The business environment of an enterprise is the sum total of all subjective and objective factors and conditions, which have an interactive relationship, and have an indirect or direct influence on the business activities of an enterprise or

1. ASSESS THE BUSINESS ENVIRONMENT OF THE ENTERPRISE
Article table of contents:
1. What is the business environment of the enterprise?
2. How to assess an enterprise's business environment
2.1. How to assess the macro-environment?
2.2. How to assess the industry environment?
3. Proactively limit business risks with CRIF D&B Vietnam's solutions
For enterprises in general and the strategic planning department in particular,
assessing the business environment of the enterprise is a very important task,
greatly influencing the decision-making in the future of the enterprise.
Assessing the business environment of an enterprise is a very important task
What is the business environment of the enterprise?
The business environment of an enterprise is the sum total of all subjective and
objective factors and conditions, which have an interactive relationship, and
have an indirect or direct influence on the business activities of an enterprise or

2. organization. . These factors and conditions affect each other, affecting the business
situation of enterprises with different levels and dimensions.
Features of the business environment:
Existence of objective necessity: Humans cannot influence.
Synthetic and systematic: Synthesize the dimensions and impact levels of all
conditions and factors.
Dynamic: Always changing due to changing factors and conditions.
Diversity: Many factors and conditions.
Complexity: Due to factors, the relationships interact with each other, affecting
the dimensions, levels, and different conditions of the business situation. At one
point, there is an element of consensus, there is an element of interference.
Business environment factors exist objectively, systematically, and always change
The basic elements of the business environment include:
Macro environment: Economic, technological, political, socio-cultural, legal, and
natural.
Industry environment: Potential competitors, existing competitors, customers,
suppliers, substitute products and services.
Combined with the assessment of the internal environment of the enterprise,
the assessment, and analysis of the business environment of the enterprise
helps to build a short, medium, and long-term strategic vision for the business

3. as well as helps to determine the goals of the enterprise. Accurate business
goals, strategic choices, and an effective and intelligent business environment.
Assess the internal environment and business environment of the
enterprise to help build an effective strategic vision
2. How to assess an enterprise's business environment
Assessing the business environment of an enterprise is a synthesis of the assessment of the
macro environment and the industry environment to take advantage of opportunities as well
as remove barriers and challenges, and adapt to the current situation.
2.1. How to assess the macro-environment?
Based on data, data, and specific information in the context and time in question, we
can evaluate the elements of the business macro-environment accurately. Business

4. owners, as well as company policymakers, often use the PEST model to assess and
analyze the macro environment of the business.
In the framework of this article, we refer to the PEST+ model consisting of 5
elements:
P: Politics - Politics.
E: Economics - Economics.
S: Social - Social.
T: Technology - Technology.
E: Environmental - Natural.
PESTE model for analysis and assessment of the macro environment
2.1.1. Economic environment assessment
Factors of the economic environment that need to be assessed include
monetary policy, fiscal policy, business cycle, growth rate, inflation, interest
rates, and exchange rate. These factors greatly affect the operation and
decision-making of enterprises. Specifically:
Interest rates have a great impact on capital costs and affect business expansion
and development strategies.

5. The exchange rate has a big impact on the supply, the cost of exported goods,
and the price of imports.
Inflation greatly affects salary costs, and interest rates as well as make
businesses face the decision to increase selling prices or reduce costs and face
difficulties with long-term debt repayments that increase when inflation occurs.
The level of growth creates opportunities for businesses to grow.
Assess the economic environment of the business
2.1.2. Assess the political and legal environment
The political and legal environment is an important factor that businesses need
to consider. Without political stability, the long-term and sustainable
development of enterprises will be seriously affected. Laws and industry
mechanisms can create a positive or negative influence on the business strategy
decision-making of enterprises or organizations.
Factors of the political and legal environment that should be considered and
assessed include:
Political stability.
The system of legal documents is complete.
Competition and antitrust law.

6. Tax policies.
Labor Law.
Regulations on safety, consumer protection, and environmental protection.
Rules in international trade.
Assess the legal and political environment
2.1.3. Assessment of the technology environment
Technology helps appear substitutes and new materials, affecting the input
market of enterprises. Technology also makes businesses more competitive due
to the appearance of more substitute products and services based on new
technologies and techniques.
On the other hand, if the speed of technological development causes more
inventions and inventions to be created and applied, the enterprise's technology
becomes obsolete and productivity is low.
Factors of the technology environment that need to be considered include:

7. Science and technology development policy.
Technology life cycle.
Consumption and cost of energy use.
The development of information, and communication.
Research and development, automation.
The development of modern engineering technology in the whole industry.
Patents, inventions, technological monopolies…
The technological environment can make your products obsolete and there are many
competing products to replace them
2.1.4. Assessment of the socio-cultural environment
Social culture greatly affects the consumption habits, behavior, and preferences
of customers as well as helps to create the internal culture of the business and
affects the way businesses behave and communicate with outsiders. outside.
Sociocultural factors affect the aggregate demand for goods and services of
enterprises and how businesses meet customer needs.
In order to assess the business environment of an enterprise, the factors of the
socio-cultural environment need to be considered, including:
Population growth.

8. Age structure.
Migration and labor resources.
Gender equality.
Income distribution.
Health.
Job.
General education level.
Social Security.
The socio-cultural environment greatly affects the consumption habits, behavior,
and preferences of customers
2.1.5. Assessment of the natural environment
The natural environment creates markets that supply business inputs as well as
affect income, employment, and population. From there, it affects the
purchasing power, consumption ability, sales of enterprises, and sustainable
development strategies of enterprises and organizations.
Factors of the natural environment to consider include:
Natural resources.
Land. Climate.
Weather.
Environmental pollution.

9. The natural environment affects business inputs and population distribution
2.2. How to assess the industry environment?
Michael Porter's 5 competitive forces model is commonly used when assessing
the industry environment of enterprises with the focus on analyzing and
evaluating the following 5 factors:
Alternative products and services.

10. .2.1. Evaluate current competitors
The assessment of current competitors should consider the intensity of industry
competition and the assessment of competitors.
Assess the intensity of competition in the industry on aspects such as:
Assess the number and texture of competitors.
Assess the specificity and growth rate of the industry.
Evaluate the ratio of fixed costs and inventory costs.
Evaluate the difference between competitors
Barriers prevent retreat.
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11. The assessment of current competitors should take into account the
intensity of industry competition
Competitor analysis should pay attention to:
Get to know your direct competitors.
Identify and analyze competitor strategies.
Assess your opponent's strengths and weaknesses.
Anticipate competitor reaction.
Design data bank of competitor information.
Correlation assessment of the strength of the opponent.
Classification is based on size, competitiveness, geographical area, ownership
form, by game rules (good, bad).

12. Need to identify and evaluate direct competitors
.2.2. Assess potential competitors
Potential competitors are businesses that are not currently competing in the
industry but have the potential to enter the industry and become direct
competitors in the future.
These potential competitors, if they enter the industry, will increase the
competitiveness of the industry and increase the production productivity of the
industry. That creates pressure for existing businesses to operate better, be
more efficient and compete with the new attribute.
Characteristics of businesses that can become new entrants include:
New technology: Better quality and efficiency in products and services.
Strong finance: Can advertise and promote massively to dominate the market.
When assessing the business environment of the enterprise, we need to identify
barriers to entry into the industry, find out potential competitors and determine
the pressure these competitors exert on the business.
Barriers to entry are considered based on:
Customer loyalty to existing businesses.
Absolute cost advantage.
Economies of scale
.
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13. Who are the potential competitors of the business?
2.2.3. Supplier rating
Suppliers play an important role in the business situation of the enterprise,
ensuring a part of the stable operation of the business as planned . In particular,
suppliers can put pressure on businesses to sell higher prices as well as lower
quality services when:
There are few suppliers.
The cost of switching to another supplier is high.
Products are scarce, less likely to be substituted.
Suppliers can merge vertically, forming competitors.
Therefore, supplier evaluation is quite important when considering the industry
environment of the business. To evaluate this factor, we need to identify the
inputs of the current product or service and evaluate the importance and
scarcity of these factors.
See also: Supplier evaluation with CRIF D&B Vietnam's solution
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14. The supplier partially guarantees the stable operation of the business as
planned
2.2.4. Customer reviews
Customers are one of the important factors that any business needs to consider.
They can create pressure on businesses to sell lower prices as well as demand
better quality and services in the following cases:
Buyer switching costs are low.
Buyers are big and important customers.
The business has few customers.
Risk of vertical mergers, becoming competitors.
Buyers create credibility for businesses.
The quantity and quality of information for buyers increases.
Therefore, we need to carefully consider the target customers as well as the
pressure they can cause on the business when assessing the business
environment.
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15. Customers can create pressure on businesses to sell lower prices as well as
demand better quality and services
2.2.5. Evaluate alternative products and services
Substitute products and services are products that meet the same needs that
the industry is providing . These products can limit the profitability and ability to
set high prices for the business.
To assess the pressure of substitute products and services, it is necessary to
consider:
Growth rate of the industry providing alternative products and services.
Manufacturers of substitute products are increasing profits and capacity.
Alternative products are attractively priced.
Low product switching costs.
Substitute product with equivalent or better functionality.
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16. Substitute products and services are products that meet the same needs
that the industry is providing
3. Proactively limit business risks with CRIF D&B Vietnam's solutions
It can be seen that the objective factors of the business environment cannot be
affected. Therefore, to reduce business risks and make smarter decisions,
businesses need to be proactive with subjective factors.
And to do this, use CRIF D&B Vietnam's risk management solutions to increase
sales:
Use BIR business information report to evaluate partners and competitors.
Use SIR supplier information reports to assess and manage supplier risk.
Use Hoover data to find potential partners, suppliers, and customers with a
large, authentic database.

17. Use CRIF D&B Vietnam solutions to reduce risk and grow your business
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