SUBMITTED TO: SUBMITTED BY:Mr. GAURAV SHREEKANT MEHUL CHOPRA(24)

GOURAV GUPTA (18)

AMITANSHU GUPTA(30)

NISHKARSH KAUSHIK (38)

SAKSHAM AGARWAL (51)

Business environment is the sum total of all external and internal factors that influence a business. You should keep in mind that external factors and internal factors can influence each other and work together to affect a business.

Business Environment is a direct relationship

between successful management and the

influence and impact of environmental change.

External business environment:

External Business environment is a set of political,

economic, social and technological (PEST) forces

that are largely outside the control and influence of a

business, and that can potentially have both a positive

and a negative impact on the business.

Technological innovation

Globalization

Growth of poverty

Collapse of emerging markets

Shift from manufacturing jobs to service jobs

New methods of manufacturing

Internal Business Environment is the set of elements or forces which affects a organization's or firm’s behaviour.

Examples are like personnel, finance, marketing, production, operational research and so on.

Micro environment is the environment that an

organization can influence. It may not be able to

Correct all flaws in the microenvironment, but it

has a much better control over the macro

environment.

Consumers – needs , purchasing power and behavior

Suppliers

Market intermediaries

Competitors

I. Micro environment of business.

1) Suppliers

Supply raw materials and other components (Inputs)

Importance

- Reliable supply – continuous supply for smoothfunctioning

2) CUSTOMERS

Different categories of customers

i. Industrial customers

ii. Wholesale customers

iii. Retail customers

iv. Government customers

v. Foreign customers

3) Market intermediaries

i. Middlemen.

ii. Physical distribution Firms: (warehouses and transport

firms)

iii. Marketing service agencies (Advertising agencies market

research firms, media firms, consulting firms)

iv. Financial intermediaries

4. Competitors:

The Threat of entry of new firms

The Power of Buyers

The Power of Suppliers

The Power of Substitutes

The Intensity of Rivalry among existing firms

Macro Environment are major external and

uncontrollable factors that influence an

organization's decision making, and affect its

performance and strategies.

Sociological Factors

Political Factors

Legal Factors

Educational Factors

Technological Factors

Economical Factors

Natural Factors Historical Factors

SOCIOLOGICAL FACTORS It concerns with society as a whole; it covers health, media, education,

minorities, women, organized labour , legal system and demographics.

The biggest challenge to firms is the society's changing demands.

POLITICAL FACTORSPolitical environment gives shape to business. Political stability, Government

administration, Philosophy of the political parties are some of political factor

which

affects the business environment

LEGAL FACTORSLegal Environment has a permanent and lasting impact in shaping business .

Labour law act, Industrial dispute act, Minimum wages act, Law of contract,

Import & Export control act and tax law act are few legal factors.

EDUCATIONAL FACTORSEducational cum cultural environment affects business activities and

managerial skills.These factors include literacy, attitude toward training and

skill required for a businesslike specialized, vocational and technical training

TECHNOLOGICAL FACTORSTechnology is about application of tools, methods and techniques to improve

production and processes. Technology is life for growth and competitiveness of

Business.

ECONOMICAL ENVIRONMENTEconomic environment conditions such as business cycle, unemployment,

Inflation,monitory policies, Industrial policies, trade policies etc also affects the

businessenvironment.

NATURAL & ECOLOGICAL FACTORSUse of modern technology sometimes involves huge social cost in term of

Deterioration of environmental pollution and ecological balance. So business

environment should also consider about natural resources, weather & climatic

conditions, health hazards etc.

HISTORICAL FACTORSBusiness Environment is also affected by historical factors. Business

environment in anumber of newly independent countries has been determined

by their past colonial status.