For example, competition for a firm producing TVs does not come only from other brands of TV manufacturers but also from manufacturers of air conditioners, refrigerators, cars, washing machines etc. All these goods compete for attracting disposable incomes of the final consumers. Competition among these diverse products is generally referred to as desire competition as all these goods fulfill the various desires of the consumers who have limited disposable incomes.

As a consequence of liberalisation and globalisation of the Indian economy since the adoption of economic reforms there has been a significant increase in competitive environment of business firms. Now, Indian firms have to compete not only with each other but also with the foreign firms whose products can be imported.

For example, in the USA American firms faced a lot of competition from the Japanese firms producing electronic goods and automobiles. Similarly, the Indian firms are facing a lot of competition from Chinese products. It is important to note that for successful competi­tion the Indian firms have to improve not only the quality of the products but also to enhance their productivity so that cost per, unit can be reduced.

Finally, publics are an important force in external micro environment. Public, accord­ing to Philip Kotler “is any group that has an actual or potential interest in or impact on a company’s ability to achieve its objective”. Environmentalists, media groups, women associations, consumer protection groups, local groups, citizens associations are some important examples of publics which have an important bearing on environment of the firms.

competition from the Japanese firms
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