INDIAN BUSINESS ENVIRONMENT

MODULE 1

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BUSINESS

It is the human activity directed towards the acquisition of wealth through the production of exchange of goods and services.A business enterprise is an economic institution as it is engaged in the production and distribution of goods and services in order to earn profits.

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NATURE AND SCOPE OF BUSINESS ENVIRONMENT

The scope of business is vast . Various business activities may be classified into two broad categories:

• Industry• commerce

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INDUSTRYIts branch of business which is concerned with the production of goods and services.Some types of industries are:

EXTRACTIVE INDUSTRIES: Products drawn out from natural

resources.eg;agriculture,mining,fishing.

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• GENETIC INDUSTRY:multiplying or reproduction of certain species of plants and animals.eg;forestry,poultry

• MANUFACTURING INDUSTRY: Conversion of raw material into finished products.These are further of many types….

Analytical industrySynthetic industryProcessing industryAssembling industryConstruction industry

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COMMERCE

It includes all those activities which ensures a free and smooth flow of goods and services from producers to consumers.

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TRADEits concerned with sale or transform or exchange of goods and services.

Domestic trade

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WHOLE SALE TRADE

RETAIL TRADE

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International tradea. import tradeb. export trade c. entrepot trade.

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AIDS TO TRADE

INSURANCEBANKING

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TRANSPORTATION

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ADVERTISING

WAREHOUSE

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CHARACTERISTICS OF MODERN BUSINESS.• ECONOMIC ACTIVITY

All activities relating to the production and distribution of goods and services are called economic activity.

• SALE Exchange of goods and services for price.

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• DEALING IN GOODS AND SERVICES Provides goods and services to society.

• PROFIT MOTIVE Business carried with purpose of earning profit

• RISK OR UNCERTAINITY The risks are always there in the business.

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• ORGANISATIONS Its helpful in smooth running of the business and achieving the objectives.

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• CONSUMER SATISFACTION The business should try to satisfy the needs of consumers in order to maintain their customers.

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• GLOBALISATION Products are being sold through global network.

McDonald’s Franchises Are Sold Worldwide

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RED BULL

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Objectives of modern business…PROFIT

GROWTH

POWER

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• EMPLOY SATISFACTION AND DEVELOPMENT

• QUALITY PRODUCTS AND SERVICES

• MARKET LEADERSHIP

• CHALLENGING

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• Joy of creation• Services to society

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BUSINESS ENVIRONMENT• It’s the set of conditions

economic,social,political or institutional in which business operations are conducted.

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INTERNAL ENVIRONMENT• Factors existing within a

business firm.these factors are controllable.

• Mission and objectives• Top management structure.• Power structure• Human and other resources.

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EXTERNAL ENVIRONMENT• Micro environment• Macro environment

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POLITICAL AND LEGAL ENVIRONMENT• It refers to the influence exerted

by the three political institutions viz,legislature,executive,and the judiciary in shaping directing developing and controlling business activities.

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LEGAL ENVIRONMENT• It consist of all the rules

regulations and procedures which govern business activities.

• General laws• Financial laws• Labour laws• Taxation laws

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SOCIO-CULTURAL ENVIRONMENT• It refers to the influence

exercised by certain factors which are beyond the company’s gate.