levels of a company’s

sales and a factor market is a market where factors of production are bought and
soled.
2. Infrastructure factors:-are the basic systems that undergird the structure of the
economy. Examples of infrastructure include transportation facilities,
telecommunication networks and water supply…infrastructure investment tends
to be less volatile than some other asset classes and is sometimes sought as an
investment.
3. Financial factor:-are factors to be used for evaluating the alternatives with regard
to financial measures and factors deficit finance that governs growth of the money
supply financial institution that determine the demand for money.
4. Working premise:-are choosing the Right premises is a key business decision
your premise should help you to operate effectively without excessive costs by

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taking in to accounts all the relevant factors you can identify suitable premise at a
location that meets the needs of your business ,your customer and your staff.
5. Trade fair factors:-are a distinguishing factor between trade fairs and trade
shows is size a trade fair is generally viewed as having a larger number of
participants than others.
6. Political-legal factors:-are a combination of a lot of factors such as the current
political party in power, the degree of the politicization of trade and industry, the
efficiency of the current government, government policies, current legal frame
work, the public attitude towards the economy,etc.

Which are political or crucial for micro and small enterprises in the study area?

As mentioned by different authors and researchers, MSEs are the backbone of the country
economy especially in developing countries, but in our country Ethiopia, even the government
has given high attention to MSEs and try to increase their performance by giving some supports,
they not effective as expected because of different internal and external factors. From external
factors, the major problems are lack of credit access, unfavorable infrastructure, insufficient
work premises, marketing factors, trade fair factors, political- legal factors.

Although a numbers researchers are still being finished on factors affecting the performance of
micro and small enterprise they are no longer as fantastic as expected and the problem
continuous, because there is the trouble in understanding the inside and contextual elements that
affect the performance of micro and small enterprises.

The researcher develop the following research questions

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Vast number of studies performed on the overall performance of MSEs with a number of factors
that determine enterprise surroundings of micro and small enterprises. Therefore, some of
empirical research mentioned complies with: Abdissa and Fitwi’s (2016).
study recognized that the exterior and internal factors affected overall performance of MSEs and
their existence could improve the everyday operation of micro and small firms’ performance.
The study indicates variables such as political, legal, financial, marketing, working premises,
infrastructural, probability seeking, persistence, commitment to the work, demand for affectivity
and quality, goal setting, hazard taking, data seeking, and self-confidence are positively affecting
the performance of MSEs (profit) in the study area. Similarly, for capital, variables such as
political, legal, financial, marketing, working premises, technological, probability seeking,
persistence, commitment to the work, demand for affectivity and quality, risk taking, statistics
seeking, and self-confidence positively affected the overall performance of MSEs (capital) and
significantly affect the performance of MSEs.
In addition, for range of employees, variables such as political, financial, marketing, working
premises, chance seeking, persistence, commitment to the work, demand for efficiency and
quality, data seeking, and intention setting have positive impact on the performance of MSEs and
Ebabu Engidaw Journal of Innovation and Entrepreneurship (2021).
Substantially have an effect on overall performance of MSEs in phrases of quantity of
employees. Hence improving these variables increases the overall performance of MSEs (profit,
capital, and variety of employees).
Kebede and Simesh’s (2015) studied the influence of internal and external enterprise
environmental elements on the overall performance MSEs in East Gojam Zone, Ethiopia. Results
from the study exhibit that infrastructure and monetary environment, technological surroundings,
and factors associated with entrepreneurial commitment have a clear substantial relationship with
performances of MSEs. Furthermore, based on the signal of the slope coefficients researchers
located that infrastructure and finance had wonderful impacts on the overall performance of
MSEs, while the rest has poor roles.
According to Fetene’s (2017) study, results have shown that the eight hypothesized factors
financial, management, marketing, entrepreneurial, technology, politico-legal, infrastructural,
and working premises factors have been discovered substantially affecting the business
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performance of SMEs working in the study area and it was found that the monetary elements
have been the most influencing predictor variable for SMEs’ overall performance followed
through infrastructure and politico-legal factors. Working premises were at the fourth role in
phrases of its electricity in influencing commercial enterprise overall performance followed
through administration and advertising and marketing factor.
The study followed quantitative research approach and it used explanatory study type with cross-
sectional survey design. To explain position of variables studied and effect of one variable to
another variable, it is advisable to use this design. For the purpose of this study, both the primary
and secondary sources data are utilized to achieve the objective of the study. Primary data was
collected directly from the owners of the MSEs with standardized close-ended questionnaires
used to collect data necessary to meet the objectives of the study.