BusinessBusiness is an integral part of the ecology and social system

Organized efforts of and by enterprises to supply consumers with goods and services to the consumers for a profit.

It varies in size and is measured in terms of number of employees or by sales (turnover) volume.

Its decisions and performance are influenced by a host of diverse factors.

The purpose of business goes beyond just earning profit.

Business EnvironmentBE consists of all the factors that have a bearing on the

business-Strengths of a businessWeaknessesRelationships (external and internal)Orientation of the organizationGovernment policies and regulationsNature of economyEconomic conditionsSocio-cultural conditionsDemographicsGlobal trends and developments

Business ObjectivesVision: A broad explanation of why the firm exists and where

is it trying to lead…

It seeks to answer the following questionsWhere do we go from here?What changes lies ahead in the business landscape?What differences will these changes make to the company’s

present business?

The vision gives the organization a sense of purpose and a set of values that unite employees in a common density.

Contd…Mission: Outlines the fundamental purpose of the organisation.Vision statement: Where do we go from here?Then, Mission statement: What is our business? It gives a unique identity to the organisation and builds a path for

development.Four elements-

Customer needs, or what is being satisfiedCustomer groups, or who is being satisfiedThe company’s activities, technologies, and competencies or how the

firm goes about creating and delivering value to the customer and satisfying their needs.

The company’s concern for survival, its philosophy, its self-concept and its concern for public image.

Mission statements are more specific than vision statements….

Business GoalsProfitGrowthPowerEmployee Satisfaction and DevelopmentQuality products and servicesMarket leadershipService to society

Types of EnvironmentInternal Factors: generally regarded as controllable

factors because these are under the control of the management.Personnel, Physical facilities etc.

External factors: One’s that are not under the direct control of the management. These are the environmental factorsEconomic factors, socio-cultural factors, regulatory

framework, demographic factors.

Internal FactorsValue systemVision, Mission and ObjectivesManagement Structure Internal bonding/relationshipHuman resourcesPhysical assets and facilities like production capacity,

technology and efficiency of productive.R&D and technology capabilitiesFinancial policies and capital structure etc.Marketing resources and efficiency.

External FactorsMicro Environment

The factors that affect the company’s performance immediately-

Suppliers: supply the inputs like raw materials and components to the company.

Customer: A major task of a business is to create and sustain customers

Competitors: May market the same or similar product and compete for the pocket share of the consumers.

Marketing Intermediaries: Act as a link between the company and the final consumers.

Labour: One of the most important dimension of any business.Public: Any group that has an actual or potential interest in or

impact on an organisation’s ability to achieve its interest.

Macro EnvironmentGlobal Environment

Increasing opportunities as world has become one marketImproving qualityCompetition from MNCsCapital and technology transfersDeciding which markets to enter and how to enterAdjusting management processesIndia and WTO

Contd…Technological Environment

Technology reaches people through business.Increased productivity Need to spend on R&DFast changing technologyRise and decline of products and organisationsHigh expectations of consumersProblem of techno structureSystem complexityIncreased regulation and stiff oppositionDemand for capitalSocial changes

Contd…Economic Environment

Growth strategyEconomic systemIndustryAgricultureInfrastructureMoney and capital marketsPer capita and national incomePopulationNew economic policy

Contd…

Political Environment

Role of legislatureRole of executiveRole of judiciaryConstitution of IndiaNew directions for government role

Contd… Social-Cultural Environment

Culture creates peopleCulture and globalisationDetermines goods and servicesDetermines people’s attitude to business and workCaste systemSpirit of collectivism and individualisationEducationFamily and marriageScientific spiritEthics in businessSocial responsibilityCorporate governance

Contd…Natural Environment

Manufacturing depends on physical inputsMining and drilling depends upon natural depositsAgriculture depends on natureTrade between two regions depend upon the

geographical factorsTransport and communication depend on geographical

factors

Contd…Demographic Environment

Population in terms of number or decline/growth over a period

Composition in terms of age, gender, household size etc.Economic strataCaste, religion, political affiliationsEducational status etc.

Environment AnalysisScanning: Involves general surveillance of all environmental

factors and their in order to-

Identify early signals of possible environmental changeDetect environmental change already under way

It is ambiguous environmental analysis activity.

The relevant data for scanning are unlimited but scattered, vague and imprecise

Contd…Monitoring: Involves tracking the environmental trends

The purpose is to assemble sufficient data to discern whether certain trends and patterns are emerging. Therefore, in this case the data turns frequently from imprecise to precise.

Three outcomes of monitoring:A specific description of environmental trends and patterns

to be forecastIdentification of trends for further monitoringIdentification areas for further scanning

Contd…Forecasting: It is concerned with developing plausible

projections of the directions, scope and intensity of environmental change.

Aims at laying out and evolutionary path of anticipated change.

Unlike, scanning and monitoring, it is more deductive and complex activity

Contd…Assessment: Required to determine implications for

organisation’s current and potential strategies.

Involves identifying and evaluating how and why current and projected environmental changes affect or will affect strategic management of the organisation.

It tries to answer questions such as-What are the key issues presented by the environment?What are the implications of such issues?

E-CommerceElectronic commerce, commonly known as e-commerce, is the

buying and selling of product or service over electronic systems such as the Internet and other computer networks.

Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.

The World Wide Web (WWW), is a system of interlinked hypertext documents accessed via the Internet. With a web browser, one can view web pages that may contain text, images, videos, and other multimedia, and navigate between them via hyperlinks.

Contd…E-commerce can be divided into:

E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"

The gathering and use of demographic data through Web contacts and social media

Electronic Data Interchange (EDI), the business-to-business exchange of data

E-mail and fax and their use as media for reaching prospects and established customers (for example, with catalogues, Newsletters)

Business-to-Business buying and sellingThe security of business transactions

Objectives of E-CommerceDeveloping and enhancing businessIncreasing the customer baseOffering better customer serviceConvenience