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An Overview Of BusinessEnvironment
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Concept Of Business Environment
Business Environment means the
aggregate of all the forces, factors andinstitutions which are external to andbeyond the control of an individual
business enterprise but which exercise asignificant influence on the functioningand growth of individual enterprises.
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Nature of Business Environment Aggregative:totality of all the external
forces which influence the working and
decision making of an enterprise. Inter-related:various elements are
closely interdependent and any change in one
element affects the other elements. Relative:it differs from country to country
and even region to region.
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Contd. Inter-temporal:it changes over time,
specially in long run, it changes
certainly. Uncertain:business environment is
volatile so it becomes very difficult toforecast.
Contextual:business environmentprovides the macro framework withinwhich the business firm (a micro unit)
operates.
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Significance of Business
Environment
First mover advantage
Early warning signal Customer focus
Strategy formulation
Change agent Public image
Continuous learning
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Types of Business
EnvironmentBusiness environment
Internal environment External environment
Micro environment Macro environment
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Factors of Internal EnvironmentFactors
culture
Mission & objectives
Top management structure
Power structure
Company image & brand equity
Human & other resources
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Elements of Micro EnvironmentMicro Environment
customers
Competitors
suppliers
Marketing intermediariesfinanciers
publics
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Various components of MacroEnvironment
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Political & Legal Environment The constitution of
the country
Political organization Political stability
Defence & military
policy Laws governing
business
The judicial system
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Social & Cultural Environment Demographic forces
Caste structure &
family organization Educational system
& literacy rates
Customs, beliefs &life styles
Taste & preferenceof people.
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Economic & Financial
Environment Nature of economic
system
Economic structure Economic policies
Economic
infrastructure
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Technological & Physical
Environment Rate of technological
change
Approaches toproduction of goods& services
Research &developmentsystems
New approaches &
equipments
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Natural Environment Climatic conditions
Agricultural,
commercial & othernatural resources
Ecological system
Levels of pollution
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Global Environment International
agencies
Treaties &agreements
Economic &business conditionsin other countries
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Coping with Environmentalchanges
Buffering
Leveling
Anticipation
Rationing
Dominating Changing
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Thank you