This document discusses the internal and external business environments that organizations must interact with. The internal environment includes factors under an organization's control like personnel, facilities, and brand image. The external environment includes factors outside an organization's control like economic, government/legal, social, and technological conditions. Both internal and external environments present opportunities and threats and must be understood to develop business strategies. The micro external environment specifically includes customers, competitors, public groups, and marketing intermediaries that directly influence the organization.

1. BUSINESS ENVIRONMENTBUSINESS ENVIRONMENT

2. What is a Business?What is a Business?
• Any business organisation has to
interact with its environment
• Examples???
• What are the environments?
• Internal and External

3. Every organisation has certainEvery organisation has certain
objectivesobjectives
How this objective was developed?
How the objective can be achieved?
 Strategies have to be developed
For developing strategies an
understanding of the internal and
external environments is necessary

4. Internal EnvironmentInternal Environment
• Factors like Personnel, Physical
facilities, Marketing mix,etc.
• They are the strength and weakness
of the firm
• The firm has proper control over
these factors
• These factors can be manipulated by
the firm to suit the external
environment

5. External EnvironmentExternal Environment
Factors that do exist outside the firm
Economic factors
Govt. and legal factors
Demographic factors
Socio cultural factors
The firm do not have any control over these
factors
These are the opportunities and threats of
the organisation

6. Internal EnvironmentInternal Environment
Human Resources
• The skill, quality, commitment of
personnel
• Readiness for change
• Loyalty towards the management

7. Management Structure and NatureManagement Structure and Nature
• Organisational Structure
• Composition of Board of Directors
• Efficiency to implement decisions
• Speed of implementation of
decisions

8. Value SystemValue System
Value system pursued by the
founder and top management
Perception of shareholders,
associate companies and public

9. Brand ImageBrand Image
Every company has got a brand
image
Brand image influences the
purchase of the company’s product
Compare car from Maruthi and
other makers

10. External EnvironmentExternal Environment
Micro Macro
External External
Environment Environment

11. Micro EnvironmentMicro Environment
Customers
To create and sustain
customers
A firm should have a wide
range of customers- Depending
on single customer is risky
Bargaining power of company

12. …….... CustomersCustomers
Customer segment
Target customers
Marketing mix
Eg: Maruthi , Wipro

13. CompetitionCompetition
Does not mean from same product
Substitutes can also pose threats
Eg: TV – Stereo sets, Two wheeler,
Refrigerator
Brand Competition: Samsung, LG,
Videocon
Passanger Car: ZEN, SANTRO,
INDICA- XETA, I10, etc.

14. PublicPublic
Any group that has an impact on an
organisation
Eg: Media Public-
Bhopal Gas Tragedy(Union Carbide)
Coca Cola

15. ……..Public..Public
Citizen Action Public-
Environmental Problem
Law Acquisition
Eg: Narmada Dam
Nuclear Power Plants
Titanium Factory, Trivandrum

16. Marketing IntermediariesMarketing Intermediaries
Firms that aid the company in promoting,
selling and distributing its products to final
buyers
Their attitude and policy affect the company
dearly
Among the products of various company,
they might show interest in selling the
product of a particular company

17. …….. Marketing Intermediaries.. Marketing Intermediaries
Recently, many retailers boycott the
products of HLL due to low margin
Many retailers are not interested in
selling the products of public sector
companies

18. Macro EnvironmentMacro Environment
They are the remote environment
Macro Environment variables are
Global factors
Social/Cultural factors
Demographic factors
Political factors

19. …….... Macro EnvironmentMacro Environment
Natural factors and
Technological factors