unit ia introduction to be
TRANSCRIPT
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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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Internal Environment
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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Internal Environment
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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Introduction - General
I.T. (Convergenceof CommunicationTechnologies)
Knowledge Resolution (IntellectualCapital)
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Introduction - General
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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Features of New Economic Era
Growth Rate20-30% p.a.
Focus Knowledge
Knowledge Management
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Features of New Economic Era
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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Era of Turbulent Change
PDCA - PDCA
PPlan
DDevelopment
CCheck AAct
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Era of Turbulent Change
Companies are operating in a warzoneof rapidly changing
Competitors
Technology
New Laws
Trade Policies Diminishing Customer Loyalty
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Era of Turbulent Change
Todays Generation :
High Awarenessincreased
information Bargaining Powerwill Influence
Intelligent & Proactive
Higher Standard of Living
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Era of Turbulent Change
Demands Variety of Services
Wants World Class Quality
Tech Savvy Try New Products & Fickle in brand loyalty
More Sensitive
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Era of Turbulent Change
Initially companies begin to compete onCostbasis, once companies achievecomparable cost structure withinindustry, Focus shifts to
Qualitythen
Variety& finally to Responsiveness
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Era of Turbulent Change
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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Era of Turbulent Change
Old Rule is changing:
Big will not swallow small but, thatFAST who will outpace SLOW
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Era of Turbulent Change
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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Era of Turbulent Change
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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Era of Turbulent Change
Analysis of Environment:
1.Scanning
2.Monitoring3.Forecasting
4.Assessment
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Era of Turbulent Change
Analyze Environment SWOT
SStrengths
WWeaknessesOOpportunities
TThreats
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Era of Turbulent Change
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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Economic Environment
Structure of the Economy: Components
Primary Agriculture
Secondary Industry Tertiary Service
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Economic Environment
Economic Policies:
Industrial Policy
Trade Policy
Foreign Exchange
FDI / FPI
Monetary
Fiscal - Public Expenditure & Revenue
5 Year Plans
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Economic Environment
Economic Conditions:
Boom
Recession
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Economic Environment
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 Environment
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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Types of Forecasting
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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Types of Forecasting
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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Types of Forecasting
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