The macro business environment in India has several strengths such as high and sustained economic growth rates, increasing foreign direct investment, robust GDP growth, and a credible independent central bank maintaining macroeconomic stability. However, weaknesses include a high fiscal deficit and the threat of government intervention in some states. Opportunities exist in unfulfilled customer needs and new technologies while threats include a growing import bill and population explosion putting pressure on resources.

1. Macro BusinessMacro Business
Environment in IndiaEnvironment in India

2. ???????:-
 What is Business ?
 What is Environment ?
 What is Business Environment ?
 What is macro business ?
 What is strengths of macro business environment ?
 What is weakness of macro business environment ?
 What is opportunities of macro business environment ?

3. Introduction to Business:
Business is the organized efforts of enterprises to supply
consumers with goods and services. Businesses vary in size
as measured by number of employees or by sales volume.
All businesses share the same purpose to earn Profits.
However, the purpose of business goes beyond earning
profits.

4. Business is an important institution in society and the
role of business is crucial.
 Be it for the supply of goods and services
 Creation of job opportunities
 Offer of better quality of life
 Contributing to the economic growth of the country.

5. Scope of Business
 Business included all activities connected with
production, trade, banking, insurance, finance, agency,
advertising, packaging and numerous other related
activities.
 Businesses include all efforts to comply with
legal restrictions and government requirements and
discharging obligations to consumers, employees,
owners and to other interest groups which have stakes
in business directly or indirectly.
Society cannot do without business and vice versa.

6. Characteristics of Today’s Business:-
Information
Competition
Change - Transition
Opportunities
Diversification
Globalisation
Technology

7. Environment:
• Environment refers to all external forces which have a bearing on
the functioning of business.
“Environment are largely if not totally external, and beyond the
control of individual industrial enterprises and their management.
These are essentially the givers within which firms and their
managements must operate in a specific country and they vary,
from country to country”.
• However, the term business environment refers to the External
Factors. The external environment has two components
1. business opportunities
2. threats to business.

8. Business DecisionInternal Environment External Environment
Factors influencing Business Decision
Similarly, the organizational environment has two components
1.Strengths
2.Weaknesses of the organization.
A SWOT analysis is thus the first step in strategy formulation

9.  The term ‘Business Environment’ is used to describe
the general conditions for doing business that are
present in an economy.
 we will be using the word ‘business environment’ to
refer to those factors which influence business decisions
such as investment decisions, private
investment, etc. in an economy
BUSINESS ENVIRONMENT

10. Business
Decision
Internal Environment
Mission / Objectives
Management Structure
Internal Power Relationship
Physical Assets & facilities
Company image
Human resources
Financial Capabilities
Technological Capabilities
Marketing Capabilities
Financiers
Suppliers
Customers
Competitors
Public
Mktg Intermediaries
Micro Environment
Economic
Technological
Global
Demographic
Socio-Cultural
Political
Macro Environment

11. • Environment within the organization
• Internal factors of the business which can be controlled by business

12. • Refers to external aspects of the surroundings of business
enterprise which have influence on the functioning of business.
• These factors beyond the control of business.
• External environment has two types :-
i) Micro Environment ii) Macro Environment

13. Micro Environment:
The Micro environment consists of different types of
stakeholders - customers, employees, suppliers,
marketing intermediaries, competitors.
It is also known s the “Task Environment and
Operating Environment” and has a direct bearing on
the operations of the firm. hanges in the micro
environment will directly affect and impinge on the
firm‘s activities.

14. MACRO
Environment ???

15. Macro Environment:
The macro environment consists of factors which are
beyond the control of the business. There is a symbiotic
relationship between “business and the environmental”
factors, environmental factors are dynamic and a
particular business firm, by itself, may not be in a position
to change it’s environment. Macro Environment includes:

16.  Being exposed to the news allows you a higher
level of awareness of the business environment.
 Certain environments influence your business
more than others.
Macro Business environmental analysis:

17. -There are several “models” that comprise the abbreviations of
the following environments:
 Political
 Economical
 Legal (or Regulatory)
 Social
Ecological
 Technological
-:Among the titles of the same “model” are:
PEST, PESTLE, SLEPT & STEER, PESTO
We prefer PESTO

18. P
E
S
Political
Economical
Social
Technological
Others
“PESTO sauce is easy to remember and is best
when it’s fresh - the same goes for your news.”
Legal Legal Ecological
T
O

19.  You should evaluate the level of dependency
of your business to each PESTO environment.
 You should briefly describe the top two relevant
environments as per their level of influence.
 Examples:
importer of branded fashion = social & economical
developer of email marketing software = tech & legal
distributor of drip irrigation = political & ecological

20. In the past few years, India has proved to be the
nectar for major MNC’s around the world.
With favorable policies, India is now one of the
most favorable destination for FDI (Foreign
Direct Investment).

22. Economic growth
Robust GDP growth
Real GDP growth (%)
5.3
9.4
0
1
2
3
4
5
6
7
8
9
10
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
7
5.15
10.9
11
0
2
4
6
8
10
12
14
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
Industry growth (%) Services growth (%)

23. Economy – high growth rates & increasing FDI:
Increasing FDI trend
Source: RBI, DIPP Source: Reserve Bank of India
USDmillion
97
15726
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
Svgs & Cap Formation % of GDP ( Current prices)
23.1
26.3
33.8
32.4
0
5
10
15
20
25
30
35
40
Goss domestic savings Gross domestic capital formation
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11

24. Trade liberalization and reduction
in tariffs
Source: Reserve Bank of India
Despite a secular reduction in peak tariffs, the tax to GDP ratio is still showing an upward trend
Trend in Peak Custom Duty
ASEAN levels committed to be reached by 2013
(%)
14.2
13.38
14.52
16.95
15.43
12
13
14
15
16
17
18
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
Tax/ GDP ratio
(%)
150
110
85
65
50
45
40
35
30
20
12.5 10
0
20
40
60
80
100
120
140
160
FY96
FY97
Fy98
FY99
FY00
FY11
FY12
FY08
FY09
FY10
FY01
FY02
FY03
FY04
FY05
FY06
FY07
Source: Reserve Ban of IndiaSource: FICCI conference, March 14 – 15th 2012

25.  Credible independent Central Bank
 Sound professional management
High Degree of autonomy of India’s Central Bank
Macroeconomic stability - Stable currency:
Rupee exchange rate
Source: RBI
(INR/USD)
INR/ USD
17.94
31.39
35.47
42.04
47.68 45.94 45.29
0
10
20
30
40
50
60
FY96
FY97
FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12

26. Strengths:
• Strengths—internal to the unit; are a unit’s resources and capabilities that can
be used as a basis for developing a competitive advantage; strength should be
realistic and not modest.
Your list of strengths should be able to answer:
• What are the unit’s advantages?
• What does the unit do well?
• What relevant resources do you have access to?
• What do other people see as your strengths?
• What would you want to boast about to someone who knows nothing about this
organization and its work?
• Examples: good reputation among customers, resources, assets, people, :
experience, knowledge, data, capabilities

27. Weaknesses:
• Weaknesses—internal force that could serve as a barrier to maintain or achieve a
competitive advantage; a limitation, fault or defect of the unit;
• It should be truthful so that they may be overcome as quickly as possible.
Your list of weaknesses should be able to answer:
• What can be improved?
• What is done poorly?
• What should be avoided?
• What are you doing as an organization that you feel could be done more
effectively/efficiently?
• What is this organization NOT doing that you feel it should be doing?
• If you could change one thing that would help this department function more
effectively, what would you change?
• Examples: gaps in capabilities, financial, deadlines, morale
• lack of competitive

28. Opportunities:
• Opportunities—any favorable situation present now or in
the future in the external environment.
Examples: unfulfilled customer need, arrival of new technologies,
loosening of regulations, global influences, economic
boom, demographic shift
• Where are the good opportunities facing you?
• What are the interesting trends you are aware of?
• Think of: market developments; competitor;vulnerabilities; industry/
lifestyle trends;; geographical; partnerships

29. Threats:
• High fiscal deficit
• Threat of government intervention in some states
• Growing import bill
• Population explosion, rate of growth of population
• Agriculture excessively dependent on monsoon

30.
POSITIVE/ HELPFUL
to achieving the goal
NEGATIVE/ HARMFUL
to achieving the goal
INTERNAL Origin
facts/ factors of the
organization
Strengths
Things that are good
now, maintain them,
build on them and
use as leverage
Weaknesses
Things that are bad now,
remedy, change or
stop them.
EXTERNAL Origin
facts/ factors of the
environment in which
the organization
operates
Opportunities
Things that are good for
the future, prioritize
them, capture them,
build on them and
optimize
Threats
Things that are bad for
the future, put in
plans to manage
them or counter
them