Current business environment

PRESENTED TO: RASHMI MAAM
Current Business Environment
Name: Roll Number
Ankit Rathi FY BBA 37
Hem Vyas FY BBA 54
Karan Shah FY BBA 38
Karan Thakkar FY BBA 49
Mehul Bharwani FY BBA 56
Parth Bhanushali FY BBA 08
Parth Gala FY BBA 16
Pranay Bhudbatti FY BBA 12
Sunny Myatra FY BBA 28
Vimal Thacker FY BBA 51
Presented By:
1
DNV INTERNATIONAL ACADEMY

Table of Contents
1.SOCIAL REVOLUTION
2.GOVERNMENT FISCAL POLICY
3.DEMAND
4.E-MARKET VS. LOCAL MARKET
5.GOVERNMENT CONTROL
6.NATURAL FACTORS
7.EFFECTS OF ADVERTISEMENT
8.TRADE CYCLE
9.INTERNATIONAL POLITICAL SYSTEM
10.TECHNOLOGICAL CHANGES.
2

SOCIAL REVOLUTION
3

What Is A Social Revolution?
 A Social Revolution is a political movement that
originates with the general population or society.
 They happen with the whole of a society or group rather
then within certain select individuals.
 They are done to overthrow a certain way in which things
are done.
4

What Are Goals Of Social Revolution?
 The goal isn’t always to completely overthrow or replace
the existing power structure.
 Often the goal is narrower and involves political reforms
and increased levels of civil rights.
 Their may be many goals within a single revolution.
5

Common Characteristics Of Social Revolutions
Are:
 They are disorganized in nature.
 Generally elites don’t partake.
 Protests may turn into riots.
6

Examples of Social Revolutions:
1. Patidar Andolan – a movement to get Patidar people
special reservations like other caste.
• Effect: This shut down many businesses in the Gujarat states
causing a huge loss for some industries.
7

2) Transport Industry Strike: Very recently a strike
occurred in the transport industry. In many states of the
country, transport companies went on strike due to high
toll tax rates. The effects of this were felt throughout the
country because a key service was not given to the
people of the country.
8

EFFECTS OF GOVERNMENT FISCAL
POLICY ON BUSINESSES
9

TAX SLAB AMENDMENTS
10

New Service Tax Rate of 14%
 Hiking Service tax to 14% is the most controversial change in the
budget 2015. As there are talks going on implementing GST (Goods
and Service Tax) from the April, 2016, increasing of service tax
hurriedly is not understandable.
 Noticeably no date of applicability was announced in budget 2015
but on 19th May vide Notification no. 14.2015, finance ministry
announced the applicability of the new service tax rate would be
1st June, 2015.
 The new service tax of 14% is flat rate and both education cess or
higher education cess get subsumed in the new service tax rate. This
means service tax @ 14% will only be applicable on the services
provided on or after 1st June 2015. Before this date Service Tax @
12% would be levied on all the services provided.
11

The new service tax applicable on the various services
w.e.f. 1st June, 2015 is as follows
 Restaurant – 5.6%
 Hotel Lodging – 8.4%
 Vehicle Rent – 5.6%
 Hall with Catering – 9.8%
 Catering – 8.4%
 Building Repairing – 9.8%
 Civil Contract with Material – 5.6%
 Building Residential – 3.5%
 Building Commercial – 4.2%
 GTA Transports – 4.2%
 All other Services – 14%
 For better understanding of the charging the service tax, do
refer “Point of Taxation Rules 2014” of Service Tax.
12

Issuing Pan Card On purchases
 Consumers buying luxury items of value above Rs.1
lakh will be required to quote PAN number. These items
could be TV, Fridge, Air Conditioner or anything having
price above Rs.1 lakh.
13

Scheme Details
Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to
ensure access to financial services, namely, Banking/ Savings & Deposit Accounts,
Remittance, Credit, Insurance, Pension in an affordable manner.
Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet.
PMJDY accounts are being opened with Zero balance. However, if the account-holder
wishes to get cheque book, he/she will have to fulfill minimum balance criteria.
14

Special Benefits under PMJDY Scheme
 Interest on deposit.
 Accidental insurance cover of Rs.1.00 lac
 No minimum balance required.
 Life insurance cover of Rs.30,000/-
 Easy Transfer of money across India
 Beneficiaries of Government Schemes will get Direct Benefit
Transfer in these accounts.
 After satisfactory operation of the account for 6 months, an
overdraft facility will be permitted
 Access to Pension, insurance products.
 Accidental Insurance Cover, RuPay Debit Card must be used at
least once in 45 days.
 Overdraft facility upto Rs.5000/- is available in only one account
per household, preferably lady of the household.
15

TECHNOLOGICAL CHANGES
16

The Impact of Technological Change on
Business Activity
 Business technology has revolutionized the way
companies conduct business. The businesses use
computers, servers, websites and personal digital products
to develop competitive advantages in the economic
marketplace. This allows owners to create operations
using the best technology available.
17

Features
 Business owners can use technology to reduce business
costs.
 Business technology helps automate back office functions,
such as record keeping, accounting etc.
 Business technology can help to improve their
communication processes. Emails, texting, websites and
personal digital products applications, can help companies
improve communication with consumers.
18

Technology's Negative Impact on Business
 Technology has positive affects on global business.
However, technology also has negative impacts on
business.
 Evolutionary theory suggests that such extinct species
failed to adapt to radically new environments when they
arose.
 Extending this analogy to the business world, many
companies fail to adapt to an evolving environment,
especially when that evolution is caused by technological
change, which can threaten their very survival in the
process.
19

 Within the last two years, competitive problems at Kodak
and Nokia,pioneers in film-based technology and digital
mobile phones, respectively, came to a head. Kodak was
forced to enter bankruptcy reorganization as a result of its
failure to adapt to the digital photography revolution,
while the rapid rise of the iPhone cost Nokia its
prominence in the market.
20

 About three decades ago, another technological pioneer,
Digital Equipment Corp. (DEC), suffered a similar fate
when microcomputers (PCs and servers) disrupted the
market for mini-computers, in which DEC was a leader.
 Some companies manage to survive, despite a radical
change in their business environment. This leads us to the
fundamental question: What differentiates the companies
that fail to change from others that successfully adapt the
change ?
21

Technology Destroying Jobs
 Companies adapting modern machines which can reduce
use of man power and can increase the productivity much
efficiently and much faser.
 The robots, automation, and software are replacing
people.
 Rapid technological change has been destroying jobs
faster than it is creating them.
22

ADVERTISEMENT
23

ADVERTISEMENT:
 DEFINITION :
 Advertisement is a form of marketing communication
used to sell something related to bussiness’s product.
 The purpose of advertisement is to assure employees /
shareholder that a company is liable / successful.
24

HISTORY OF ADVERTISEMENT
 Thomas J.Barratt is the father of modern advertisement.
 Barratt was born in london.
 He was the chairman of the soap manufacture Pears .
 Slogan : "Good morning. Have you used Pears' soap?"
was famous in its day and into the 20th century.
25

IN EARLIER ADVERTISEMENT
 In 20th century there are certain ways through which we
can provide advertisement:
1. On the radio
2. Through commercial television
3. Cable television
4. On the internet from 1990s.
27

EFFECTS OF ADVERTISEMENT
1. BRAND AWARENESS:
 Getting customers in the door often requires getting
them to know you even have doors to go through,
especially for new businesses.
 Because advertising is the only promotional strategy
that gives you complete control over your message.
28

BRAND IMAGE
 Closely connected to building awareness is creating a
brand image.
 Through advertising, you define the perception you
want targeted customers to have about your business.
29

CUSTOMER BASE
 You may get a few customers that happen upon your
business, but advertising increases your chances of
growing a strong customer base quickly.
 For an innovative company or differentiated provider in
an industry, alerting customers to your existence and
offerings can help them fulfill unmet needs
30

NATURAL EFFECT ON BUSINESS
31

 Natural calamities or disasters often end up destroying
many business factors. The destruction then in turn leads
to that factor being useless. Any revenue which could
have been earned from it gets destroyed. Thus causing a
huge loss.
32

 “Uttarakhand was expected to generate Rs 25,000 crore
from tourism in 2013-14. Although Rs 5,000-6,000 crore
have been generated from the first three months alone, the
State is expected to realise only Rs 5,000-6,000 crore in
the coming months as major tourism destinations have
been washed away by recent floods.
 Tourism sector contributes 25-30 per cent of the State’s
Gross Domestic Product.
33

 The assets of a firm such as Land or Machines or
Factories could get destroyed by any natural disasters.
This could be a big blow to any company. A small
company wouldn’t have many options for how to recover
from such a loss but large companies may be able to
reallocate resources and keep the firm at an equilibrium
34

E-BUSINESS & TRADITIONAL BUSINESS.
35

Online market and E-commerce
 Since the evolution of online market and E-commerce in
the business, there has been a great revolution in the
methods of undertaking business.
 Online market is progressing drastically as a result of
advancement in technology.
 Consequently, retail business is affected to a great extent.
The figures regarding offline retail sales show a great fall
in sales since the online markets have been introduced.
36

 According to Google India, there were 35 million online
shoppers in India in 2014 and is expected to cross 100
million mark by end of year 2016.
37

 India's e-commerce market was worth about $3.8 billion
in 2009, it went up to $12.6 billion in 2013. In 2013, the
e-retail segment was worth US$2.3 billion.
 Six Indian e-commerce companies have managed to
achieve billion-dollar valuation.
Namely, Flipkart, Snapdeal, InMobi, Quikr, OlaCabs,
and Paytm
38

Namely,
39

TRADE CYCLES
41

Trade Cycles affecting business
 Business cycles are the "ups and downs" in economic
activity, defined in terms of periods of expansion or
recession. During expansions, the economy is growing–in
real terms, after excluding the effects of inflation.
Recessions are periods when the economy is shrinking or
contracting.
42

Effects on
Business
Jobs
Sales
production
43

The business or trade
cycle relates to the
volatility of economic
growth, and the different
periods the economy goes
through (e.g. boom and
bust)
44

Causes of Trade Cycles
 Interest rates. Changes in the interest rate affect
consumer spending and economic growth For example, if
the interest rate is cut, this reduces borrowing costs and
therefore increases disposable income for consumers. This
leads to higher spending and economic growth. However,
if the Central Bank increase interest rates to reduce
inflation, this will tend to reduce consumer spending and
investment, leading to an economic downturn and
recession.
45

Prices of house
A rise in house prices
creates a wealth effect
and leads to higher
consumer spending. A
fall in house prices
causes lower consumer
spending and bank
losses. (house prices and
consumer spending) In
the late 1980s, the boom
in house prices caused
an economic boom. The
drop in house prices in
early 1990s caused the
recession of 1991-92.
46

DEMAND
47

DEMAND
 Demand Means= demand is a phrase that suggests economic
scarcity; that is, a good or service in demand is currently
desired by a relatively large number of consumers who are
both willing and able to purchase. While Industry demand
means the demand for the product of a particular industry.
For e.g. the demand for steel produced by TISCO (Tata Iron
and Steel Company) is a company demand while demand
for steel produced by all companies in India is industry
demand for steel in India..
48

EXAMPLE OF INVIDUAL FIRM DEMAND
 Initially, there were several complaints about the MSG
level which was found in processed foods. MSG is mono
sodium glutamate also known as lead and is allowed till
2.5 ppm in India. It was found that the MSG level was
especially high in Maggi.
 But there were variations in MSG content across states
because the manufacturing plants are different. In goa for
example – the MSG level is less but it is very high in
places like Delhi where the manufacturing is from a
different plant
49

 External business environment can change in a day – This is
exactly what is causing problems for Maggi. Suddenly, the whole
of India is divided in two parts. One who supports Maggi and
those who don’t. For Nestle, the sudden ban and the actions it had
to take are proof that External business environment can hurt
even the strongest companies.
 Bad news spreads fast – Literally the day after the announcement,
the bad news for maggi snowballed. The first step was the ban of
Maggi in Delhi, after which it was banned in 6 states. Now maggi
has been taken off the shelves but the whole sector is being
analysed including Yippie and the other noodle variants. At the
same time, Maggi oats and other Maggi products will be analysed
as well.
51

 Localisation should be implemented properly – Although all
companies have to change their products as per the country they
are operating in, localisation should take all factors into
consideration. MSG levels allowed in US and China are high but
they are far low in India. Nestle India should have taken care of
that fact.
 Quality control is not to be messed around with – If only the
Quality control of Maggi was strong, these packets with the high
MSG levels would never hit the market, and maggi would not
have been in this controversy. Lets face it – even i am skeptical
that Maggi will not bounce back strongly with lesser MSG
content noodles. But the quality control needs to be in place to
avoid such controversies in the first place
52

 All of this simply shows that the demand for an individual
firm, a group of similar companies or the industry as a
whole may change due to external and internal factors.
 The choices which a company makes are its internal
factors such as being honest and providing a good
product.
 External factors for demand of a product may be a
company with a similar product may have bad publicity
and cause the demand for a the company to fall.
53

GOVERNMENT CONTROL
54

Why government controls business activities?
 Businesses are usually profit motivated. Many times in
order to gain more profit the business might neglect
issues like environmental protection and production of
harmful and dangerous products.
 Business might use media to portray a wrong image of
their product or may even mislead customers to buy
products
55

•TO SAFEGUARD HEALTH AND SAFETY, GOVERNMENT
OF INDIA PROMULGATES REGULATORY REQUIREMENTS
FOR MANUFACTURE AND SALE OF GOODS AND
SERVICES, INCLUDING THOSE IMPORTED
•REGULATIONS ARE STIPULATED THROUGH VARIOUS
ACTS/ RULES & REGULATIONS BY DIFFERENT
MINISTRIES UNDER GOVERNMENT OF INDIA
•ENACTMENT OF ACTS, RULES & REGULATIONS IS DONE
TAKING COGNIZANCE OF THE RELEVANT WTO
AGREEMENTS
REGULATORY REQUIREMENTS IN INDIA
56

DNV INTERNATIONAL ACADEMY 57
ACTS/ REGULATIONS/
CONTROL ORDERS
To regulate trade
through Mandatory Certification
by BIS
PRODUCTS
Prevention of Food Adulteration
Act 1954
Infant Milk Products,
Packaged Drinking Water and
Natural Mineral Water
The Infant Milk Substitutes,
Feeding Bottles and Infant Foods
(regulation of production, supply
and distribution), Act
Plastic Feeding Bottles
Bureau of Indian Standards Act,
1986
Electrical Wires, Cables,
Appliances and Protection
Devices and Accessories
Indian Explosive Act,1884 Gas Cylinders
Bureau of Indian Standards Act,
1986
Clinical Thermometers

CERTIFICATION SCHEME FOR
FOREIGN MANUFACTURERS
 Scheme for Foreign Manufacturers
 93 licenses granted in 16 countries such as France, UAE,
South Korea, Nepal, Switzerland, Thailand Bhutan,
China, etc.
 Products certified include Packaged Drinking Water,
Cement, Wood Products, Steel Products, Milk Products,
Clinical Thermometers, Energy Meters, Electrical
Appliances & Switchgear items etc.
58DNV INTERNATIONAL ACADEMY

INTERNATIONAL POLITICAL
SYSTEM
59

INTERNATIONAL POLITICAL SYSTEM
 With the advancement of technology, international politics
and trade have been influenced to a great extent.
 Politics is the X factor which affects the business relations
worldwide.
60

 Recent visit of Prime Minister Narendra modi to USA is
the relevant example. It lead to improvisation of
relations between India and USA. Consequently trading
between both the nations has come to an ease.
61

Modi’s UAE visit
 Recently, prime minister Narendra Modi visited UAE
for two days’ tour.
 As a result of development in political relations
between the nations, UAE announced to raise Indian
investments up to Rs 5 lakh crores which boosted the
trade.
62

 Also, as a result of growing relations with other nations,
Foreign Direct Investment (FDI) is raised by 26% since last
financial year. Some facts and figures related to FDI are as
follows:
 India Foreign Direct Investment 1995-2015 | Data | Chart |
Calendar
 Foreign Direct Investment in India increased to 1943 USD
Million in July from 1749 USD Million in June of 2015.
Foreign Direct Investment in India averaged 1082.51 USD
Million from 1995 until 2015, reaching an all time high of
5670 USD Million in February of 2008 and a record low of -
60 USD Million in February of 2014. Foreign Direct
Investment in India is reported by the Reserve Bank of India.
63

Actual Previous Highest Lowest Dates Unit Frequenc
y
1943.00 1749.00 5670.00 -60.00 1995 -
2015
USD
Million
Monthly
65

 According to Department of Industrial Policy and
Promotion (DIPP), the total FDI inflows soared by 24.5
per cent to US$ 44.9 billion during FY2015, as compared
to US$ 36.0 billion in FY2014.
66

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