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INTRODUCTION
TO
BUSINESS
ENVIRONMENT
External Environment
Reporters :
Eugene Aldrich Paguirigan
John Soriano
Alfreda Abis
WHAT IS BUSINESS ENVIRONMENT?
 Environment of any organization is “the aggregate of all
conditions, events and influences...
TYPES OF ENVIRONMENT?
 Internal Environment
 External Environment
 Micro Environment
 Macro Environment
EXTERNAL ENVIRONMENT
 Factors outside the organization which provide opportunities or
pose threats to the organization
 ...
Micro Environment
 Refers to the environment which is in direct contact with the
business organization and can affect the...
Micro Environment
 SUPPLIERS
Suppliers are the persons who supply raw material to
company.
 CUSTOMERS
Customers are the ...
Micro Environment
 MARKETING INTERMEDIARIES
Market intermediaries are those person who helps
company to sell its products...
Micro Environment
 PUBLIC
Group of people who can buy or who can show their
interest to buy the products of company.
 FI...
Macro Environment
 Refers to the external factors which affects company and its
business and there is no control of compa...
Macro Environment
 ECONOMIC
The economic environment constitutes of economic
conditions, economic policies, and the econo...
Macro Environment
 NON-ECONOMIC
Political and Legal Forces
Refers to the political, government and legal environment.
It ...
Macro Environment
 NON-ECONOMIC
Demographic Forces
Demography refers to study of the population.
Demographic factors are ...
Macro Environment
 NON-ECONOMIC
Socio-Cultural Forces
Socio-cultural environment is an important factor that
should be an...
Macro Environment
 NON-ECONOMIC
Technological Forces
Technological forces or factors could be said to be the most
pervasi...
Macro Environment
 NON-ECONOMIC
Natural Forces
The natural environment includes geographical and
ecological factors that ...
BRIEF COMPARISON (MICRO – MACRO)
BASIS FOR
COMPARISON
MICRO (INTERNAL) ENVIRONMENT MACRO (EXTERNAL) ENVIRONMENT
Meaning
Mi...
 Environmental analysis is a strategic tool. It is
a process to identify all the external and
internal elements, which ca...
 DEFINITION AND CONCEPT
It a process of conducting research on
the business environment within which an
organization oper...
 PEST Analysis
 PESTLE Analysis
 STEEP Analysis
 STEEPLE Analysis
Examples of Analytical Method used in
Strategic Anal...
This is a framework used to analyze the
external environmental analysis. The process
entails learning about various extern...
 POLITICAL
These include government
regulation such as employment laws,
environmental organizations and tax policy.
Other...
 ECONOMIC
These affect the cost of capital and
purchasing power of an organization. Economic
factors include economic gro...
 SOCIAL
These impact on customer’s need and
the potential market size for an organization’s
goods and services. Social fa...
 TECHNOLOGICAL
These influence barriers to entry, make
or buy decisions and investment in innovation,
such as automation,...
 LEGAL
This factor has both external and
internal sides. There are certain laws that affect
the business/organization env...
 ENVIRONMENTAL
this factor includes all those that
influence or are determined by more the
surrounding environment.
PESTL...
END OF
PRESENTATION
THANK YOU
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External environment of Organization

  1. 1. INTRODUCTION TO BUSINESS ENVIRONMENT External Environment Reporters : Eugene Aldrich Paguirigan John Soriano Alfreda Abis
  2. 2. WHAT IS BUSINESS ENVIRONMENT?  Environment of any organization is “the aggregate of all conditions, events and influences that surround and affect it”.  The combination of internal and external factors that influence a company’s or business operating situation.
  3. 3. TYPES OF ENVIRONMENT?  Internal Environment  External Environment  Micro Environment  Macro Environment
  4. 4. EXTERNAL ENVIRONMENT  Factors outside the organization which provide opportunities or pose threats to the organization  Factors that can impact the ability of a business or investment to achieve its strategic goals and objectives.  Uncontrollable factors  Classified into two categories  Micro  Macro
  5. 5. Micro Environment  Refers to the environment which is in direct contact with the business organization and can affect the routine activities of business straight away.  Types of Factors  Suppliers  Customers  Marketing Intermediaries  Competitors  Publics  Financial Intermediaries
  6. 6. Micro Environment  SUPPLIERS Suppliers are the persons who supply raw material to company.  CUSTOMERS Customers are the persons who buy goods from company.
  7. 7. Micro Environment  MARKETING INTERMEDIARIES Market intermediaries are those person who helps company to sell its products.  COMPETITORS Competitors are those who also sell same product as the company or business.
  8. 8. Micro Environment  PUBLIC Group of people who can buy or who can show their interest to buy the products of company.  FINANCIAL INTERMEDIARIES Are those institutions who provide loan, credit and advance to company.
  9. 9. Macro Environment  Refers to the external factors which affects company and its business and there is no control of company on these factors.  Types of Factors  Economic  Non-Economic  Political  Demographic  Socio-Cultural  Technological  Natural
  10. 10. Macro Environment  ECONOMIC The economic environment constitutes of economic conditions, economic policies, and the economic system that is important to external factors of business. Economic environment refers to the nature and direction of the economy within which business organisation are to operate. insert picture background
  11. 11. Macro Environment  NON-ECONOMIC Political and Legal Forces Refers to the political, government and legal environment. It has close relationship with the economic system and economic policy. This refers to set of laws, regulations, which influence the business organizations and their operations
  12. 12. Macro Environment  NON-ECONOMIC Demographic Forces Demography refers to study of the population. Demographic factors are as below:  Size of population  Growth rate  Family size  Educational level  Age composition  Sex composition
  13. 13. Macro Environment  NON-ECONOMIC Socio-Cultural Forces Socio-cultural environment is an important factor that should be analysed while formulating company business strategies. These includes people’s attitude to work and wealth, ethical issues, role of family, marriage, religion and education and the social responsibilities of business
  14. 14. Macro Environment  NON-ECONOMIC Technological Forces Technological forces or factors could be said to be the most pervasive in the environment. Technology refers to the application of knowledge base which science provides. It is a well established fact that information and communication technology has revolutionized business operations
  15. 15. Macro Environment  NON-ECONOMIC Natural Forces The natural environment includes geographical and ecological factors that influence the business operations. These factors include the availability of natural resources, weather and climatic condition, location aspect, topographical factors, etc
  16. 16. BRIEF COMPARISON (MICRO – MACRO) BASIS FOR COMPARISON MICRO (INTERNAL) ENVIRONMENT MACRO (EXTERNAL) ENVIRONMENT Meaning Micro environment is defined as the nearby environment, under which the firm operates. Macro environment refers to the general environment, that can affect the working of all business enterprises. Alternatively known as Internal Environment External Environment Elements COSMIC, i.e. Competitors, Organization itself, Suppliers, Market, Intermediaries and Customers. PESTLE, i.e. Population & Demographic, Economic, Socio-Cultural, Technological, Legal & Political and Environmental. Nature of elements Specific General Are these factors controllable? Yes No Influence Directly and Regularly Indirectly and Distantly
  17. 17.  Environmental analysis is a strategic tool. It is a process to identify all the external and internal elements, which can affect the organization’s performance. The analysis entails assessing the level of threat or opportunity the factors might present What is Environmental Analysis?
  18. 18.  DEFINITION AND CONCEPT It a process of conducting research on the business environment within which an organization operates and on the organization itself, in order to formulate strategy. STRATEGIC ANALYTICAL TOOLS
  19. 19.  PEST Analysis  PESTLE Analysis  STEEP Analysis  STEEPLE Analysis Examples of Analytical Method used in Strategic Analysis
  20. 20. This is a framework used to analyze the external environmental analysis. The process entails learning about various external factors which affect the organization. PESTLE Analysis
  21. 21.  POLITICAL These include government regulation such as employment laws, environmental organizations and tax policy. Other political factors are trade restrictions and political stability PESTLE Analysis
  22. 22.  ECONOMIC These affect the cost of capital and purchasing power of an organization. Economic factors include economic growth, interest rates, inflation and currency exchange rates PESTLE Analysis
  23. 23.  SOCIAL These impact on customer’s need and the potential market size for an organization’s goods and services. Social factors include population growth, age demographics and attitude towards health. PESTLE Analysis
  24. 24.  TECHNOLOGICAL These influence barriers to entry, make or buy decisions and investment in innovation, such as automation, investment incentives and the rate of technological change. PESTLE Analysis
  25. 25.  LEGAL This factor has both external and internal sides. There are certain laws that affect the business/organization environment in a certain country while there are certain policies that companies maintain for themselves. PESTLE Analysis
  26. 26.  ENVIRONMENTAL this factor includes all those that influence or are determined by more the surrounding environment. PESTLE Analysis
  27. 27. END OF PRESENTATION THANK YOU
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