(23) business environmennt ppt ah authors

1. BUSINESS
ENVIRONMENT

2. 2
N. HARIHARAN BCOM CS.,DTP.,DOA
BCOM CS , SECOND YEAR
A. AMUTHA
3RD CHEMESTRY
ARULMIGU PALANIANDAVAR ARTS
COLLEGE FOR WOMEN

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DEFENITION AND MEANING
DEFINITION
The definition of business environment means all of the internal and
external factors that affect how the company functions including
employees, customers, management, supply and demand and business
regulations.
MEANING
The term ‘business environment’ connotes external forces, factors and
institutions that are beyond the control of the business and they affect
the functioning of a business enterprise. These include customers,
competitors, suppliers, government, and the social, political, legal and
technological factors etc.

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FEATURES OF BUSINESS ENVIRONMENT
 Business environment is the sum total of all factors external to the
business firm and that greatly influence their functioning.
 It covers factors and forces like customers, competitors, suppliers,
government, and the social, cultural, political, technological and legal
conditions.
 The business environment is dynamic in nature, that means, it keeps
on changing.

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FEATURES OF
BUSINESSENVIRONMENT..
 The changes in business environment are unpredictable. It is very
difficult to predict the exact nature of future happenings and the
changes in economic and social environment.
 Business Environment differs from place to place, region to region
and country to country. Political conditions in India differ from those in
Pakistan. Taste and values cherished by people in India and China vary
considerably.

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IMPORTANCE
Image Building:
Environmental understanding helps the business organizations in improving
their image by showing their sensitivity to the environment within which they are
working. For example, in view of the shortage of power, many companies have
set up Captive Power Plants (CPP) in their factories to meet their own
requirement of power.
Meeting Competition
It helps the firms to analyze the competitors’ strategies and formulate their
own strategies accordingly. (f) Identifying Firm’s Strength and Weakness: Business
environment helps to identify the individual strengths and weaknesses in view of
the technological and global developments.

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OBJECTIVES
Every business enterprise has certain objectives which regulate and
generate its activities. Objectives are needed in every area where
performance and results directly affect survival and prosperity of a
business. The vision of Infosys
“To be globally respected corporation that provides best-of-breed
business solutions, leveraging technology, vendors and society at large.”

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ROBOSOFT TECHNOLOGIES VISION
Creating memorable products for the world market by attracting and
empowering the best minds MISSION To consistently win best-of- show and
best-of-class awards for our products PURPOSE To artistically design,
professionally develop, attentively test software & hardware products to
make them easily accessible to millions of consumers which, in turn, will give
the best to our people & customers
Rob soft Technologies is an Indian information technology company
which provides software product development services. Rob soft was
founded in 1996 by Reith Bhatt, who established the company to develop
software products for theme market. The company's Corporate Office is
located in Santhekatte near Dupe on National Highway 66.

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Economic objectives
Economic objectives Business is basically an economic activity.
Therefore, its primary objectives are economic in nature. The main
economic objectives of business are as follows
(I) Earning profits
(ii) Creating customers
(iii) Innovations

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HUMAN OBJECTIVES
Business is run by people and for people. Labor is a valuable human
element in business. Human objectives of business are concerned with
the well-being of labor. These objectives help in achieving economic and
social objectives of business
 Labor welfare Developing human resources
Participative management Labor management cooperation

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common entry barriers
The common entry barriers Important are
 Government Policy
 Economies Of Scale
 Cost Disadvantages Independent Of Scale
 Product Differentiation
 Monopoly Elements
 Capital Requirements

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BARGAINING POWER OF BUYERS
The determinants of the buyer power, explained by Porter, are the
following
 The volume of purchase relative to the total sale of the seller.
 The importance of the product to the buyer in terms of the total cost.
 The extent of standardization or differentiation of the product.
 Switching costs.

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BARGAINING POWER OF BUYERS
 Profitability of the buyer (low profitability tends to pressure costs
down).
 Potential for backward integration by buyer.
 Importance of the industry’s product with respect to the quality of the
buyer’s product or services. 8.Extent of buyers' information.

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STRATEGIC GROUPS
According to Porter, “a strategic group is the group of firms in an
industry following the same or similar strategy along the strategic
dimensions’’. Normally , a small number of strategic groups capture the
essential strategic differences among firms in the industry although one
may even think of the extreme cases of an industry having only one
strategic group on the one end and each firm in an industry amounting to
a strategic group on the other end.

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IMPLICATIONS OF STRATEGIC GROUPS
This concept has implications for industry analysis & identification of
opportunities & threats 1.A company’s immediate competitors are firms
within the same strategic group 2.The nature and intensity of competition &
business prospects vary from strategic group to group. 3.High mobility
barriers normally help insulate the group from new entrants and facilitate
high profitability. 4.Just like entry barriers, mobility barriers can change; &
as they do firms often abandon some strategic groups & jump into new
ones, changing the pattern of strategic group. 5.The competitive standing of
the different strategic groups would be different with respect to each of the
five competitive forces.

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LIMITATIONS OF PORTERIAN MODELS
Porter has recognized the role of innovation in revolutionizing industry
structure. Innovations, according to him, can unfreeze & reshape industry
structure. MICHAEL PORTER
ENVIRONMENTAL ANLYSIS & STRATEGIC MANAGEMENT
Chandler describes strategic management as “the determination of the
basic long-term goals & objectives of an enterprise & the adoption of
courses and allocation of resources necessary to carry out these goals”
Strategic management or business policy is, thus , the means to achieve the
organizational purpose

17. Thank You.
N. Harihran , A. Amutha
ahslideshare@gmail.com
www.slideshare.net/Hariharanamutha1/
9345020835

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ENVIRONMENTAL ANLYSIS & STRATEGIC
MANAGEMENT
Formulation of
Mission &
Objectives
SWOT Analysis
Strategic
Alternatives &
Choice of
Strategy
Implementation Evaluation