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INTRODUCTION
A business environment influences the functioning of the business
system. Therefore, a business environment may be defined as all those conditions and forces which are external to the business and are beyond the individual business unit, but they all operate within it. These forces are customers, creditors, competitors, government, socio-cultural organizations, political parties national and
BUSINESS ENVIRONMENT
The term Business Environment is composed of two words Business and Environment. In simple terms, the state in which a person remains busy is known as Business. The word Business in its economic sense means human activities like production, extraction or purchase or sales of goods that are performed for earning profits. On the other hand, the word Environment refers to the aspects of surroundings. There fore , Business Environment may be defined as a set of conditions Social, Legal, Economical, Political or Institutional that are uncontrollable in nature and affects the functioning of organization
to change them
TYPES
Business environments are the sum total of all things external to business firms and are aggregative in nature. Business Environment has two components: 1. Internal Environment 2. External Environment
EXTERNAL ENVIRONMENT
The external environment covers parts of the organization which are usually unable to be controlled within the organization and include factors such as social, legal,
society,
government
and
stakeholders.
INTERNAL ENVIRONMENT
The internal environment is the environment that has a direct impact on the business. Here there are some internal factors which are generally controllable because the company has power over these factors. It can alter or modify factors such as its personnel, physical facilities, and organization and functional means, like marketing, to suit the current environment. The value system of the founders and those at the helm of affairs has an important bearing on the choice of the business, its mission and the objectives of the
The different environmental factors that affect the business can be broadly categorized as internal ands has its own external factors
INTERNAL FACTORS
EXTERNAL FACTORS
INTERNAL FACTORS
Internal factors are those factors which exist within the premises of an organization and directly affects the different operations carried out in a business. These internal factors are : VALUE SYSTEM : It implies the culture and norms of the business. In other words, it means the regulatory framework of a business and every member of the organization has to act within the limits of this framework. MISSIONS AND OBJECTIVES : Different priorities, policies and philosophies of a
EXTERNAL FACTORS
The EXTERNAL FACTORS include all those factors which exists outside the firm and are often regarded as uncontrollable.. These external forces can further be categorized as
SUPPLIERS : Suppliers are those people who are responsible for supplying necessary inputs to the organization and ensure the smooth flow of production. COMPETITORS : Competitors can be called the close rivals and in order to survive
the competition one has to keep a close look in the market and formulate its policies
and strategies as such to face the competition.
MARKETING INTERMEDIARIES : Marketing intermediaries aid the company in promoting, selling and distribution of the goods and services to its final users. Therefore, marketing intermediaries are vital link between the business and the consumers.
EXTERNAL FACTORS
MICRO ENVIRONMENT
SUPPLIERS : Suppliers are those people who are responsible for
supplying necessary inputs to the organization and ensure the smooth flow of production. COMPETITORS : Competitors can be called the close rivals and in order to survive the competition one has to keep a close look in the market and formulate its policies and strategies as such to face the competition. MARKETING INTERMEDIARIES : Marketing intermediaries aid the
MACRO ENVIRONMENT
ECONOMIC FACTORS : Economic factors includes economic conditions and economic policies that together constitutes the economic environment. These includes growth rate, in fation, restrictive trade practices etc. Which have a
1. 2. 3. 4. 5. 6. 7. 8.
Social Political Financial Product Quality Distribution Channels Promotional Channels Manufacturing Employee
1.Physical-natural factors 2.Social-cultural factors 3.Technological factors 4.Economic factors 5.Political-legal factors
6.Competitive factors