SlideShare a Scribd company logo
Environmental Dynamics & Change 
Entrepreneurs need to evaluate the environment not only prior 
to the start-up of their business but also during the growth 
stage of ventures. An environment is the situation where 
business ventures operate. Ventures environments can be 
divided into two parts, which are: 
 Macro view of the External environment 
 Micro view of the External and Internal environment
The Components of Venture Environment 
External Environment 
Macro 
Environment 
Internal Environment 
Micro 
Environment 
Political 
and 
Legislation 
Socio 
Cultural 
Economy Technology 
Customers Competitors 
Suppliers 
Financial 
Institutions 
Non Govt 
Organizations 
Govt 
Agency 
Organization Structure Culture Resources
External Environment(Macro) 
Political & Legislation 
This is the environment where entrepreneurs exercise their political power. 
To a large extent, usually entrepreneurs have to take the given political 
and legislative elements of the new ventures. They have to obey and adhere 
to the policy, legislation and regulations where the business operates.
Economy 
The economic environment plays a vital role in the success or 
failure of any new venture. A macroeconomic environment encompasses the 
total of all goods and services produced, distributed, sold and consumed. 
Entrepreneurs need to analyze this environment at the global, national and 
local levels where their business operates. 
Each business is related to one another at these three levels of the 
macro economics environment. However, one should know which level has 
a greater impact on entrepreneurs. Entrepreneurs should scan, monitor, 
forecast and assess the macroeconomic conditions that affect the new 
venture. They should be able to see the changes that happen in the 
economy and be able to determine the variables that are relevant for 
analysis.
Socio Cultural 
Demographic changes - They occur due to changes in the population, 
ethnic groups, and population structure according to age, gender, 
geographical location, and population distribution of income. These 
elements are the contributing factors to consumers’ demand, purchasing 
power and industrial capacity. Entrepreneurs should also closely examine 
these elements which contribute to the creation of markets. However, the 
demographic trend and changes are beyond an entrepreneurs’ control. 
Entrepreneurs need to assess demographic changes in order to identify 
business opportunities. 
Social Changes - They relate to the modes and manner in which people live 
their lives. Lifestyle reflects the peoples’ tastes and preferences. 
Entrepreneurs need to scan and monitor lifestyle changes in order to 
identify business opportunities.
Technology 
The branch of knowledge that deals with industrial arts, applied science, 
engineering, process, invention or method can be defined as technology. 
Technological analysis requires scanning and monitoring from the time of 
basic research through product development and commercialization. 
Technological change takes two forms: 
Pure Invention - Pure invention refers to the creation of something new 
that is different from existing technology or products. 
Process Innovation - Process innovation refers to the small changes in 
design, product formulation and manufacturing, materials and 
distribution. This will be discussed in further detail in the section on 
opportunity identification.
Micro Environment 
Customers 
Customers are the main target group in business. They consume 
goods and services produced by the industry. Customers can be among 
individuals in the society, such as housewives, workers, students or groups 
of people. The consumer is king in the market system. 
Competitors 
Entrepreneurs in new venture businesses must really analyze their 
competitors in the industry. The competitors are the businesses that fulfill 
the same customer needs or have the potential to serve those customers. 
They can be identified by asking the customers (of existing business) or 
potential customers (of new business) where they can buy the product or 
services. Entrepreneurs can identify them through business directories.
Suppliers 
Suppliers are the second group of people that have great 
influence on entrepreneurial activities. They can increase the prices they 
charge for the products and services they sell. They can also decrease 
the quality of those products and services that are in the market. 
Financial institutions 
Financial institutions are one of the sources for external funding 
to initiate a new business venture or for expanding an existing business. 
Loans from financial institutions are not only hard to get for new 
venture entrepreneurs because of their lack of track record, but also 
because of the cost in terms of interest payment, which burdens the new 
business. Thus, financial institutions have a direct influence on 
entrepreneurs.
Government Agencies 
Government influences the entrepreneurial activities through 
policy implementation. Some examples include the New Economic Policy, 
Privatization Policy and the Malaysian Agriculture Policy which have been 
implemented in our country. Some policies have direct impact on 
entrepreneurial activities. 
Non-government organizations 
Non-government organizations such as consumer societies, 
political organizations, religious groups, business society, environmental 
groups and others are among interest groups that can influence 
entrepreneurs. These groups can influence entrepreneurs through 
campaigns against products or services and by disseminating the 
information regarding certain products. Later these actions can influence 
customers and pressure the government to take action on certain issues.
Internal Environment 
An organization’s internal environment consists of: 
 Resources 
 Structure 
 Culture 
These elements influence the entrepreneur’s decisions and 
activities. Entrepreneurs need to assess the strengths and 
weaknesses in their business before making any decision or 
formulating any strategies.
Resources - Among the internal resources in an organization are the 
entrepreneur himself, financial, human resources, tangible and 
intangible assets, technology and reputation. Entrepreneurial personality 
characteristics, skills, energy, ideas, knowledge and experiences are part 
of entrepreneur resources. All these resources are processed together in 
the business venture to produce goods and services. 
Structure - Organizational structure must be suitable for a new venture 
to adapt to changes in the environment. 
Culture - Positive culture and values should be inculcated into the 
business organization for the benefit of all human resources.
DECISIONS FOR ENTREPRENEURIAL START-UP

More Related Content

What's hot

BUSINESS ENVIROMENT GRADE 12
BUSINESS ENVIROMENT GRADE 12BUSINESS ENVIROMENT GRADE 12
BUSINESS ENVIROMENT GRADE 12
Mpho Befole
 
Nature of business environment (2)
Nature of business environment (2)Nature of business environment (2)
Nature of business environment (2)
Priyanka Mehta
 
Assignment 2 external environment
Assignment 2 external environmentAssignment 2 external environment
Assignment 2 external environment
Moses Mbanje
 

What's hot (20)

External & Internal Business Environment
External & Internal Business EnvironmentExternal & Internal Business Environment
External & Internal Business Environment
 
Interpreting environmental factors
Interpreting environmental factorsInterpreting environmental factors
Interpreting environmental factors
 
BUSINESS ENVIROMENT GRADE 12
BUSINESS ENVIROMENT GRADE 12BUSINESS ENVIROMENT GRADE 12
BUSINESS ENVIROMENT GRADE 12
 
Nature of business environment (2)
Nature of business environment (2)Nature of business environment (2)
Nature of business environment (2)
 
Business Environment and Analysis
Business Environment and AnalysisBusiness Environment and Analysis
Business Environment and Analysis
 
Pestle analysis
Pestle analysisPestle analysis
Pestle analysis
 
The Environment and Corporate culture
The Environment and Corporate cultureThe Environment and Corporate culture
The Environment and Corporate culture
 
Business environment
Business environmentBusiness environment
Business environment
 
Assignment 2 external environment
Assignment 2 external environmentAssignment 2 external environment
Assignment 2 external environment
 
Marketing Strategy
Marketing StrategyMarketing Strategy
Marketing Strategy
 
The concept of demand and supply and information asymmetric
The concept of demand and supply and information asymmetricThe concept of demand and supply and information asymmetric
The concept of demand and supply and information asymmetric
 
Environmental variables and key success variables
Environmental variables and key success variablesEnvironmental variables and key success variables
Environmental variables and key success variables
 
Internal influences in the business environment
Internal influences in the business environmentInternal influences in the business environment
Internal influences in the business environment
 
Stable environment/Dynamic environment
Stable environment/Dynamic environmentStable environment/Dynamic environment
Stable environment/Dynamic environment
 
Business Environment- Economics Perspective
Business Environment- Economics PerspectiveBusiness Environment- Economics Perspective
Business Environment- Economics Perspective
 
Factors affecting business environment
Factors affecting business environmentFactors affecting business environment
Factors affecting business environment
 
The environmental context of management
The environmental context of managementThe environmental context of management
The environmental context of management
 
Market segmentation
Market segmentationMarket segmentation
Market segmentation
 
Mg 101 organizational environment ppt-1st sem 2014-15
Mg 101 organizational environment ppt-1st sem 2014-15Mg 101 organizational environment ppt-1st sem 2014-15
Mg 101 organizational environment ppt-1st sem 2014-15
 
Introduction to business environment slides
Introduction to business environment slidesIntroduction to business environment slides
Introduction to business environment slides
 

Viewers also liked

Marketing- Macroenvironment
Marketing- MacroenvironmentMarketing- Macroenvironment
Marketing- Macroenvironment
Kabsideous
 

Viewers also liked (20)

Funding Schemes in Biotechnology Sector, India
Funding Schemes in Biotechnology Sector, IndiaFunding Schemes in Biotechnology Sector, India
Funding Schemes in Biotechnology Sector, India
 
Manufacturing and Materials Seminar about £15million Innovate UK funding comp...
Manufacturing and Materials Seminar about £15million Innovate UK funding comp...Manufacturing and Materials Seminar about £15million Innovate UK funding comp...
Manufacturing and Materials Seminar about £15million Innovate UK funding comp...
 
CD June 2016 - Highways England's Innovation Strategy
CD June 2016 -  Highways England's Innovation StrategyCD June 2016 -  Highways England's Innovation Strategy
CD June 2016 - Highways England's Innovation Strategy
 
HORIZON 2020
HORIZON 2020HORIZON 2020
HORIZON 2020
 
Horizon 2020 - the €80 billion R&D Fund
Horizon 2020 - the €80 billion R&D FundHorizon 2020 - the €80 billion R&D Fund
Horizon 2020 - the €80 billion R&D Fund
 
Entrepreneurship and Small Business: Unit No. 4
Entrepreneurship and Small Business: Unit No. 4Entrepreneurship and Small Business: Unit No. 4
Entrepreneurship and Small Business: Unit No. 4
 
FT Partners Research: Innovations in Capital Markets Technology - Focusing on...
FT Partners Research: Innovations in Capital Markets Technology - Focusing on...FT Partners Research: Innovations in Capital Markets Technology - Focusing on...
FT Partners Research: Innovations in Capital Markets Technology - Focusing on...
 
The Entrepreneurial Approach
The Entrepreneurial ApproachThe Entrepreneurial Approach
The Entrepreneurial Approach
 
Entrepreneurship Development: Unit No. 1
Entrepreneurship Development: Unit No. 1Entrepreneurship Development: Unit No. 1
Entrepreneurship Development: Unit No. 1
 
Esbd unit ii 1
Esbd unit ii 1Esbd unit ii 1
Esbd unit ii 1
 
Entrepreneurship and Small Business: Unit No. 1
Entrepreneurship and Small Business: Unit No. 1Entrepreneurship and Small Business: Unit No. 1
Entrepreneurship and Small Business: Unit No. 1
 
Agile innovation and Thinking Like a Startup
Agile innovation and Thinking Like a StartupAgile innovation and Thinking Like a Startup
Agile innovation and Thinking Like a Startup
 
Ibe unit i
Ibe unit iIbe unit i
Ibe unit i
 
Entrepreneurship
EntrepreneurshipEntrepreneurship
Entrepreneurship
 
Marketing- Macroenvironment
Marketing- MacroenvironmentMarketing- Macroenvironment
Marketing- Macroenvironment
 
Marketing Environment
Marketing EnvironmentMarketing Environment
Marketing Environment
 
Sheikh Zayed Medical College (SZMC) Rahim Yar Khan Merit List 2014
Sheikh Zayed Medical College (SZMC) Rahim Yar Khan Merit List 2014Sheikh Zayed Medical College (SZMC) Rahim Yar Khan Merit List 2014
Sheikh Zayed Medical College (SZMC) Rahim Yar Khan Merit List 2014
 
Andanças e Colagens - CPC USP
Andanças e Colagens - CPC USPAndanças e Colagens - CPC USP
Andanças e Colagens - CPC USP
 
Next a new face heaven memorial park
Next a new face heaven memorial parkNext a new face heaven memorial park
Next a new face heaven memorial park
 
presentasi kom.Daring
presentasi kom.Daringpresentasi kom.Daring
presentasi kom.Daring
 

Similar to DECISIONS FOR ENTREPRENEURIAL START-UP

Similar to DECISIONS FOR ENTREPRENEURIAL START-UP (20)

Marketing env(3).pptx
Marketing env(3).pptxMarketing env(3).pptx
Marketing env(3).pptx
 
Smans
SmansSmans
Smans
 
BE UNIT 1 IST PRESENTATION 2 (4).pdf most important
BE UNIT 1 IST PRESENTATION 2 (4).pdf most importantBE UNIT 1 IST PRESENTATION 2 (4).pdf most important
BE UNIT 1 IST PRESENTATION 2 (4).pdf most important
 
week-3.pptx
week-3.pptxweek-3.pptx
week-3.pptx
 
BUSINESS ENVIRONMENT UNIT-1
BUSINESS ENVIRONMENT UNIT-1BUSINESS ENVIRONMENT UNIT-1
BUSINESS ENVIRONMENT UNIT-1
 
Unit 5 marketing environment - Class 11 - CBSE - 2016/17
Unit 5   marketing environment - Class 11 - CBSE - 2016/17Unit 5   marketing environment - Class 11 - CBSE - 2016/17
Unit 5 marketing environment - Class 11 - CBSE - 2016/17
 
Business environment
Business environment Business environment
Business environment
 
Strategic management mod 2/unit 2
Strategic management mod 2/unit 2Strategic management mod 2/unit 2
Strategic management mod 2/unit 2
 
marketing orientation environment-160905161616.pptx
marketing orientation environment-160905161616.pptxmarketing orientation environment-160905161616.pptx
marketing orientation environment-160905161616.pptx
 
Business environment
Business environmentBusiness environment
Business environment
 
Business Environment Indian Perspective
Business Environment Indian PerspectiveBusiness Environment Indian Perspective
Business Environment Indian Perspective
 
Chapter 2 Business and its Environment
Chapter 2 Business and its EnvironmentChapter 2 Business and its Environment
Chapter 2 Business and its Environment
 
32 business i environment i society mba 2016
32 business i environment i society mba 201632 business i environment i society mba 2016
32 business i environment i society mba 2016
 
Marketing Environment
Marketing EnvironmentMarketing Environment
Marketing Environment
 
27 business i environment i society mba 2016
27 business i environment i society mba 201627 business i environment i society mba 2016
27 business i environment i society mba 2016
 
environment of industrial marketing
environment of industrial marketingenvironment of industrial marketing
environment of industrial marketing
 
business environment pdf
business environment pdfbusiness environment pdf
business environment pdf
 
Be unit 1
Be unit 1Be unit 1
Be unit 1
 
COMPONENTS OF BUSINESS ENVIRONMENT-I.pptx
COMPONENTS OF BUSINESS ENVIRONMENT-I.pptxCOMPONENTS OF BUSINESS ENVIRONMENT-I.pptx
COMPONENTS OF BUSINESS ENVIRONMENT-I.pptx
 
105 Marketing Enviornent Unit no 2.ppt
105 Marketing Enviornent Unit no 2.ppt105 Marketing Enviornent Unit no 2.ppt
105 Marketing Enviornent Unit no 2.ppt
 

Recently uploaded

Article about KI Content Creator Pro.pdf
Article about KI Content Creator Pro.pdfArticle about KI Content Creator Pro.pdf
Article about KI Content Creator Pro.pdf
FatimaMary4
 

Recently uploaded (6)

Strategic Analysis of Starbucks Coffee Company - MBA.docx
Strategic Analysis of Starbucks Coffee Company - MBA.docxStrategic Analysis of Starbucks Coffee Company - MBA.docx
Strategic Analysis of Starbucks Coffee Company - MBA.docx
 
Article about KI Content Creator Pro.pdf
Article about KI Content Creator Pro.pdfArticle about KI Content Creator Pro.pdf
Article about KI Content Creator Pro.pdf
 
Office Furniture | Furniture Store in Sarasota, Florida | Sarasota Collection
Office Furniture | Furniture Store in Sarasota, Florida | Sarasota CollectionOffice Furniture | Furniture Store in Sarasota, Florida | Sarasota Collection
Office Furniture | Furniture Store in Sarasota, Florida | Sarasota Collection
 
Codes and Conventions for music videos .
Codes and Conventions for music videos .Codes and Conventions for music videos .
Codes and Conventions for music videos .
 
Web Technology LAB MANUAL for Undergraduate Programs
Web Technology  LAB MANUAL for Undergraduate ProgramsWeb Technology  LAB MANUAL for Undergraduate Programs
Web Technology LAB MANUAL for Undergraduate Programs
 
Dining Tables and Chairs | Furniture Store in Sarasota, Florida
Dining Tables and Chairs | Furniture Store in Sarasota, FloridaDining Tables and Chairs | Furniture Store in Sarasota, Florida
Dining Tables and Chairs | Furniture Store in Sarasota, Florida
 

DECISIONS FOR ENTREPRENEURIAL START-UP

  • 1.
  • 2. Environmental Dynamics & Change Entrepreneurs need to evaluate the environment not only prior to the start-up of their business but also during the growth stage of ventures. An environment is the situation where business ventures operate. Ventures environments can be divided into two parts, which are:  Macro view of the External environment  Micro view of the External and Internal environment
  • 3. The Components of Venture Environment External Environment Macro Environment Internal Environment Micro Environment Political and Legislation Socio Cultural Economy Technology Customers Competitors Suppliers Financial Institutions Non Govt Organizations Govt Agency Organization Structure Culture Resources
  • 4. External Environment(Macro) Political & Legislation This is the environment where entrepreneurs exercise their political power. To a large extent, usually entrepreneurs have to take the given political and legislative elements of the new ventures. They have to obey and adhere to the policy, legislation and regulations where the business operates.
  • 5. Economy The economic environment plays a vital role in the success or failure of any new venture. A macroeconomic environment encompasses the total of all goods and services produced, distributed, sold and consumed. Entrepreneurs need to analyze this environment at the global, national and local levels where their business operates. Each business is related to one another at these three levels of the macro economics environment. However, one should know which level has a greater impact on entrepreneurs. Entrepreneurs should scan, monitor, forecast and assess the macroeconomic conditions that affect the new venture. They should be able to see the changes that happen in the economy and be able to determine the variables that are relevant for analysis.
  • 6. Socio Cultural Demographic changes - They occur due to changes in the population, ethnic groups, and population structure according to age, gender, geographical location, and population distribution of income. These elements are the contributing factors to consumers’ demand, purchasing power and industrial capacity. Entrepreneurs should also closely examine these elements which contribute to the creation of markets. However, the demographic trend and changes are beyond an entrepreneurs’ control. Entrepreneurs need to assess demographic changes in order to identify business opportunities. Social Changes - They relate to the modes and manner in which people live their lives. Lifestyle reflects the peoples’ tastes and preferences. Entrepreneurs need to scan and monitor lifestyle changes in order to identify business opportunities.
  • 7. Technology The branch of knowledge that deals with industrial arts, applied science, engineering, process, invention or method can be defined as technology. Technological analysis requires scanning and monitoring from the time of basic research through product development and commercialization. Technological change takes two forms: Pure Invention - Pure invention refers to the creation of something new that is different from existing technology or products. Process Innovation - Process innovation refers to the small changes in design, product formulation and manufacturing, materials and distribution. This will be discussed in further detail in the section on opportunity identification.
  • 8. Micro Environment Customers Customers are the main target group in business. They consume goods and services produced by the industry. Customers can be among individuals in the society, such as housewives, workers, students or groups of people. The consumer is king in the market system. Competitors Entrepreneurs in new venture businesses must really analyze their competitors in the industry. The competitors are the businesses that fulfill the same customer needs or have the potential to serve those customers. They can be identified by asking the customers (of existing business) or potential customers (of new business) where they can buy the product or services. Entrepreneurs can identify them through business directories.
  • 9. Suppliers Suppliers are the second group of people that have great influence on entrepreneurial activities. They can increase the prices they charge for the products and services they sell. They can also decrease the quality of those products and services that are in the market. Financial institutions Financial institutions are one of the sources for external funding to initiate a new business venture or for expanding an existing business. Loans from financial institutions are not only hard to get for new venture entrepreneurs because of their lack of track record, but also because of the cost in terms of interest payment, which burdens the new business. Thus, financial institutions have a direct influence on entrepreneurs.
  • 10. Government Agencies Government influences the entrepreneurial activities through policy implementation. Some examples include the New Economic Policy, Privatization Policy and the Malaysian Agriculture Policy which have been implemented in our country. Some policies have direct impact on entrepreneurial activities. Non-government organizations Non-government organizations such as consumer societies, political organizations, religious groups, business society, environmental groups and others are among interest groups that can influence entrepreneurs. These groups can influence entrepreneurs through campaigns against products or services and by disseminating the information regarding certain products. Later these actions can influence customers and pressure the government to take action on certain issues.
  • 11. Internal Environment An organization’s internal environment consists of:  Resources  Structure  Culture These elements influence the entrepreneur’s decisions and activities. Entrepreneurs need to assess the strengths and weaknesses in their business before making any decision or formulating any strategies.
  • 12. Resources - Among the internal resources in an organization are the entrepreneur himself, financial, human resources, tangible and intangible assets, technology and reputation. Entrepreneurial personality characteristics, skills, energy, ideas, knowledge and experiences are part of entrepreneur resources. All these resources are processed together in the business venture to produce goods and services. Structure - Organizational structure must be suitable for a new venture to adapt to changes in the environment. Culture - Positive culture and values should be inculcated into the business organization for the benefit of all human resources.