BUSINESS ENVIORNMENT

A Presentation by: Ajay S Nair

S1 MBAMIIT.AYUR

• BUSINESS ENVIRONMENT : CONCEPTS & SIGNIFICANCE

Introduction

• The term Business Environment is composed of two words ‘Business’ and ‘Environment’.

• 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.

Introduction (Contd..)

• Environment’ refers to the aspects of surroundings.

• Therefore, Business Environment may be defined as a set of conditions

Intro (contd..)

• Conditions include : Social, Legal, Economical, Political or Institutional that are uncontrollable in nature and affects the functioning of organization. Business Environment has two components:

Concept of Business Environment

• Business firm is open system• Gets resources from environment & supplies

goods/services to environment• Environment has mainly 2 forces– Internal forces– External forces

External forces

• Includes forces from– National level– Regional level– International level

• These provide either threats or opportunities to Business community.

External forces (contd..)

• The business environment or the external forces acting on the business consists of a large number of forces.

:: These are.• Demographic• Economic• Geographical• Ecological• Social and Cultural• Political & Legal• Technological

Significance

• Its very important for Business firms to understand their environment and changes occurring in it.

• The B firms should study the environment and must adapt the changes to become successful.

• In a long-run its hard for firms to survive if they wont adapt the change.

• Knowledge of environmental changes is very helpful in formulation & implementation of business plans.

Environment scanning

• DEF: “Environmental scanning is the process by which organisations monitor their relevent environment to identify opportunities & threats affecting their business”

Benefits of understanding environment

• First Mover Advantage• Early Warning Signal• Customer Focus• Strategy Formulation• Change Agent• Public Image• Continues learning

Thankyou.