2. What is environment ?
BYHENNAPUNJABI
🠶 The surroundings
animal, or plant lives or operates.
🠶The natural world, as a whole or in a
or conditions in which a person,
particular
geographical area, especially as affected by human
activity.
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3. Meaning of Business Environment
BYHENNA PUNJABI
The term ‘Marketing environment’ means
the sum total of all individuals, institutions
and other forces that are outside the
control of a business enterprise but that
may affect its performance.
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4. Examples of business environment on business :
🠶 COVID-19 → Higher data packs sold by Vodafone
→ Big Bazaar started home delivery services
🠶 Ratan Tata donated 1500 Cr. for COVID-19 (Social changes)
🠶 Landline → Cordless → Nokia → Android / Apple (Tech.)
🠶 Orkut → Facebook → Selfies → Instagram → TikTok
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🠶 Higher taxes → expensive products (GST)
🠶 Increase in petrol prices → increase in overall prices of products /
services
🠶 Cart → Rails → Local Trains → Airplanes → Metro Trains
🠶 Retail Shopping → Weekly markets → Malls → Internet (Amazon, Flipkart)
🠶 Demonetisation → Paytm, PhonePe, Debit Cards, Credit Cards
BYHENNAPUNJABI
5. Features of Business Environment
BYHENNAPUNJABI
🠶Totality of external forces
🠶Specific and general forces
🠶Inter-relatedness
🠶Dynamic nature
🠶Uncertainty
🠶Complexity
🠶Relativity (different)
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6. Importance of Business Environment
BYHENNAPUNJABI
• Itenables the firm to identify opportunities and getting
the first mover advantage
• Ithelps the firm to identify threats and early
warning signals
• Ithelps in tapping useful resources
• Ithelps in coping with rapid changes
• Ithelps in assisting in planning and policy formulation
• Ithelps in improving performance
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7. ELEMENTS / COMPONENTS/ DIMENSIONS OF
BUSINESS ENVIRONMENT
BYHENNAPUNJABI
• POLITICAL
• ECONOMIC
• SOCIAL
• TECHNOLOGICAL
• LEGAL
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8. POLITICAL ENVIRONMENT
• General stability
• Peace in country
• Government leadership
• Investment in business projects
• Industrial policy
• Red tapism and bureaucracy
• Political morality
• Relations with foreign countries
BYHENNAPUNJABI
9. ECONOMICAL ENVIRONMENT
• Interest rates
• Inflation rates
• Stock market indices
• Value of rupee
• Changes in disposable
income of people
• Per capita income
• GNP
• Foreign trade
• Rates of saving and
investment
• Agriculture and Industrial
sector
• Role of Public and private
sector
• Profit earning rate
• Productivity rate
• Employment rate
BYHENNAPUNJABI
10. ECONOMICAL ENVIRONMENT
BYHENNAPUNJABI
🠶 GDP
🠶 High inflation rate → High cost of production leading to rise in prices
of products
🠶 Fall in rate of interest → Increase in demand for home loans
🠶 GST → increase in prices of products
🠶 Demonetisation → slowdown of cash based businesses
→ Jewelers business in boom
🠶 Banking sector → schemes
🠶 Savings and investment rates
🠶 Role of private and public sector
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11. SOCIAL ENVIRONMENT
BYHENNAPUNJABI
• Customs and traditions
• Values and belief systems
• Social trends
• Culture –way of life (eating habits, clothing habits)
• Money spending habits (save or spend)
• Standard of living
• Tastes and preferences
• Festivals → Sweets, clothes, decorations
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12. SOCIAL ENVIRONMENT
BYHENNAPUNJABI
• Life expectancy
• Consumption habits / consumer preferences
• Composition of family
• Birth and death rates (shortage of medical facilities)
• Population shifts
• Educational system and literacy rates
• Expectations from workforce
• Role of women in society
• Attitude towards innovation, lifestyle, occupational
choices, etc.
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15. Legal Environment
BYHENNAPUNJABI
• Legislations passed by government
• Administrative orders issued by government authorities
• Court judgements
• Decisions rendered by various commissions and agencies
• The Companies Act, 2013
• Factories Act, 1948
• Workmen’s Compensation Act, 1923
• Competition Act, 2002
• Industries (D&R) Act, 1951
• FEMA and Import Exports Control Act, 1947
• Trade Union Act, 1926
• The Consumer Protection Act, 2019
• Industrial Dispute Act, 1947
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16. Legal Environment
BYHENNAPUNJABI
• Legislations passed by government
• Administrative orders issued by government authorities
• Court judgements
• Decisions rendered by various commissions and agencies
• Advertisement of alcoholic beverages
• Statutory warning on cigarettes
• Baby food
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