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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