INDIAN BUSINESS ENVIRONMENT.ppt

8/14/2019 INDIAN BUSINESS ENVIRONMENT.ppt

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INDIAN BUSINESS

ENVIRONMENT

FUNDAMENTALS OF BUSINESS

&BUSINESS ORGANISATIONS


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BUSINESS

Business may be understood as the organizedefforts of enterprises to supply consumers withgoods and services for a profit.

Or

It may be understood as the organized efforts ofenterprises to earn profit. Business may be smallor big in size but all of the aim at making profit.


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BUSINESS ENVIRONMENT

It can be defined as the forces, factors and institutionswith which the businessman has to deal with to achievethe objectives.

OR Business Environment is the surroundings in which

business exists. Whenever any businessman is operatingor working then he has to interact with customers,

suppliers and he has to perform the transactions with inthe rules and regulations of the government. All thesepersons, institutions and policies form a part ofbusiness environment


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BUSINESS ENVIRONMENT

Definitions:

Environment of the Business means theaggregate of all conditions, events and influences

that surround and affect it.Keith Davis

Business Environment is the total of all

things external to firms and individuals whichaffect their Organization and operations.

B.O. Wheeler


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TYPES OF BUSINES

ENVIRONMENT

There is two types of business environment:

Internal Environment

These are generally regarded as controllable factorsbecause the company has control over these factors.

External Environment

These are the one which are beyond the control of acompany.


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Value SystemThe values, beliefs and the acceptance of it by the

founders has important bearing on the choice of

business, the mission and objectives of theorganization, business policies and practice.

Management Structure and Nature

The organizational structure, the compositionof the Board of Directors, extent ofprofessionalisation of management etc. are theimportant factors influencing business decisions.


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Internal Power Relationship

The Support of the Top management to its different

employees and vice-versa i.e. the support the topmanagement enjoys from different levels of employees,shareholders. Board of Directors have importantinfluence on the decision and their implementations.

Human Assetsthe competence, morale and motivation of employeeshave a significant impact in the success of the firm.


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Company Image and Brand Equity

The image and brand equity of the company plays asignificant role in raising finance, forming alliance,

choosing dealers and suppliers, launching of newproducts entering foreign markets.

Mission and Objectives

The business philosophy and the purpose of a companyguide its priorities, business strategies, product marketscope and its development process.


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External Environment

It consist :

Micro Environment

Micro environment is also known as Mask environment and the

Operational environment because the micro environmentalforces have direct impact on the operations of the firm.

Macro Environment

Macro environment refers to the general environment or remote

environment with in which a business firm and forces in itsmicro environment operate.


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Micro Environment

Suppliers of inputsCompanys success to a great extent depends upon the

low cost production of goods. This can be ensured byuninterrupted supply of inputs, particularly raw

material.Customers

A business exists to create and satisfy customers. Afirm may have customers like individuals customer,

households, government departments, commercialestablishments. In order to be successful a companymust understand and meet the needs and expectationsof its customers.


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Micro Environment

CompetitorsA company may face direct as well as indirectcompetition. Direct competitors are the forms whichoffers the same or similar products and services. e.g.

Sony TV faces direct competition from other brandslike Samsung, Onida, BPL.

Marketing IntermediariesMiddlemen like agents, wholesalers, retailers serve as a

link between the company and its customers.Advertising agencies, marketing research agencies etc.are other types of marketing intermediaries.


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Micro Environment

Financiers

Debenture holders, shareholder financial institutionsprovide financial assistance to the firm. Financial

capacity, polices and attitude of financiers are importantfactors for the company.

Publics

A public is any group that has an actual or potential

interest in or impact on an organization ability toachieve its interest. E.g. Media group, Non-governmentorganization


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Macro Environment

Global Environment

it refers to those global factors which are relevant tobusiness as the WTO principles and agreements,

International conventional/treaties/agreement/declarations/protocols etc. economic and businessconditions etc. exp. If the economic conditions in acompanys export prospects are generally very good

and vice-versa. Recession in other countries canincrease the import threats, including dumping.


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Macro Environment

Political and Legal Environment

Political environment serves as the regulatoryframework of business main constituents ofpolitical and legal environment are:

o Image of the country and its leaders.

o Defence and military policy.o Laws governing business.

oThe constitution of the country.


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Macro Environment

Economic and Financial Environment :

o for business the economic system is a parameter andthe business has no choice but to adjust itself with in

the fram3work of the given economic system.o The nature of economic system is capitalist, socialistand mixed economy.

o Economic Policies- i.e. the industrial policy, monetary

policy, fiscal policy.o Economic infra-structure

o The markets and their factors which affect the market.


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Macro Environment

Technological and physical Environment

The main components of technological andphysical environment are

o Research and development (R&D) systems.

o Rate of technological changes.

oApproaches to production of goods and service.


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Macro Environment

Social and cultural Environment

Social environment refers to the characteristics of thesociety in which a business firm exist and operates.

Social and cultural factors include:o Religion

o Caste, Traditions, Norms, Beliefs.

o taste and preferences of customers

o Social and Non-government organization

o Education system.


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Macro Environment

Natural Environment

o Population and its density

oAgriculture resourceso Natural resources

o Ecological system

o Climatic conditions under which the firmoperates.

Documents

INDIAN BUSINESS ENVIRONMENT.ppt