BUSINESS ENVIRONMENT
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all essentials about business environment Module 1
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BUSINESS ENVIRONMENT
- 1. BUSINESS ENVIRONMENT Anujith KR Introduction, Concepts, Features, Factors, Environmental Awareness Vs Environmental Scanning
- 2. Business Environment • Concept • Types Internal – 5Ms External
- 3. Significance/Features • Needs = Goods & Services • Dynamic conditions (IT & ITES Boom)(Inflation, deflation, stagflation) • Policies & Resources = Social needs • CSR (e-choupal, drishti) • Decipher factors that affect functioning • Strategies (Long Term or Short Term?) • Competitor Strategies and Counter Strategies • Impact of Socio-Economic Change • Conducive Environment (Money value depreciation) • SWOT • Growth • Continuous Learning & Image Building (Related Terms?)
- 6. Factors • Socio-Cultural • Economic • Geographic • Technological • Political • Legal • Ecological • Government Policies • Values, Tastes, Preferences, Norms, Beliefs (Mc Donald's, KFC), Process Improvers • Percapita income, national income, infrastructure(The per capita income at current prices during 2012-13 is estimated to be Rs 68,747 as compared to Rs 61,564 during 2011-12, showing a rise of 11.7%," an official release by the Central Statistics Office (CSO) Kerala – INR 83,725 • Benetton • MRTP, FERA, IPR, Licensing, Collaborations • CMP– Mahatma Gandhi National Rural Employment Guarantee Scheme, e-Governance, women status • Factories Act, CPA, EPA, MRTP Act, Companies Act • EPA, Water Prevention & Control of Pollution Act , Air Prevention & Control of Pollution Act. • Trade Policies, Foreign Exchange, Labour, Monetary & Fiscal, Taxation, Export-Import
- 7. Factors • Labour • Market Conditions • Locational • Organizational • Miscellaneous • Ecological • Global • AITUC, INTUC, ILO • Monopoly vs Oligopoly, Perfect vs Imperfect • Taxation, Licensing, Incentives Policy • Brand Equity & Values - Infosys- Knowledge Pool • Shareholding – Wipro vs Tata • R&D- Nokia, Samsung • PETA, • WTO, EU, WHO, UN
- 8. Environmental Analysis Approaches Techniques • Inside - Out vs. Outside – In • Information Gathering • Search & Scanning – Clipping, MIS • Espionage • Formal Forecasting
- 9. Environmental Awareness Vs Scanning Vs Monitoring
- 10. Environmental Scanning - Techniques
- 11. SWOT Analysis • Corporate Planning, Set Objectives, KRA & CSF, Analyze Existing strategy, Strategic Issues, Revise strategy, Implementation & Monitoring
- 12. Industry Analysis Porter’s 5 Forces
- 13. ‘Think Global, Act Local’ – Caselet 1 • Prestructural – To be one among the pioneers like GM, Apple, Toyota • Unistructural – Counter strategy to Outperform competitors, Expansion Strategy • Multistructural –Internal and External factors – Environment scanning • Relational – Socio-cultural Impact (Heinz Ketchup, HUL detergents, Mc. Donald's), Unity in diversity • Out of Box Thinking – Cultural adaptation, Societal transition.
- 14. Competitor Analysis • Future Objectives • Current Strategy • Assumptions • Capabilities
Editor's Notes
- 'Stagflation' A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. WINNERS & LOSERS- Rupee depreciation Every rupee depreciation increases India’s annual oil import bill by Rs10,000 crore (0.1% of GDP) Bharti’s financials could see significantly negative impact if translation impact on forex debt of $ 9 bn is routed through P&L ONGC (- 4%) to be impacted due to higher subsidy sharing Material EPS impact for Tata Steel (+ 23%), Hindalco (+22%) In IT, HCL Tech (+17 per cent) and Infosys (+13 per cent) should benefit more than TCS (7 per cent) and Wipro (7.7 per cent) Hero MotoCorp and Maruti will likely see 21-22 per cent impact on current EPS as raw material costs and royalty payments are linked to foreign currencies, more than offsetting any positive impact of exports
- 'Carbon Credit' A permit that allows the holder to emit one ton of carbon dioxide. Credits are awarded to countries or groups that have reduced their green house gases below their emission quota. Carbon credits can be traded in the international market at their current market price. The carbon credit system was ratified in conjunction with the Kyoto Protocol. Its goal is to stop the increase of carbon dioxide emissions. For example, if an environmentalist group plants enough trees to reduce emissions by one ton, the group will be awarded a credit. If a steel producer has an emissions quota of 10 tons, but is expecting to produce 11 tons, it could purchase this carbon credit from the environmental group. The carbon credit system looks to reduce emissions by having countries honor their emission quotas and offer incentives for being below them. In 1996 the Kyoto Protocol established a global policy aimed at reducing green house gas (GHG) emissions. In response, slow steady steps are being taken to implement carbon emission limits. Markets are being established so that companies can exchange carbon allowances. Turning the environment, a public good, into private property presents many economic challenges.India comes under the third category of signatories to UNFCCC. India signed and ratified the Protocol in August, 2002 and has emerged as a world leader in reduction of greenhouse gases by adopting Clean Development Mechanisms (CDMs) in the past few years. According to Report on National Action Plan for operationalising Clean Development Mechanism(CDM) by Planning Commission, Govt. of India, the total CO2-equivalent emissions in 1990 were 10, 01, 352 Gg (Gigagrams), which was approximately 3% of global emissions. So, we need to understand the important aspects for the carbon credits and its accounting norms for future improvement in environment.
- 1.Folklores 2. Pizza Outlets 3. ‘Better Things through Chemistry’ – Du pont 4. R&d 5. Toyota’s need for constant supply of rawmaterials 6. PETA 7. Russian Collaboration with India – Bikaner district 8. CSR 9. Nike products 10. Great depression 11. Wonder La and PVR 12. Centralized 13. WTO Regulations 14. Talent Pool in Infosys 15. ‘To increment the profits to 120% within the next financial year.’ 16. FDI in Retail 17. Registration of Companies 18. ILO ESOP Carbon Credit
- TELCO worked with IDEO, Italy for design of the indigenous car, Indica. Similarly, Ranbaxy Laboratories had developed a drug delivery system for Novo Nordisk, Denmark. Trade Unions Act, 1926 provides for the registration of the Trade Unions with the Registrars of Trade Unions of their territory. Foreign Exchange Regulation Act (FERA) was legislation passed by the Indian Parliament in 1973 by the government of Indira Gandhi and came into force with effect from January 1, 1974. FERA imposed stringent regulations on certain kinds of payments, the dealings in foreign exchange and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency. The bill was formulated with the aim of regulating payments and foreign exchange. Coca-Cola was India's leading soft drink until 1977 when it left India after a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign Exchange Regulation Act (FERA). In 1993, the company (along with PepsiCo) returned after the introduction of India's Liberalization policy. FERA was repealed in 1998 by the government of Atal Bihari Vajpayee and replaced by the Foreign Exchange Management Act, which liberalised foreign exchange controls and restrictions on foreign investment.
- The World Health Organization (WHO) is a specialized agency of the United Nations (UN) that is concerned with international public health. It was established on 7 April 1948, with headquarters in Geneva, Switzerland, and is a member of the United Nations Development Group. Its predecessor, the Health Organization, was an agency of the League of Nations. The constitution of the World Health Organization had been signed by all 61 countries of the United Nations by 22 July 1946, with the first meeting of the World Health Assembly finishing on 24 July 1948. It incorporated the Office International d'Hygiène Publique and the League of Nations Health Organization. Since its creation, WHO has been responsible for playing a leading role in the eradication of smallpox. Its current priorities include communicable diseases, in particular, HIV/AIDS, malaria and tuberculosis; the mitigation of the effects of non-communicable diseases; sexual and reproductive health, development, and aging; nutrition, food security and healthy eating; occupational health; substance abuse; and drive the development of reporting, publications, and networking. WHO is responsible for the World Health Report, a leading international publication on health, the worldwide World Health Survey, and World Health Day (7th-April of every Year). India was a founding member of the United Nations, joining in October 1945, two years before acquiring independence from the United Kingdom. In 1953, the chief delegate of India at the time, Vijaya Lakshmi Pandit was elected the first woman President of the UN General Assembly. As a prominent member of the Non-Aligned Movement that started in 1955, India had traditionally represented the interests of the developing nations (or third world nations, as they were known at that time) and supported the struggle against colonialism and apartheid, its struggle towards global disarmament and the ending of the arms race, and towards the creation of a more equitable international economic order. In the early 1950s, India attempted, like the Soviet Union, unsuccessfully to help the People's Republic of China join the UN but was rebuffed by Western powers. India also had a mediatory role in resolving the stalemate over prisoners of war in Korea contributing to the signing of the armistice ending the Korean War in 1953. India chaired the five-member Neutral Nations Repatriation Commission while the Indian Custodian Force supervised the process of interviews and repatriation that followed. The UN entrusted Indian armed forces with subsequent peace missions in the Middle East, Cyprus, and the Congo (since 1971, Zaire). India also served as chair of the three international commissions for supervision and control for Vietnam, Cambodia, and Laos established by the 1954 Geneva Accords on Indochina. India also has served as a member of many UN bodies — including the Economic and Social Council, the Human Rights Commission, and the Disarmament Commission — and on the board of governors of the International Atomic Energy Agency. In addition, India played a prominent role in articulating the economic concerns of developing countries in such UN-sponsored conferences as the triennial UN Conference on Trade and Development and the 1992 Conference on the Environment and Development in Rio de Janeiro.[2] It has been an active member of the Group of 77, and later the core group of the G-15 nations. Other issues, such as environmentally sustainable development and the promotion and protection of human rights, have also been an important focus of India's foreign policy in international forums.
- Differentiate between Objectives, Mission, Vision, Policies, Rules, Procedures, Programme.
- Suppliers – Hyundai, Toyota
- Caselet – 2: KFC, Mc. Donald's and pizza outlets are thriving in India.
- Political – FDI in Retail, BJP protests against cow slaughter, FERA and FEMA, 1977 Government declaration – HLL & P&G stayed, Coke & IBM left. Economic - FDI in China, India, US. Liberalization in India EPZ, SEZ, FTZ GDP, GNP, NI GDP = consumption + investment + (government spending) + (exports − imports) GNP = GDP + NR (Net income inflow from assets abroad or Net Income Receipts) - NP (Net payment outflow to foreign assets) National income is the total value a country’s final output of all new goods and services produced in one year. A free trade zone (FTZ) or export processing zone (EPZ), also called foreign-trade zone, formerly free port is an area within which goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties. Free-trade zones are organized around major seaports, international airports, and national frontiers—areas with many geographic advantages for trade. A Special Economic Zone (SEZ) is a geographical region that has economic laws that are more liberal than a country's typical economic laws. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export processing zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free ports, Urban Enterprise Zones and others. Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a Multi National Corporation (MNC). SEZs set up by the Central Government Kandla Special Economic Zone Kandla, Gujarat Multi product SEEPZ Special Economic Zone Mumbai, Maharashtra Electronics and Gems and Jewellery Noida Special Economic Zone Uttar Pradesh Multi product MEPZ Special Economic Zone Chennai, Tamil Nadu Multi product Cochin Special Economic zone Cochin, Kerala Multi product Falta Special Economic Zone Falta, West Bengal Multi product Visakhapatnam SEZ Visakhapatnam, Andhra Pradesh Multi product Social – Social Structure- Western (Individualism) Vs Asian (Team Work) Social Stratification – Class Conscious (Italy, Greece, Spain, Australia & Britain) unlike Japan & US. Technological – Tata Swach, Home infotainment Network Legal – Tax Holiday, Heavy Taxes on Tobacco & Alcohol Session I - Class Activity Match The Following Caselet Session I – Homework SWOT Analysis BCG Matrix Caselet