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An Overview Of BusinessEnvironment

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Concept Of Business Environment

Business Environment means the

aggregate of all the forces, factors andinstitutions which are external to andbeyond the control of an individual

business enterprise but which exercise asignificant influence on the functioningand growth of individual enterprises.

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Nature of Business Environment Aggregative:totality of all the external

forces which influence the working and

decision making of an enterprise. Inter-related:various elements are

closely interdependent and any change in one

element affects the other elements. Relative:it differs from country to country

and even region to region.

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Contd. Inter-temporal:it changes over time,

specially in long run, it changes

certainly. Uncertain:business environment is

volatile so it becomes very difficult toforecast.

Contextual:business environmentprovides the macro framework withinwhich the business firm (a micro unit)

operates.

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Significance of Business

Environment

First mover advantage

Early warning signal Customer focus

Strategy formulation

Change agent Public image

Continuous learning

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Types of Business

EnvironmentBusiness environment

Internal environment External environment

Micro environment Macro environment

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Factors of Internal EnvironmentFactors

culture

Mission & objectives

Top management structure

Power structure

Company image & brand equity

Human & other resources

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Elements of Micro EnvironmentMicro Environment

customers

Competitors

suppliers

Marketing intermediariesfinanciers

publics

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Various components of MacroEnvironment

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Political & Legal Environment The constitution of

the country

Political organization Political stability

Defence & military

policy Laws governing

business

The judicial system

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Social & Cultural Environment Demographic forces

Caste structure &

family organization Educational system

& literacy rates

Customs, beliefs &life styles

Taste & preferenceof people.

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Economic & Financial

Environment Nature of economic

system

Economic structure Economic policies

Economic

infrastructure

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Technological & Physical

Environment Rate of technological

change

Approaches toproduction of goods& services

Research &developmentsystems

New approaches &

equipments

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Natural Environment Climatic conditions

Agricultural,

commercial & othernatural resources

Ecological system

Levels of pollution

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Global Environment International

agencies

Treaties &agreements

Economic &business conditionsin other countries

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Coping with Environmentalchanges

Buffering

Leveling

Anticipation

Rationing

Dominating Changing

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Thank you