2. Business Environment consists of all the factors that have an ability to impact the way a business operates. All organizations have certain missions, goals and objectives which they seek to achieve by means of Strategy. Strategy can be viewed as actions trying to establish a proper firm - environment fit. The two sets of factors impacting business decisions are 1. The Internal Environment 2. The External Environment 12/12/11 Thapasya Vijayan

3. The internal factors are generally regarded as Controllable factors , because the company can alter or modify such factors. The important internal factors are 1. Value System : The value system of the founders and top management affects the choice of business, mission, objectives, business policies and practices. Value system is shared by all in the company. 2. Mission and Objectives : The mission statement articulates the vision of the founders and provides a general idea as to the business domain, priorities , business philosophy of the company. 3. Management Structure and Nature : consists of the organizational structure, extent of professionalization of management, shareholding pattern etc. 12/12/11 Thapasya Vijayan

4. 4. Internal Power Relationship : The amount of support the management enjoys from relationships with various stakeholders in the business. 5. Human Resources : The skill, morale, commitment, initiate, involvement, willingness, quality, attitude of the work force contribute to the overall environment of the organization and provide it with the requisite flexibility to engage in business. 6. Company Image and Brand Equity : The image of the company with its customers, stakeholders etc which helps it in raising finance, forming joint ventures, launching new products etc. 7. Miscellaneous Factors : Other internal controllable factors like Physical assets, R&D capabilities, marketing resources, financial factors etc. 12/12/11 Thapasya Vijayan

6. 1. Suppliers 2. Customers 3. Competitors 4. Marketing Intermediaries 5. Financiers 6. Publics 12/12/11 Thapasya Vijayan

7. 1. Political and Regulatory(Legal) Environment 2. Economic Environment 3. Social / Cultural Environment 4. Technological Environment 5. Natural Environment 6. Global Environment 12/12/11 Thapasya Vijayan

8. 12/12/11 Thapasya Vijayan Competitive Legal Ecological Technological Social Economic Political Business

15. It is an analysis of the strengths and weaknesses inherent in a company and an assessment of the opportunities and threats thrown up by the external environment . 12/12/11 Thapasya Vijayan

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22. Substitutes offer choice to the customer . They should be evaluated on the price-performance alternative provided by them. 12/12/11 Thapasya Vijayan

27. Mission Objectives SWOT Strategic Alternatives Choice of Strategy Implementation Evaluation & Control 12/12/11 Thapasya Vijayan

28. 12/12/11 Thapasya Vijayan Glueck defines strategy as a "unified, comprehensive and integrated plan relating the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved” Strategic Management is defined as “that set of decisions and actions which leads to the development of an effective strategy or strategies to help achieve corporate objectives” Strategy is the means to achieve the ends or objectives of the company.