Analysis of Business

Environment

Dr. L. Mothilal,

Assistant Professor,

Department of Management Studies

Pondicherry Central University, India

Email: mothilal2020@gmail.com

https://www.linkedin.com/in/dr-mothilal-lakavath-7469b34/

https://www.slideshare.net/mothilalacad

https://www.facebook.com/mothilal2020

Scanning the Environment

Analysis of Environment

Scanning

Monitoring

Forecasting

Assessment

Scan for Relevant Changes in

Economic Environment

Political and Legal Environment

Socio-Cultural Environnent

Technological Environment

Global Environment

Assessing the Current and

Future Environmental Changes

Economic

Political &

Legal

Socio-

Cultural Technological &

Global

Fad

Fad is short lived

mushrooming of

opportunity which is

difficult to predict and

forecast. Business profit

from fad is pure matter of

luck and chance.

Source: http://www.managementstudyguide.com/scanning-market-

environment.htm

Trend

Trend is something which

takes time to build up

compared to fad and has a

predictable future.

Trend is sometimes co-

related with changes in

social culture and economic

situation.

Source: http://www.managementstudyguide.com/scanning-market-

environment.htm

Megatrend

Megatrend is much slower in

development and is associated with

political, socio-economical,

technology and regulatory changes.

Megatrends are estimated to last

around half decade or more.

For companies trend and megatrend

are of great importance because they

present business opportunities to

them.

Source: http://www.managementstudyguide.com/scanning-market-

environment.htm

This trend-spotting (scanning) activity can be undertaken by company itself or through market research. This activity can also be outsourced to companies, which specialize in analyzing current social and economic changes.

Fitness and diet are trend, which witness growth across the globe.

Factors influencing the Business

Environment

Globalization is affecting the way companies are conducting their business.

Communication and connectivity are reaching at a new level every day.

New economic powers like India, China, Brazil and Russia are exerting their influence.

Monitoring

The Business Environment consists of a complex set of interacting forces and influences outside the Organization.

The Business Environment affects the organization's ability to build and maintain mutually beneficial relationships with its target customers.

Through continuous monitoring its Business Environment a company must be able to anticipate change and act in a proactive way rather than leaving it to a reactive reaction. It must also keep up to date by realizing.

Source: http://www.studymode.com/subjects/importance-of-monitoring-

marketing-environment-page1.html

Forecasting

Qualitative

Quantitative

Categories of Forecasting

Historic Revolutions

Historical Revolutions

Black Revolution – Petroleum Production

Blue Revolution – Fish Production

Brown Revolution – Leather/non-conventional(India)/Cocoa production

Golden Fibre Revolution – Jute Production

Golden Revolution – Fruits/Overall Horticulture development/Honey Production

Green Revolution – Food grains

Grey Revolution – Fertilizer

Pink Revolution – Onion production/Pharmaceutical (India) /Prawn production

Revolutions Continued…

Red Revolution – Meat & Tomato Production

Round Revolution – Potato

Silver Fiber Revolution – Cotton

Silver Revolution – Egg/Poultry Production

White Revolution (In India: Operation Flood) – Milk/Dairy production

Yellow Revolution – Oil Seeds production

Evergreen Revolution – Overall development of Agriculture

Changes in Production Technology

Since Prometheus stole the fire

of knowledge from right under

the noses of the gods on Mount

Olympus and bestowed it upon

mankind, humans have not

stopped fiddling with it

and creating striking innovations

all throughout their evolution

Source: https://www.sentryo.net/the-4-industrial-revolutions/

THE FIRST INDUSTRIAL REVOLUTION –

1765

The first revolution spans from the end of the 18th century to the beginning of the 19th century

Replaced agriculture with industry as the foundations of the economic structure of society

Mass extraction of coal along with the invention of the steam engine created a new type of energy that thrusted forward all processes - Development of railroads and the acceleration of economic, human and material exchanges.

Source: https://www.sentryo.net/the-4-industrial-revolutions/

THE SECOND INDUSTRIAL REVOLUTION – 1870

New technological advancements initiated the emergence of a new source of energy: electricity, gas & oil

The development of the combustion engine set out to use these new resources to their full potential. Furthermore, the steel industry began to develop and grow alongside the exponential demands for steel

Chemical synthesis also developed to bring us synthetic fabric, dyes and fertilizer.

Methods of communication were also revolutionized with the invention of the telegraph and the telephone and so were transportation methods with the emergence of the automobile and the plane at the beginning of the 20th century

Industrial model based on new “large factories” and the organizational models of production as envisioned by Taylor and Ford

Source: https://www.sentryo.net/the-4-industrial-revolutions/

THE THIRD INDUSTRIAL REVOLUTION – 1969

A third industrial revolution appeared with the emergence of a new type of energy whose potential surpassed its predecessors: nuclear energy.

This revolution witnessed the rise of electronics—with the transistor and microprocessor—but also the rise of telecommunications and computers.

This new technology led to the production of miniaturized material which would open doors, most notably to space research and biotechnology.

For industry, this revolution gave rise to the era of high-level automation in production thanks to two major inventions: automatons—programmable logic controllers (PLCs) - & Robots.

Source: https://www.sentryo.net/the-4-industrial-revolutions/

The first industrial revolution used water and steam to mechanize production

The second used electric energy to create mass production

The third used electronics and information technology to automate production.

Source: https://www.sentryo.net/the-4-industrial-revolutions/

Today a fourth industrial revolution is underway which builds upon the third revolution and the digital revolution that has been taking place since the middle of the last century.

This fourth revolution with exponential expansion is characterized by merging technology that blurs the lines between the physical, digital and biological spheres to completely uproot industries all over the world.

The extent and depth of these changes are a sign of transformations to entire production, management and governance systems.

Fourth Industrial Revolution

Source: https://www.sentryo.net/the-4-industrial-revolutions/

Its genesis is situated at the dawn of the third millennium with the emergence of the Internet.

This is the first industrial revolution rooted in a new technological phenomenon—digitalization—rather than in the emergence of a new type of energy.

This digitalization enables us to build a new virtual world from which we can steer the physical world.

The industry of today and tomorrow aim to connect all production means to enable their interaction in real time. Factories 4.0 make communication among the different players and connected objects in a production line possible thanks to technology such as Cloud, Big Data Analytics and the Industrial Internet of Things (IIoT)

Fourth Industrial Revolution contd…

Source: https://www.sentryo.net/the-4-industrial-revolutions/

However, this fourth industrial revolution could be the first to deviate from the energy-greed trend—in terms of non-renewable resources—because we have been integrating more and more possibilities to power our production processes with alternative resources.

Tomorrow, factories 4.0 will be embedded in smart cities and powered by wind, sun and geothermal energy.

Within this context of profound technological and societal changes—because the two always go hand in hand during industrial revolutions—which is taking us towards global digitalization, industrial cybersecurity will become a leading sector

Fourth Industrial Revolution contd…

Source: https://www.sentryo.net/the-4-industrial-revolutions/

Change for Better…

Era of Turbulent Change

In era of turbulent change, managing change & discontinuity is a key Issue

Era of Turbulent Change

PDCA - PDCA

P – Plan

D – Development

C – Check

A – Act

Era of Turbulent Change

Companies are operating in a war zone of rapidly changing

Competitors

Technology

New Laws

Trade Policies Diminishing Customer Loyalty

Era of Turbulent Change

“ It is not the strongest nor the most intelligent that will survive but the one who is the most responsive to the change” – Charles Darwin