BUSINESS ENVIRONMENT

BUSINESSComplex field of commerce and

industry in which goods and services are created and distributed with a profit motive within a framework of laws and regulations.

Characteristics◦Dealings in goods and services◦Production/exchange◦Creation of form, place and time utility◦Continuity in dealings◦Profit motive

BUSINESS ENVIRONMENT

Refers to a set of internal and external factors which have a bearing on the functioning of the firm and determines opportunities and threats to the firms.

very important to analyze business environment to survive and to get success for a business in its industry

FEATURESSum total of all internal and

external factorsDynamic in natureUnpredictableDiffers from place to place

SIGNIFICANCEDetermining Opportunities and

ThreatsGiving Direction for GrowthContinuous LearningImage BuildingMeeting CompetitionIdentifying Firm’s Strength and

Weakness

ELEMENTS OF ENVIRONMENT

Internal elements External elements

INTERNAL FACTORS

Human resources & internal relationships

Company imageManagement structurePhysical assetsR & D and technological

capabilitiesMarketing resourcesFinancial factors

EXTERNAL FACTORSMicro environmental

◦Suppliers◦Consumers◦Competitors◦Middlemen◦Public

Macro environmental◦Demographic factors◦Economic factors◦Technological factors◦Political/legal factors◦Socio-cultural factors

CHANGING DIMENSIONS

ENVIRONMENTAL SCANNING

Defined as the study and interpretation of the political, economic, social and technological events and trends which influence a business, an industry or even a total market.

Factors need to be considered◦Events◦Trends◦Issues◦Expectations

MONITORINGdescribes the processes and

activities that need to take place to characterize and monitor the quality of the environment

Used in the preparation of environment impact assessments

Determines the current status of the environment

ECONOMIC ENVIRONMENT IN

BUSINESS

ECONOMIC PLANNING IN INDIA

INDUSTRIAL POLICY

FISCAL POLICY

MONETARY POLICY

EXPORT AND IMPORT POLICY

PUBLIC SECTOR AND ECONOMIC DEVELOPMENT

ECONOMIC REFORMS

LIBERALIZATION AND STRUCTURAL ADJUSTMENT PROGRAMMES