PREPARED BY:VIJAY DEWANICLASS :P.G.D.M 2ND SEM.

BUSINESS ENVIRONMENT

CONCEPT OF ENVIRONMENT

• THE ENVIRONMENT OF ANY ORGANISATION IS “THE AGGREGATE OF ALL CONDITIONS , EVENTS AND INFLUENCES THAT SURROUNDS AND AFFECT IT”.

• THE BUSINESS ENVIRONMENT CONSISTS OF INTERNAL AND EXTERNAL FACTORS THAT MAY INFLUENCE THE NATURE AND SCOPE OF BUSINESS ACTIVITIES.

CONCEPT OF ENVIRONMENT

• DEFINITIONS OF BUSINESS ENVIRONMENT:BUSINESS ENVIRONMENT CONSISTS OF ALL

EXTERNAL AND INTERNAL FACTORS THAT INFLUENCE THE COMPLEX INTERACTION OF MARKET , PRODUCTION AND FINANCE – THE 3 BASIC COMPONENTS OF THE BUSINESS WORLD” - J.A. KRITZ & C.T. DUGGAN

CONCEPT OF ENVIRONMNET

THE ENVIRONMENT INCLUDES FACTORS OUTSIDE THE FIRM WHICH CAN LEAD TO OPPURTINITIES FOR AND THREATS TO THE FIRM.ALTHOUGH , THERE ARE MANY FACTORS , THE MOST IMPORTANT OF THESE FACTORS ARE SOCIO-ECONOMIC, TECHNOLOGICAL, SUPPLIERS, COMPETITORS & GOVERNMENT”

- W.F GLUECK & L.R. JOUCHO

CHARACTERSTICS OF BUSINESS ENVIRONMENT

BUSINESS ENVIRONMENT IS EXTERNAL.

IT IS COMPLEX IN NATURE.

IT IS MULTI DIMENSIONAL.

IT IS EVER CHANGING.

IT MAY BE FAVOURABLE OR UNFAVOURABLE.

IT DEMANDS A HIGH DEGREE OF ADAPTABILITY.

BUSINESS ENVIRONMENT CONSTITUENTS

CONSTITUENTS OF BUSINESS ENVIRONMENT

BUSINESS ENVIRONMENT

EXTERNAL ENVIRONMENT

INTERNAL ENVIRONMENT

CONSTITUENTS OF BUSINESS ENVIRONMENT

• BUSINESS ENVIRONMENT CONSISTS OF TWO SETS OF FACTORS:

a) INTERNAL FACTORS.b) EXTERNAL FACTORS.• EXTERNAL ENVIRONMENT IS FURTHER

CLASSIFIED AS:A. MICRO EXTERNAL ENVIRONMENTB. MACRO EXTERNAL ENVIRONMENT

INTERNAL FACTORS

• INTERNAL FACTORS: THE INTERNAL FACTORS CONSIST OF FORCES OPERATING WITHIN THE ORGANISATION SUCH AS QUALITY AND QUANTITY OF MANPOWER , ORGANISATIONAL STRUCTURE ETC. THE FIRM HAS CONTROL OVER THESE FACTORS.

INTERNAL FACTORS

VALUE SYSTEM

VISION , MISSION AND OBJECTIVES.

ORGANISATION STRUCTURE.

ORGANISATION RESOURCES.

COMPANY IMAGE AND BRAND EQUITY.

EXTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT

EXTERNAL MACRO

ENVIRONMENT

EXTERNAL MICRO

ENVIRONMENT

EXTERNAL MICRO ENVIRONMENT

• EXTERNAL MICRO ENVIRONMENT:MICRO ENVIRONMENT IS ALSO KNOWN AS THE TASK ENVIRONMENT OR OPERATING ENVIRONMENT.

1. FIRM2. SUPPLIERS3. DISTRIBUTORS4. CUSTOMERS5. COMPETITORS6. PUBLIC

EXTERNAL MACRO ENVIRONMENT

• THE MACRO ENVIRONMENT IS ALSO KNOWN AS GENERAL ENVIRONMENT OR REMOTE ENVIRONMENT.

1. PHYSICAL ENVIRONMENT.2. DEMOGRAPHIC ENVIRONMENT.3. ECONOMIC ENVIRONMENT.4. POLITICAL ENVIRONMENT.5. SOCIAL AND CULTURAL ENVIRONMENT.6. TECHNOLOGICAL ENVIRONMENT.7. INTERNATIONAL ENVIRONMENT.

S.W.O.T ANALYSIS