Business
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BUSINESS ENVIRONMENT
Business Environment mainly refers to external forces that impact business. Such forces include political-legal ,technological ,cultural ,economic and physical.
Factors under External Environment
All the factors that provides opportunities or pose threats to an organization make up its external environment.
DEMOGRAPHIC ENVIRONMENT
SOCIAL ENVIRONMENT
CULTURAL ENVIRONMENT
POLITICAL ENVIRONMENT
ECONOMIC ENVIRONMENT
FINANCIAL ENVIRONMENT
TRADE ENVIRONMENT
TECHNOLOGICAL ENVIRONMENT
LEGAL ENVIRONMENT
REGULATORY ENVIRONMENT
TAX ENVIRONMENT
ETHICAL ENVIRONMENT
External environment consists of 1. Micro Environment 2. Macro Environment
Micro Environment
Micro environment is called as the task environment and operating environment.
Micro environment forces have a direct bearing of the operation of the firm.
These factors are present in companies environment and affect on the performance of the companies.
Includes – suppliers ,marketing intermediaries .competitors,customers and public.
Micro environment are more intimately linked to company than macro.
Suppliers :
Those who supply inputs,raw material and components
Uncertainty in supply compels high inventory cost.
India maintains stocks of 3 to 4 months were as Japan maintains for few hours.
Eg : Nirma -believes of the logic that captive production plant for raw material is best for cost control.(backward integration)
Co feel outsourcing is more beneficial
Risk to depend on single supplier
Globally companies are resorting to partenering relationship marketing.
Customers:
Business exists because of customers
Monitoring customers sensitivity is perquisite
The choice of customer by the firm can be on
Relative profitability
Dependability
Stability of demand
Growth prospects
Today customer is global customer as exposed to global products.
Competitions:
Competition includes not only with competitors of same product but all those who compete for discretionary income of consumers.
Eg : the competiton for T V firm may not be only from other T V manufacturing but also from 2wheelers , refrigerators,cooking ranges,stereo sets etc,bank schemes.
To influence basic desire of customer
Generic competition: If the customer decides to spend discretionary income on recreation , he come across alternatives like, TV ,stereo ,2 in 1,3 in 1 P C etc.
It is competition among alternative.
Marketing Intemediary:
Firms that aid the company in promoting,selling and distributing its grads to final buyers.
Includes middlemen,agents,merchants,distribution firms,warehouses,transportation firms,marketing,financial intermediaries ,insurances etc.
Financiers
Financiers of the company
Their financial capability,policies, strategies.attitudes,ability to provide non financial assistance.
Public
Public is any group that has actual or potential interest I or impact on organizations ability to achieves its interest.
Media publics,citizens action publics,local publics etc,consumers publics
Issues against companies
Tarnishing the image by media
Environmental pollution
Chills labour,sweat labour,cruelty against animals.
Macro Environment
Macro environment consists of larger societal forces that affect on companies micro environment.
Micro environment forces have a direct bearing of the operation of the firm.
These factors are present in companies environment and affect on the performance of the companies.
Includes – suppliers ,marketing intermediaries .competitors,customers and public.
Factors under Internal Environment
The internal environment comprises the resources ,synergy and distinctive competencies of a firm.These together determine its organizational capability in terms of its strengths and weaknesses existing in the different functional areas – marketing, operations,personnel,financial,technical,etc.
Needless to mention that internal environment is constantly influenced by the external environment.
STRATEGY
STRUCTURE
MARKETING CAPABILITY
OPERATION CAPABILITY
PERSONNEL CAPABILITY