for understanding a business environment we need to understand internal environment of business and external environment of business.
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3. ENVIRONMENT
The environment of any organization is “the aggregate of
all conditions, events and influences that surroundings
and affect it.”
Nature of Business Environment:
Uncertain
Dynamic
Interrelated
Relative
6. INTERNAL ENVIRONMENT
(I.E)
Internal environment refers to all the factors existing within
a business firms.
Controllable
Examples : Personnel, finance, marketing, production,
operational research etc.
8. External Environment (E.E)
The External Environment consists of forces and factors
outside an enterprise.
Uncontrollable
Examples : National income, social forces, government
policies, population etc.
It consists of : 1. Micro Environment
2. Macro Environment
9. Micro-environment
Micro environment is also known as task environment
or operating environment.
Different operations of the firm:
Suppliers
Financers
Customer
Marketing Intermediaries
Public
Competitors
10. Macro-environment
Macro environment of business means all external
factors which affects company and its business and
there is no control of company on these factors.
11. Economic Environment
We can introduce economic environment as all the
factors which affect business due to change in :
Economic system
Economic conditions
Economic policies
12. Social/Cultural Environment
The social environment of business
includes social factors like customs,
traditions, values, beliefs, poverty,
literacy, life expectancy rate etc.
13. Demographic Environment
This refers to the size, density,
distribution and growth rate of
population
All these factors have a direct
bearing on the demand for various
goods and services.
15. Technological Environment
Technological environment include
the methods, techniques and
approaches adopted for production of
goods and services and its
distribution.
The varying technological
environments of different countries
affect the designing of products.
16. Natural Environment
Business is greatly influenced by the nature of
natural environment.
These factors include the availability of natural
resources, weather and climatic condition,
location aspect, topographical factors, etc.
17. Current Business environment of
India
Foreign Direct Investment in India decreased to
1616 USD Million in August of 2013 from 1696
USD Million in July of 2013
In September, India's headline inflation rate
based on monthly WPI rose to 6.5 percent from
6.1 percent in August, hitting its highest level
since February of 2013.
18. The Reserve Bank of India decided on September
20th to raise the repo rate by 25 bps to 7.5
percent, in an attempt to refrain inflationary
pressures
India's foreign exchange (forex) reserves
increased by US$ 1.51 billion to touch US$ 279.24
billion for the week ended October 11, 2013,
showed the data from the Reserve Bank of India
(RBI)’s Weekly Statistical Supplement
Editor's Notes
For example, during festive seasons there is an increase in the demand for new clothes, sweets, fruits, flower, etc.
For example a country where population rate is high and children constitute a large section of population, then there is more demand for baby products.
For controlling stock exchanges,Govt. has made SEBI. For controlling banking business, Govt. has made RBI.
in USA and many other countries electrical appliances are designed for 110 volts. But when these are made for India, they have to be of 220 volts.
For instance , sugar factories are set up only at those places where sugarcane can be grown.