This document provides an overview of business environment concepts. It defines business and outlines the scope and objectives of business, including profitability, customer satisfaction, innovation, quality products, and social responsibility. The business environment encompasses factors that affect a company's operations, both internal like value systems and objectives, and external like economic, social, cultural, innovation and technology trends. Environmental analysis is the process of identifying, assessing, auditing and profiling these environmental factors and their impact on business. Key aspects of analysis include scanning, monitoring, forecasting and assessing using models like Porter's Five Forces. Understanding the micro environment of customers, competitors and suppliers directly influences decisions, while the macro environment of economic, social and political trends shapes long-term

1. MODULE – 01
INTRODUCTION TO
BUSINESS ENVIRONMENT

2. Meaning of business:
A business is defined as an organisation or enterprising entity
engaged in commercial, industrial or professional activities.
In simple words, it also refers to an economic system in which
goods and services are exchanged for one another or money, on
the basis of their perceived worth.

3. Scope of business
1. Improvement in standard of living.
2. Proper utilization of resources.
3. Better quality and large variety of goods and services.
4. Employment opportunities.
5. Workers welfare.

4. OBJECTIVES OF BUSINESS
1. Profitability.
2. Customer satisfaction.
3. Innovation.
4. Quality products.
5. Social responsibility.

5. Business environment
Business environment is an environment in which business is
carried out.
Business environment encompasses all those factors that affect a
company’s operations; including regulations, government
activities, the economy, demographics, social and cultural factors,
innovations and technological developments.

6. Components of business environment
INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT
1. MICRO
2. MACRO
1. Value system.
2. Mission and objective of business.
3. Organisation structure.
4. Financial capability.
5. Human resource management.

7. MICRO AND MACRO ENVIRONMENT OF BUSINESS
MICRO ENVIRONMENT
1. CUSTOMERS.
2. COMPETITORS.
3. SUPPLIERS.
4. MARKET
INTERMEDIARIES.
5. PUBLIC.
MACRO ENVIRONMENT
1. SOCIAL FACTORS.
2. CULTURAL FACTORS.
3. ECONOMIC FACTORS.
4. POLITICAL FACTORS.
5. LEGAL FACTORS.
6. TECHNOLOGICAL FACTORS.
7. NATURAL FACTORS.

8. Impact of micro and macro environment in
decision making
The micro environment, including factors like customers, suppliers, and
competitors, directly influences day-to-day business decisions. Understanding
customer preferences and staying competitive are crucial.
On the other hand, the macro environment, encompassing economic, social, and
political factors, shapes the overall business environment. Economic trends,
government policies, and societal shifts can impact strategic decisions and long-
term planning. Both micro and macro factors are integral for a comprehensive
business strategy.

9. Environmental Analysis
Meaning:
It is a systematic process that starts from identification of
environmental factors, assessing their nature and impact, auditing
them to find their impact to the business and making various profiles
for positioning a common process of environmental analysis or
scanning.

10. Process of environmental analysis
1. Scanning.
2. Monitoring.
3. Forecasting.
4. Assessing.

11. COMPETITIVE STRUCTURE ANALYSIS
PORTER’S FIVE FORCE MODEL: