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Introduction to business environment slides


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Introduction to business environment slides

  2. 2. Introduction to Business Environment  Business environment consist of all those factors that have a bearing on the business. The term 'business environment implies those external forces, factors and institutions that are beyond the control of individual business organizations and their management and affect the business enterprise.
  3. 3.  These forces are customer, creditors, competitors, government, socio-cultural organizations, political parties national and international organizations etc. some of those forces affect the business directly which some others have indirect effect on the business.
  4. 4. TYPES OF ENVIRONMENT On the basis of the extent of intimacy with the firm , the environmental factors may be classified into different types-internal and external.
  5. 5. 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 control over these factors. It can alter or modify such factors as its personnel, physical facilities, and organization and functional means, like marketing, to suit the environment.
  6. 6. B) MISSION,VISION AND OBJECTIVES  Vision means the ability to think about the future with imagination and wisdom. Vision is an important factor in achieving the objectives of the organization. The mission is the medium through which the objectives are achieved.
  7. 7. What is External Environment?  External Environment of business consist of institution, organizations or forces operating outside the company.  The External Environment impact the company directly or indirectly.
  8. 8. Marketing Environment  Includes:  Microenvironment: actors close to the company that affect its ability to serve its customers.  Macro environment: larger societal forces that affect the microenvironment.  Considered to be beyond the control of the organization.
  9. 9. Suppliers:  Provide resources needed to produce goods and services.  Important link in the “value delivery system.”  Most marketers treat suppliers like partners.
  10. 10. Competitors  To be successful, a company must satisfy needs and wants of consumers better than competitors  A company should monitor three variables when analyzing each of its competitors – Share of Market – Share of Mind – Share of Heart
  11. 11. External Macro-Environment Forces External Macro-environment of a Company’s Marketing Program Social & Cultural forces Political & Legal forces Technology Demographics Competition Economic Conditions Company’s Marketing Program Six largely uncontrollable external forces influence an organization’s marketing activity
  12. 12. Natural Environment  Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.
  13. 13. Technological Environment Most dramatic force now shaping our destiny.
  14. 14. Cultural Environment  The institutions and other forces that affect a society’s basic values, perceptions, preference, and behaviors.
  15. 15. Marketing Management Themselves  Identify with brands for self- expression Others  Recent shift from “me” to “we” society Organizations  Trend of decline in trust and loyalty to companies Society  Patriotism on the rise Nature  “lifestyles of health and sustainability” (LOHAS) consumer segment Universe  Includes religion and spirituality Cultural Environment Includes people’s views of… Goal 4: Explore political and cultural environments
  16. 16. Increasing Legislation Changing Government Agency Enforcement Includes Laws, Government Agencies, Etc. that Influence & Limit Organizations/ Individuals in a Given Society Increased Emphasis on Ethics & Socially Responsible Actions Political Environment
  17. 17. Legal and Regulatory Environment  Laws and Regulations  for safety  for consumer protection  to protect special interests  Dangers of litigation--anyone can sue, and juries often buy it!  Examples:  Antitrust  Fair competition  Pricing  “Truth in Lending”--have to tell people real costs of financing; car leases now regulated
  18. 18. Economic Factors Inflation Employment Disposable income Business cycles Energy availability and cost Others?
  19. 19. Prepared By - Rishabh Agarwa  Economic Environment of Business By Mishra and Puri