for understanding a business environment we need to understand internal environment of business and external environment of business. and for more information please visit www.wwars.com www.facebook.com/assignmentsservices

2. INRODUCTION
The term Business Environment is composed of two words
‘Business’ and ‘Environment’.
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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

4. CLASSIFICATION
INTERNAL EXTERNAL

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.

7. FACTORS AFFECTING I.E
VALUE
SYSTEM
Mission &
Objectives
Brand equity
Company image
Human
resource
Management
structure &
nature
Internal -
power
relationship

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.

14. Political & Regulatory
Environment
It comprises the elements relating to government
affairs
It serves as the regulatory framework of business

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