Be unit-i

WISH U A GOOD BEGINNING

[email protected] - DMS, Pondicherry University

It refers to all External Forces,– “ Internal Relationships &– “ Society

Which have impact on the functioning of business

What is Business Environment?


Business Environment

• Internal Environment

• External Environment • Micro (Task / operations)• Macro (General / Remote)


Internal Environment

1. Promoters’ Values

2. Mission & Objectives

3. Management Structure

4. Internal Power Relationship

5. Company Image / Brand

6. Physical Assets / Facilities

7. R & D / Technological Capabilities


Internal Environment

8. Human Resources

9. Internal Relationships• Jobs & Wages• Human Factor• Safe & Hygienic Work Place• Security


External Environment - Micro

1. Customers

2. Suppliers

3. Competitors

4. Public

5. Financiers

6. Marketing Intermediaries


External Environment - Macro

• Economic Factors• Social & Cultural Factors• Demographic Factors• Political & Government Factors• Natural Factors• Technological Factors• Global Factors


Introduction - General

• Various Revolutions• Industrial :

• Labour Intensive• Capital Intensive

• Green • White



• I.T. (Convergence of Communication Technologies)

• Knowledge Resolution (Intellectual Capital)



• Two Economic Eras

1.Mass Production

2.Customized Production


Features of old Economic Era

• Growth Areas:–Energy–Transportation–Utility–Chemicals &–Consumer Goods


Features of old Economic Era

• Growth Rate – 2-3 % p.a.• Focus – Natural Resources• Important – Physical Assets (main)

• Example - Oil Rich Countries


Features of New Economic Era

• Growth Engines:1. I.T.

2. Satellites

3. Fiber optics

4. Biotechnology

5. Environment

6. Healthcare



• Growth Rate – 20-30% p.a.• Focus Knowledge

Knowledge Management



• Important – Physical Assets +

Intangible Assets:•

• Example – Japan, Singapore,

Hong Kong

Global Brands Skills & Relationships

Drivers of Success


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



• Companies are operating in a war zone of rapidly changing

• Competitors• Technology• New Laws• Trade Policies

• Diminishing Customer Loyalty



• Today’s younger generation is coming with new dreams, hopes & aspirations

• What it needs

• New set of Corporate Response

Why ?



• Today’s Generation :• High Awareness – increased information Bargaining Power will Influence

• Intelligent & Proactive • Higher Standard of Living



• Demands Variety of Services• Wants World Class Quality• Tech Savvy• Try New Products & Fickle in brand loyalty• More Sensitive



• Initially companies begin to compete on Cost basis, once companies achieve comparable cost structure within industry, Focus shifts to

• Quality then• Variety & finally to• Responsiveness



• Key Differentiator Service

for example:

1. Xerox Corp. (service within 3 Hours anywhere in U.S.)

2. McDonald's (Courteous)

3. WalMart Store – People Greeter

4. Singapore Airlines – Smile



• Old Rule is changing:

• Big will not swallow small but, that FAST who will outpace SLOW



• “ 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

• Gap between conception of an idea & commercialization has decreased tremendously.



• Where Indian companies have to focus?• Quantum Restructuring • Discard Outdated Systems ( e.g. E- Governance in Administration)

Focus on Customer centricity (Blow

Up)



• Analysis of Environment:

1.Scanning

2.Monitoring

3.Forecasting

4.Assessment



• Analyze Environment SWOT–S – Strengths–W – Weaknesses–O – Opportunities–T – Threats



• Analyze – Competitive Structure of Industries:

• Rivalry among existing firms• Threat of new entrants• Bargaining power of suppliers &

buyers


Types of Forecasting

1. Economic: General Economic ConditionsGDP Growth RatePer Capita IncomeDistribution of IncomeBOP Trends, Inflation, Rainfall Climate Politics – Local & International


Economic Environment

• Nature of the Economy• Low Income - Less than $755 of per

capita GNP• Middle Income – ( $756 - $2995)• High Income – ($9266 & Above)

( of year 2000)



• Structure of the Economy: Components• Primary Agriculture (18% in 2007)

• Secondary Industry ( • Tertiary Service (



• Economic Policies:• Industrial Policy• Trade Policy• Foreign Exchange• FDI / FPI• Monetary• Fiscal - Public Expenditure & Revenue



• Economic Conditions:• Boom • Recession



• Global Linkages: Membership of WTO, IMF, World Bank, Trade Blocks etc.

• Magnitude & Nature of cross border Trade• Financial Flows – FDI / FPI• Extremism:

– Terrorism – within & Cross border– Unsocial elements– Fanaticism



• Economic Systems:

1. Capital Economy

2. Centrally Planned

3. Mixed Economy


Roles of Government - Economic

• Regulatory• Promotional – Infrastructure• Entrepreneurial • Planning


Other Roles of Government

• The Constitution• Directive Principles of State Policy• Separation of Powers:

1. Union List

2. State List

3. Concurrent List (1&2)



2. Social Forecasting:Population Growth / DeclineAge Structure of PopulationMigration Family Life-StyleSocial Attitude


Demographic Environment

• Age Structures• Gender • Family Size• Family Life-Cycle

Single

Married

With / Without Children


Demographic Environment

• Occupation• Education• Social Class• Religion• Nationality• Urban / Rural



3. Political Forecasting:• Political Alliances• Political Ideologies • Political Leadership


Political Environment

• Policies of Political Parties• Nature of the Constitution• Govt. System:

–Parliamentary Democracy –Presidential Democracy



4. Technological Forecasting:• Innovations:

• Radical / Incremental / • Next Generation

• Place & Extent of Diffusion• Pace (Future shock)


Technological Forecasting

• Technological Leadership & Followers• Transfer of Technology• Appropriate Technology & Adaptation • First mover Advantages &

Disadvantages• Sustainability of the lead


Natural Environment

• Geographical Factors:

( e.g. interplanetary explorations & motives beyond them - commercial Exploitation )

• Ecological Factors


In view of constant changewhat should company do?

• Customer Needs & Expectations• Demand Conditions• Substitutes• Govt. Policy• Social Forces• Competitive Dynamics• Innovations by R&D Labs• Manage cross-cultures


Date post:	20-May-2015
Category:	Technology
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