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The document discusses the various constituents of a business environment. It defines the business environment as both internal (within the firm) and external (outside the firm). The external environment includes macro factors like demographic, natural/ecological, economic, political, cultural/social, legal, and technological environments. It also includes micro factors like customers, competitors, suppliers, and public. Each external factor is then discussed individually and examples are provided. The internal environment is also introduced as including a firm's values, objectives, management structure, employee relations, and brand image.
The document discusses the various constituents of a business environment. It defines the business environment as both internal (within the firm) and external (outside the firm). The external environment includes macro factors like demographic, natural/ecological, economic, political, cultural/social, legal, and technological environments. It also includes micro factors like customers, competitors, suppliers, and public. Each external factor is then discussed individually and examples are provided. The internal environment is also introduced as including a firm's values, objectives, management structure, employee relations, and brand image.
The document discusses the various constituents of a business environment. It defines the business environment as both internal (within the firm) and external (outside the firm). The external environment includes macro factors like demographic, natural/ecological, economic, political, cultural/social, legal, and technological environments. It also includes micro factors like customers, competitors, suppliers, and public. Each external factor is then discussed individually and examples are provided. The internal environment is also introduced as including a firm's values, objectives, management structure, employee relations, and brand image.
UNIT 1 INTRODUCTION A business can grow and prosper in a particular environment just as a plant can grow in a particular soil, climate, water supply etc.
Hence the entrepreneur has to pay attention to the environment.
If he is able to adapt his business to the environment effectively and efficiently the business can make higher profits. This makes the study of business environment important. Constituents of Business Environment Environment of business can be classified as internal i.e. within the firm and external that is outside the firm.
The external environment is a sum total of political, economical, social, legal factors that directly influence the Profit and production of business firm.
A systematic study of each component of external environment is necessary to understand how they interact with each other and affect the working of business. Let us discuss each of these environments in detail. External environment External factors , these include Macro factors and micro factors. Macro Environment: Demographic Environment
Natural/Ecological Environment
Economic Environment
External environment Political environment
Cultural & Social Environment
Legal environment
Technological environment
International environment
External environment while micro factors are those which affect the organization directly it involve Customers Competitors suppliers and public
Macro Environment What is Demographic Environment?
Through the help of internet find out the Population of India Male Female ratio Macro Environment What is Demographic Environment? The demographic environment is one of the elements of the marketing environment and includes such important aspects as population size and growth rates, age and sex profiles, family lifecycle stages, occupation patterns, levels of education, actuarial health and morbidity projections, etc Through the help of internet find out the Population of India - 121 Crores Male Female ratio - 940 females per 1,000 males
Macro Environment The Demographic Environment Size of the population The financial status of the population Rural Urban Distribution The rate of Growth Labour Supply Level of Education
Economic Environment Economic Conditions in the Market Demand Factors Supply Factors Economic Policies of Govt Economic Systems Capitalist Economy Centrally planned or communist economy Mixed Economies Match the following
Capitalist Economy - China communist economy - India Mixed Economies - USA
Match the following - Answers
Capitalist Economy - USA communist economy - China Mixed Economies - India
POLITICAL ENVIRONMENT In any country, the political environment is characterized by the following dimensions: The nature of the polity The nature of the constitution of the country The political system The political awareness of the people and of the government The laws passed by the government Natural/Ecological Environment Natural environment consists of natural resources, like land, water, minerals, climatic conditions, rainfall and all other natural resources found on the surface of the earth and in its bowels.
A study of natural environment is useful in deciding the location of business. The availability of raw materials in a particular area affects locational decisions of business. Social and cultural environment Social environment includes customs, traditions, beliefs, values, tastes and preferences, buying and consumption habits of various social groups of the society.
The social environment reflects the expectations of different social classes operating in the society. Each group has some expectations from business firms.
Social environment is supplemented by cultural environment. Culture may be defined as a some total of knowledge, belief, art, morals, laws, customs and other capabilities and habits acquired by individuals and groups as elements or society. Regulatory Environment (Legal Environment) Laws affecting private Business
Laws relating to Employer-Employee relations
Laws Relating to Consumers Technological Environment Technology relates more to technique of production or application of scientific know-how to improve the quality and quantity of the product and production process.
Technological environment consists of a) State of domestic or indigenous technology b) Facilities for Research and Development c) Technical Collaborations etc. A study of technological environment is very essential due to various reasons Micro factors Customers Competitors Suppliers Channel Intermediaries Society