BUSINESSENVIRONMENT BYPROF ANIL PANDEMFM2SEM1-2007BUSINESSENVIRONMENTBusinessEnvironment
mainly refers toexternal forcesthat impactbusiness. Suchforces includepolitical-legal,technological,cultural
,economic andphysical.Factors underExternalEnvironmentAll the factorsthat providesopportunities or
pose threats toan organizationmake upitsexternalenvironment.•DEMOGRAPHICENVIRONMENT•
SOCIALENVIRONMENT•CULTURALENVIRONMENT•POLITICALENVIRONMENT•ECONOMICENVIRONMENT•
FINANCIALENVIRONMENT•TRADEENVIRONMENT•TECHNOLOGICALENVIRONMENT•LEGALENVIRONMENT
•REGULATORYENVIRONMENT•TAXENVIRONMENT•ETHICALENVIRONMENTExternalenvironment
consists of 1.MicroEnvironment 2.MacroEnvironment1.MicroEnvironment•
Microenvironment iscalled as thetaskenvironment andoperatingenvironment.•
Microenvironmentforces have adirect bearing ofthe operation ofthe firm.•These factorsare present in
companiesenvironment andaffect on theperformance ofthe companies.•Includes –suppliers,marketing
intermediaries.competitors,customers andpublic.Microenvironment aremore intimatelylinked to
company thanmacro.Suppliers :oThose whosupplyinputs,raw
material andcomponentsoUncertainty insupply compelshigh inventorycost.o
India maintainsstocks of 3 to 4months were asJapanmaintainsfor few hours.oEg : Nirma –believes of thelogic that
captiveproductionplantfor rawmaterial is bestfor cost control.(backwardintegration)o
Co feeloutsourcing ismore beneficialoRisk to dependon singlesuppliero
Globallycompanies areresorting toparteneringrelationshipmarketing.1    Customers:o
Business existsbecause ofcustomersoMonitoringcustomerssensitivity isperquisiteo
The choice ofcustomer by thefirm can beona.Relativeprofitabilityb.Dependabilityc.Stability of
demandd.Growth prospectsoToday customeris globalcustomer asexposed toglobal products.
Competitions:oCompetitionincludes notonly withcompetitors ofsame productbut all thosewho compete
for discretionaryincome ofconsumers.oEg : thecompetiton forT V firm maynot be only fromother T V
manufacturingbut also from2wheelers,refrigerators,cookingranges,stereosets etc,bankschemes.o
To influencebasic desire ofcustomeroGenericcompetition: Ifthe customerdecides tospenddiscretiona
ry income onrecreation , hecomeacrossalternatives like, TV,stereo ,2 in 1,3in 1 P C etc.o
It is competitionamongalternative.MarketingIntemediary:oFirms that aidthe company in
promoting,sellinganddistributingits grads to finalbuyers.oIncludesmiddlemen,agents,merchants,dist
ributionfirms,warehouses,transportationfirms,marketing,financialintermediaries,insurances etc.Financiers
oFinanciers of thecompanyoTheir financialcapability,policies,strategies.attitudes,ability to
provide nonfinancialassistance.PublicoPublic is anygroup that hasactual or
potential interestI or impact onorganizationsability toachieves itsinterest.oMediapublics,citizens
actionpublics,localpublicsetc,consumers publicsoIssues againstcompanieso
Tarnishing theimage by mediaoEnvironmentalpollutionoChillslabour,sweat
labour,crueltyagainst animals.
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Business environment by prof anil pande mfm2 sem1

  1. 1. BUSINESSENVIRONMENT BYPROF ANIL PANDEMFM2SEM1-2007BUSINESSENVIRONMENTBusinessEnvironment
  2. 2. mainly refers toexternal forcesthat impactbusiness. Suchforces includepolitical-legal,technological,cultural
  3. 3. ,economic andphysical.Factors underExternalEnvironmentAll the factorsthat providesopportunities or
  4. 4. pose threats toan organizationmake upitsexternalenvironment.•DEMOGRAPHICENVIRONMENT•
  5. 5. SOCIALENVIRONMENT•CULTURALENVIRONMENT•POLITICALENVIRONMENT•ECONOMICENVIRONMENT•
  6. 6. FINANCIALENVIRONMENT•TRADEENVIRONMENT•TECHNOLOGICALENVIRONMENT•LEGALENVIRONMENT
  7. 7. •REGULATORYENVIRONMENT•TAXENVIRONMENT•ETHICALENVIRONMENTExternalenvironment
  8. 8. consists of 1.MicroEnvironment 2.MacroEnvironment1.MicroEnvironment•
  9. 9. Microenvironment iscalled as thetaskenvironment andoperatingenvironment.•
  10. 10. Microenvironmentforces have adirect bearing ofthe operation ofthe firm.•These factorsare present in
  11. 11. companiesenvironment andaffect on theperformance ofthe companies.•Includes –suppliers,marketing
  12. 12. intermediaries.competitors,customers andpublic.Microenvironment aremore intimatelylinked to
  13. 13. company thanmacro.Suppliers :oThose whosupplyinputs,raw
  14. 14. material andcomponentsoUncertainty insupply compelshigh inventorycost.o
  15. 15. India maintainsstocks of 3 to 4months were asJapanmaintainsfor few hours.oEg : Nirma –believes of thelogic that
  16. 16. captiveproductionplantfor rawmaterial is bestfor cost control.(backwardintegration)o
  17. 17. Co feeloutsourcing ismore beneficialoRisk to dependon singlesuppliero
  18. 18. Globallycompanies areresorting toparteneringrelationshipmarketing.1 Customers:o
  19. 19. Business existsbecause ofcustomersoMonitoringcustomerssensitivity isperquisiteo
  20. 20. The choice ofcustomer by thefirm can beona.Relativeprofitabilityb.Dependabilityc.Stability of
  21. 21. demandd.Growth prospectsoToday customeris globalcustomer asexposed toglobal products.
  22. 22. Competitions:oCompetitionincludes notonly withcompetitors ofsame productbut all thosewho compete
  23. 23. for discretionaryincome ofconsumers.oEg : thecompetiton forT V firm maynot be only fromother T V
  24. 24. manufacturingbut also from2wheelers,refrigerators,cookingranges,stereosets etc,bankschemes.o
  25. 25. To influencebasic desire ofcustomeroGenericcompetition: Ifthe customerdecides tospenddiscretiona
  26. 26. ry income onrecreation , hecomeacrossalternatives like, TV,stereo ,2 in 1,3in 1 P C etc.o
  27. 27. It is competitionamongalternative.MarketingIntemediary:oFirms that aidthe company in
  28. 28. promoting,sellinganddistributingits grads to finalbuyers.oIncludesmiddlemen,agents,merchants,dist
  29. 29. ributionfirms,warehouses,transportationfirms,marketing,financialintermediaries,insurances etc.Financiers
  30. 30. oFinanciers of thecompanyoTheir financialcapability,policies,strategies.attitudes,ability to
  31. 31. provide nonfinancialassistance.PublicoPublic is anygroup that hasactual or
  32. 32. potential interestI or impact onorganizationsability toachieves itsinterest.oMediapublics,citizens
  33. 33. actionpublics,localpublicsetc,consumers publicsoIssues againstcompanieso
  34. 34. Tarnishing theimage by mediaoEnvironmentalpollutionoChillslabour,sweat
  35. 35. labour,crueltyagainst animals.

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