BUSINESS ENVIRONMENT

1
.Mr.CharakRay.
ASST.PROFESSOR(FINANCE)
MBA(BHU),ASSOCIATE((III),PGDHI(III)
BCM(BHSE),SENIOR(ST.JA)

2
.Mr.CharakRay.
•Means the external forces influencing
the business decisions
•In the form of economic, social,
political and technological factors and
•Are outside the control of the
business.

3
.Mr.CharakRay.
Relativity
External forces
Dynamic Nature
Uncertainty
Complexity
Element of Inter-relatedness
Specific And Forces General

4
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •Differs from country to country and even
region to region.
• Political conditions in the Gujarat is different
from Kashmir

5
.Mr.CharakRay.
Sum total of all things external to
business firms
And aggregative in nature brings
both threats
and
opportunities
Bajaj auto has stop
manufacturing scooter and
concentrating on motor cycle
Threat Opportunity
Demand for scooter
is falling
Demand for Bykes is
increasing

6
.Mr.CharakRay.
Keeps on changing due to
 Technological improvement
Consumer preferences (use of facebook)
 Entry of new competition in the market.

7
.Mr.CharakRay.
Difficult to predict future happenings,
particularly when
environment changes
are taking place too frequently

8
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Environment is easier to understand in parts but
difficult to understand as a whole
Example
Easier to understand the fall in demand but
difficult to explains the reasons for fall.
•Change in customer taste
•Increase in competition
•Increase in price of the product.

9
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Different forces of business environment are
closely interrelated.
Health awareness has
increased the demand for
Gyms Low Calorie Food Products

10
.Mr.CharakRay.
•Specific forces (such as investors,
customers, suppliers) affect individual
enterprises directly.
•General forces (such as social, political,
legal and technological conditions) impact
indirectly.

11
.Mr.CharakRay.
Recognize Opportunities To Get The First Mover
Advantage
Assist In image building
Coping With Rapid Changes
Early Warning Signals And Threats
Resources utilization
Support In Planning And Policy Formulation

12
.Mr.CharakRay.
Early identification of opportunities helps an
enterprise to compete it with competitors

13
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Company can build positive image by
understanding people problems and resolving
them.

14
.Mr.CharakRay.
•All sizes and all types of enterprises are
facing increasingly dynamic environment.
• To manage with changes, managers examine
the environment and develop suitable plan.
Increasing traffic in
Delhi led to develop
METRO

15
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •Indian firm can compete foreign
firms by improving
• The quality of the product
•Reducing cost of the production,
•Engaging in aggressive advertising
Tata motors is competing with
domestic as well foreign competitors
in the Indian market

16
.Mr.CharakRay.
Environment brings both
opportunities and threats
for a business enterprise.
Its understanding can convert threats into
opportunities.
Bajaj auto has stop
manufacturing scooter and
concentrating on motor cycle
Threat Opportunity
Demand for scooter
is falling
Demand for Bikes is
increasing

17
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Environment provides various resources
for running a business. Like
Finance
Man-power
Firms must get these resources to grow

18
.Mr.CharakRay.
Legal Environment
Political Environment
Economic Environment
Social Environment
Technological Environment

19
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •Consists of legislation passed by the parliament
and state legislatures.
•Knowledge of rules and regulations Is Necessary
for better business performance. examples
Consumer protection Act 1986

20
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •Consist of political stability and the policies of
the government.
•Stable govt. create confidence among
business people to invest in the long term
projects`
Gujarat has established itself as best state
of India because of political support.

21
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Includes society in which the business works.
Literacy rate, customs values, beliefs, lifestyle.
Health awareness has
increased the demand for
Gyms Low Calorie Food Products

22
.Mr.CharakRay.
• Consists of economic factors that influence the
business in a country.
•Include gross national product, corporate
profits, inflation rate, employment,
Interest rates affect demand for

23
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •Includes Forces Relating To Scientific
Improvements And Innovations
•Provide New Ways And Techniques Of Producing
Goods And Services Of Doing A Business

24
.Mr.CharakRay.
Legal
Environment
Political
Environment
Economic
Environment
Social
Environment
Technological
Environment

25
.Mr.CharakRay.
India at the time of independence

26
.Mr.CharakRay.
Goal Was
•Rapid economic growth to raise the
standard of living.
•Reduce unemployment and poverty.
•Become self-reliant
•Reduce inequalities of income and
wealth.
•Adopt a socialist pattern of
development.

27
.Mr.CharakRay.
But in 1991

28
.Mr.CharakRay.
By Dr. Manmohan sigh
Financial minsiter(then)

29
.Mr.CharakRay.
Economic policy
includes
Liberalization Privatization Globalization

30
.Mr.CharakRay.
Liberate industry from the chains
of the licensing system
Reduce the role of the public
sector
Encouraging foreign private
participation in india’s industrial
development

31
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Freedom in fixing the prices of goods and
services.
Abolishing licensing requirement in most of the
industries.
Reduction in tax rates and lifting of unnecessary
controls over the economy.
Making easier to attract foreign capital and
technology to India.
Simplifying procedures for imports and experts

32
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Giving greater role to the private sector and a
reduced role to the public sector.
To improve the efficiency of PSUs by giving
them autonomy
Transferring the public sector enterprises to
the private sector by disinvestment

33
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Mixing of the economy of the country with the
world economy.
Creation of networks and activities to go beyond
economic, social and geographical boundaries.
Increased level of interaction and
interdependence among the various nations of the
global economy

34
.Mr.CharakRay.

35
.Mr.CharakRay.
Threat from MNC
Reduction of budgetary support to the public sector
Increasing competition
More demanding customers
Market orientation
Essential for change
Rapidly changing technological environment

36
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Huge entry of multi nationals in Indian marker
brings new challenge to Indian industries to
compete with them

37
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •The central government’s budgetary support
for financing the public sector has decline
•To survive and grow, PSU’s will have to
more efficient and generate their own
resources

38
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •New industrial licensing and entry of foreign
firms
•Has increase competition for Indian firms
•In service industries like telecommunications,
airlines, banking etc.

39
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) • With awareness and increased competition in
the market
•Customers have wider choice in purchasing
•Better quality of goods and services and
competitive prices
Fixed Land Line Replaced By

40
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) •Earlier firms used to produce first and go to the
market for sale later.
•Now firms have to study and analyze the market
first and produce goods according to customer
needs

41
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) After 1991, the business firms have become
confused and have to continuously modify their
operations. HUL catorgised the Indian customer
on the basis of income. Example
Affluent
Aspiring
Striving

42
.Mr.CharakRay.
BCM(BHSE),SENIOR(ST.JA) Companies are making huge investment in
research and development to grow faster
•Companies like
Set up with an investment of
Rs. 184 Cr.The new 200,000
square-foot facility R&D
centre in Hyderabad, to
respond even more quickly to
changing customer needs
across the world

BUSINESS ENVIRONMENT

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