Unit Ia Introduction to BE

8/13/2019 Unit Ia Introduction to BE

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WISH U A GOOD BEGINNING


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It refers to all External Forces,

Internal Relationships &

Society

Which have impact on the

functioning of business

What is Business Environment?


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Business Environment

Internal Environment

External Environment Micro (Task / operations)

Macro (General / Remote)


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1. Promoters Values

2. Mission & Objectives

3. Management Structure4. Internal Power Relationship

5. Company Image / Brand

6. Physical Assets / Facilities

7. R & D / Technological Capabilities


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8. Human Resources

9. Internal Relationships

Jobs & Wages Human Factor

Safe & Hygienic Work Place

Security


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External Environment - Micro

1. Customers

2. Suppliers

3. Competitors4. Public

5. Financiers

6. Marketing Intermediaries


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External Environment - Macro

Economic Factors

Social & Cultural Factors

Demographic Factors Political & Government Factors

Natural Factors

Technological Factors Global Factors


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Introduction - General

Various Revolutions

Industrial :

Labour Intensive Capital Intensive

Green

White


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I.T. (Convergenceof CommunicationTechnologies)

Knowledge Resolution (IntellectualCapital)


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Two Economic Eras

1.Mass Production2.Customized Production


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Features of old Economic Era

Growth Areas:

Energy

TransportationUtility

Chemicals &

Consumer Goods


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Features of old Economic Era

Growth Rate2-3 % p.a.

FocusNatural Resources

ImportantPhysical Assets (main)

Example - Oil Rich Countries


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Features of New Economic Era

Growth Engines:

1. I.T.

2. Satellites3. Fiber optics

4. Biotechnology

5. Environment6. Healthcare


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Growth Rate20-30% p.a.

Focus Knowledge

Knowledge Management


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ImportantPhysical Assets +

Intangible Assets:

ExampleJapan, Singapore,

Hong Kong

Global Brands

Skills &Relationships

Drivers ofSuccess


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Era of Turbulent Change

In era of turbulent change,managing change & discontinuity isa key Issue


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PDCA - PDCA

PPlan

DDevelopment

CCheck AAct


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Companies are operating in a warzoneof rapidly changing

Competitors

Technology

New Laws

Trade Policies Diminishing Customer Loyalty


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Todays Generation :

High Awarenessincreased

information Bargaining Powerwill Influence

Intelligent & Proactive

Higher Standard of Living


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Demands Variety of Services

Wants World Class Quality

Tech Savvy Try New Products & Fickle in brand loyalty

More Sensitive


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Initially companies begin to compete onCostbasis, once companies achievecomparable cost structure withinindustry, Focus shifts to

Qualitythen

Variety& finally to Responsiveness


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Key Differentiator Service

for example:

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

2. McDonald's (Courteous)

3. WalMart StorePeople Greeter4. Singapore AirlinesSmile


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Old Rule is changing:

Big will not swallow small but, thatFAST who will outpace SLOW


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It is not the strongest nor the mostintelligent that will survive but the onewho is the most responsive to the

changeCharles Darwin

Gap between conception of an idea &

commercialization has decreasedtremendously.


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Where Indian companies have to focus?

Quantum Restructuring

Discard Outdated Systems

( e.g. E- Governance inAdministration)

Focus on Customer centricity

(Blow Up)


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Analysis of Environment:

1.Scanning

2.Monitoring3.Forecasting

4.Assessment


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Analyze Environment SWOT

SStrengths

WWeaknessesOOpportunities

TThreats


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AnalyzeCompetitive Structure ofIndustries:

Rivalry among existing firms

Threat of new entrants

Bargaining power of suppliers &buyers


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Types of Forecasting

1. Economic: General Economic Conditions

GDP Growth Rate

Per Capita Income

Distribution of Income

BOP Trends, Inflation, Rainfall

Climate

PoliticsLocal & International


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Economic Environment

Nature of the Economy

Low Income - Less than $755 of percapita GNP

Middle Income( $756 - $2995)

High Income($9266 & Above)

( of year 2000)


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Structure of the Economy: Components

Primary Agriculture

Secondary Industry Tertiary Service


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Economic Policies:

Industrial Policy

Trade Policy

Foreign Exchange

FDI / FPI

Monetary

Fiscal - Public Expenditure & Revenue

5 Year Plans


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Economic Conditions:

Boom

Recession


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

Magnitude & Nature of cross border Trade

Financial FlowsFDI / FPI

Extremism:

Terrorismwithin & Cross border Unsocial elements

Fanaticism


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Economic Systems:

1. Capital Economy

2. Centrally Planned3. Mixed Economy

R l f G t


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Roles of Government -Economic

Regulatory

PromotionalInfrastructure

Entrepreneurial Planning


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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)


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2. Social Forecasting:

Population Growth / Decline

Age Structure of Population Migration

Family Life-Style

Social Attitude


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Demographic Environment

Age Structures

Gender

Family Size Family Life-Cycle

Single

MarriedWith / Without Children


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Demographic Environment

Occupation

Education

Social Class Religion

Nationality

Urban / Rural


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3. Political Forecasting:

Political Alliances

Political Ideologies Political Leadership


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Political Environment

Policies of Political Parties

Nature of the Constitution

Govt. System: Parliamentary Democracy

Presidential Democracy


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4. Technological Forecasting:

Innovations:

Radical / Incremental /

Next Generation Place & Extent of Diffusion

Pace

(Future shock)


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Natural Environment

Geographical Factors:

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

Ecological Factors

In ie of constant change


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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

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Unit Ia Introduction to BE

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