The document discusses the internal and external factors that make up a business environment. The external environment includes economic, socio-cultural, political-legal, demographic, technological, and ecological factors outside a business's control. The internal environment comprises organizational factors under a business's control that also impact its performance. Specifically, the business environment analyzes stakeholders, customers, suppliers, pressure groups, investors/owners, and employees that directly interface with the business. Common tools to evaluate these factors are SWOT and PEST analyses.

1. ENVIRONMENTAL
FORCES

2. Business Environment –
factors or elements
affecting a business
organization

3. External Business Environment –
factors and elements outside the
organization which may affect its
performance, either positively or
negatively

4. Internal Business Environment -
factors and elements inside the
organization which may affect its
performance, either positively or
negatively

5. GENERAL BUSINESS
ENVIRONMENT
1. Economic situations (inflation,
rates of interests, changing
options in the stock market,
people’s spending habits

6. 2. Socio-cultural situations
(customers’ changing values
and preferences)
3. Politico-legal situations
(national or local laws, rules
and regulations)

7. 4. Demographic situations
(gender, age, education level,
income, number of family
members, geographic origin)
5. Technological situations
(gadgets and technologies)

8. 6. World and ecological
situations (increasing
number of global
competitors and markets,
nature and conditions of the
changing environment)

9. SPECIFIC BUSINESS
ENVIRONMENT
1. Stakeholders – parties likely to
be affected by the activities of
the organization
2. Customers – those who
patronize the organization’s
products and services

10. 3. Suppliers – those who ensure
the organization’s continuous
flow of needed and reasonably
priced inputs or materials
required for producing their
goods and rendering their
services

11. 4. Pressure Groups – special-
interest groups that try to exert
influence on the organization’s
decisions and action
5. Investors or Owners –
provide the company with the
financial support it needs

12. 6. Employees – people who
work for another or for an
employer in exchange of
salaries/wages or other
considerations

13. SWOT
Analysis

14. PEST
Analysis