Group -A
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Sushil Gnawali
Aashish Bhattarai
Ramesh Bikram Thapa
Milan Khatri
Pawan Adhikari
Nirajan Neupane
Bibek Pahadi
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Business environment refers to all surrounding
internal and external forces which influences
the performance and outcome of business.
Business environmental forces influences on
the development & growth of business.
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Forces & conditions of environmental change
overtime because of dynamic world & these
changes brings opportunities & threat to
Business.
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Internal environment provides strength &
weakness to the business whereas external
environment brings opportunities and threats.
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Hence it is very essential to analyze the
business environment properly before & while
operating business.
Interaction of Business & its Surroundings
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Micro environment of business
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Macro environment of business
Suppliers
Supply raw materials and other components
(for input)
Importance
Reliable supply – continuous supply for smooth
functioning
1)
2) Customer
Different categories of customers
1. Industrial customers
2. Wholesale customers
3. Retail customers
4. Government customers
5. Foreign customers
3. Market intermediaries
1.
Middlemen
2. Physical distribution firms (warehouses and
transport firms)
3.
Marketing service agencies(Advertising
agencies market research firms, media firms,
consulting firms)
4. Financial intermediaries
4. Competitors
1. The Threat of entry of new firms
2.
The Power of Buyers
3.
The Power of Supplier
4. s The Power of Substitutes
5. The Intensity of Rivalry among existing firms
Economic environment
1.
Economic conditions- GDP, Business Cycle,
Unemployment, Inflation, Balance of Payment,
Fiscal Policy, Monetary Policy, Exchange rate
Policy, Interest Rate
2.
Economic policies
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Budget
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Industrial polic
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y Trade policy
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Agricultural policy
3. Economic system- Capitalistic, Socialistic, Mixed
A.
B. Political environment
1. Legislature - Labor Laws like Factories Act,
EPF Act, ESI Act, Industrial Disputes Act,
Minimum Wages Act, Payment of Wages Act,
etc MRTP Act, Law of Contracts, Companies
act, IDRA Act, FERA, Import & Export Control
act, Tax laws
2. Executive- Administrators
3.
Judiciary - District, High Courts, Supreme
Court, International courts.
C. Socio cultural environment
1. Attitude of people towards work and health.
2. Role of family.
3.
Marriage. Religion.
4.
Education
5.
Ethical issues
6.
Social responsibility of business
D. Natural Environment
1. Natural resources.
2. Weather and climatic conditions
3. . Locational aspects.
4.
Nearness to port facilities.
E. Technological environment
1. Nature of technology
2. Scope for innovation
F. International environment
1. Economic
2.
Political
3. Legal
4. Demography
5.
Technology
F. International environment
1. Economic
2.
Political
3. Legal
4. Demography
5.
Technology
1.
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Strategy Formulation
For continuity
Provides basic inputs
Identify competitive position
2. Competitive Analysis
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Provides market information
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Counter strategies
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Deep analysis of strength and weakness
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Regular monitoring
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Set “rule of the game”
3. Adaptability
 Make less harmful
 Adopt prevailing conditions
4.Stability
 Foresee the impact of environmental forces.
 Analysis of national & international scenario.
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Political force
Energy- land/building
Slow growth in economy
Social change
Labour market
Globalization trend
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Extrapolation method
forecasting ,trends analysis ,regression analysis
Historical analysis
studied different areas
Intuitive reasoning
“best guess” by avoiding personal biasness
Scenario building
time oriented sequences of events that have
cause effect relationship.
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Model building
simulation of mathematical & econometric
model
Network method
Contingency tree (graphical display of trends)
& relevance tree(logical network assigning
degree of importance)
Survey
Experts , customers and others
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Delphi techniques: collection of experts
opinion systematically.
1.
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Strategic Management:
It is concerned with analytical and complex
representation of organizational environment
It involves decisions and actions by top level
It focuses on long term objectives
It is a means to achieve goal
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Radical change due to IT sector development
Globalization
Major change in political economical spheres
(integration of world economy due to WTO,
regional agreement)
Liberalization of economy in third world .
Social change (life styles, consumerism ,
environmental inferences)
International alliances
Education
Economic slow down in many countries.
1.
2.
3.
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5.
6.
7.
Goal formation
Identification of opportunities and threats
Identification of strength and weakness
Formulation of strategies by matching
opportunities and strength.
Avoidance of weakness and threats
Development of strategic option
Correction and reformulation of strategies.