Made by: A
Introduction to Business
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.
These forces are customer,
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.
TYPES OF ENVIRONMENT
On the basis of the extent of intimacy with
the firm , the environmental factors may
classified into different types-internal
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.
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.
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.
Microenvironment: actors close to the company that affect its ability to serve
Macro environment: larger societal forces that affect the microenvironment.
Considered to be beyond the control of the organization.
Provide resources needed to
produce goods and services.
Important link in the “value delivery
Most marketers treat suppliers like
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
External Macro-Environment Forces
External Macro-environment of a Company’s Marketing Program
Six largely uncontrollable external forces influence an organization’s marketing activity
Involves the natural resources that
are needed as inputs by marketers or
that are affected by marketing
The institutions and other
forces that affect a society’s
basic values, perceptions,
preference, and behaviors.
brands for self-
Recent shift from
“me” to “we”
Trend of decline in
trust and loyalty
Patriotism on the
“lifestyles of health
Includes people’s views of…
Goal 4: Explore political and cultural environments
Includes Laws, Government Agencies, Etc. that Influence
& Limit Organizations/ Individuals in a Given Society
Legal and Regulatory Environment
Laws and Regulations
for consumer protection
to protect special interests
Dangers of litigation--anyone can
sue, and juries often buy it!
“Truth in Lending”--have to tell
people real costs of financing; car
leases now regulated
Energy availability and cost
Economic Environment of Business
By Mishra and Puri