ENTREPRENEURIAL ENVIRONMENT

ENTREPRENEURIAL ENVIRONMENT

Entrepreneurship Environment refers to the various facets within which enterprises big, medium and small and others have to operate. The environment influences the enterprise

The environment is created by Social, cultural, economic, legal, ecological, political and technological forces Environmental scanningEnvironmental scanning is a concept from business management by which businesses gather information from the environment, to better achieve a sustainable competitive advantage. To sustain competitive advantage the company must also respond to the information gathered from environmental scanning by altering its strategies and plans when the need arises.Socio cultural Factors Culture/Sub culture

Caste/colour/race scenario

Gender equation issue

Religion

Consumer attitudes

Lifestyles

Buyer motivation

Economic conditions

Capital System

Labour system

State and stage of economy

Money markets and liquidity issues

Banking and investment sector

Tariffs

Subsidies

Demand Conditions

Legal Environment

Legislative-Fiscal , monetary policy and reservations

Judiciary-Tax Laws, regulations like consumer protection

Ecological environment Natural environment-Biotic and abiotic components

National resource disparity among nations

Pollution and ecological degradation issues

Eco friendly groups

Political environment

Social groups/Parties

Secular parties

Nationalist

Fundamentalist

Communist parties

Backward politics

Regional parties/issues

Leadership issues

Stability issues

Vested interest

Technological environment Fundamental research

Applied research

Rate of obsolesces Technological risk

Competitors technology

Infrastructure technology-communication and transportation Suppliers technology

Innovations and upgrading rate

SLEPT analysis An investigation of the Social, Legal, Economic, Political, and Technological influences on a business.

SWOT Analysis

Constant monitoring of the environment is necessary to identify the emerging opportunities and threats

To understand to what extent a firm will be able to exploit the opportunities and fight the threats it is necessary to evaluate the strengths and weaknesses of the firm

Strength: attributes of the organization that are helpful to achieving the objective.Weaknesses: attributes of the organization that are harmful to achieving the objective.

Opportunities: external conditions that are helpful to achieving the objective.

Threats: external conditions that are harmful to achieving the objective.

SWOTs are used as inputs to the creative generation of possible strategies, by asking and answering the following four questions:

1. How can we Use each Strength?

2. How can we Stop each Weakness?

3. How can we Exploit each Opportunity?

4. How can we Defend/Destroy against each Threat?

Strengths and weaknessesHelps Company to decide whether the company should continue in a business ,take up new lines as well as the strategy to be employed in doing so

Done by functional audit (Quantity and quality of skills) of different areas like marketing, finance etc and also infrastructure support

Opportunities and threats

Monitoring the environmental changes is necessary to shape the companys business and products

Examples:Strengths and WeaknessesResources: financial, intellectual, locational ,Customer service ,Efficiency ,Competitive advantages ,Infrastructure ,Quality ,Staff ,Management ,Price ,Delivery time ,Cost ,Capacity ,Relationships with key industry customers ,Brand and Reputation in the Market ,Local Language Knowledge

Examples :Opportunities and ThreatsPolitical/Legal ,Market Trends ,Economic condition ,Expectations of stakeholders ,Technology ,Public expectations ,Competitors and competitive actions .

PEST analysisPEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macroenvironmental factors used in environmental scanning. It is also referred to as the STEP, STEEP or PESTLE analysis (Political, Economic, Socio-cultural, Technological, Legal, Environmental). Recently it was even further extended to STEEPLED, including ethics and demographics.

Sectoral AnalysisIt is evaluating of business opportunity on the sector in which it is accomodated

SectorsAgro and allied,Irrigation andpower,Industry and mining,Transport and communication,Social service,IT,Biotech and Miscellaneous

Parameters Studied Government Priority, Incentives/Fiscal/tax benfits, regional Restrictions, growth/Output restrictions/Control

Licenses /permit required

Environmental ban

Subsidies

Government discouragement Export promotion

Social reluctance

Classification of industry

Sunrise Industry

Immense profit potential

Uncertain growth

Complex requirements

Established or mature industry

Face environmental issues

Less dyamic

Prictable

Less complex

Examples: hydrogen fuel production, space travel for tourism and online encyclopedias.

Fragmented Industry

No one company has market domination

Low barriers to entry.

Lack of standardization, or lack of need for it.

Examples: Landscaping and plant nurseries, Auto repair, Restaurant industry , Clothing retailers etc