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bus env.pdf

bus env.pdf

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Published by Vijay Kundeti
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Published by: Vijay Kundeti on Mar 15, 2013
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10/11/2013

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Business Environment Business Environment Business Environment Business Environment Business Environment 
CHAPTER
ContentsContentsContentsContentsContents
IntroductionBusinessObjectives of businessEnvironmental influences on businessEnvironmental analysisCharacteristics of business environmentComponents of business environmentThe micro and macro environmentCompetitive environmentPorter’s five forces model–competitive analysis
Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives
The present chapter aims at:
Definitions and objective of businessExamine environment analysis, characteristics components of the organisation. Let usknow the microenvironment and macro environmentUnderstand the competitive environmentDescribe the Porter’s five-force model and its limitations.
 
Strategic Management for Chartered Accountants
2
“Environment factors of constraints are largely if not totally external and beyond the control of individual industrial enterprises and their arrangements. These are essentially the ‘givers’ withinwhich firms and their managements must operate in a specific country and they vary, often greatlyfrom country to country”.
Barry M. Richman and Melvyn CopenBarry M. Richman and Melvyn CopenBarry M. Richman and Melvyn CopenBarry M. Richman and Melvyn CopenBarry M. Richman and Melvyn Copen
“ The environment includes outside the firm which can lead to opportunities for or threats to thefirm. Although, there are many factors, the most important of the sectors are socio – economic,technical, supplier, competitors, and government”.Glueck and JauchAnalysis is the critical starting point of strategic thinking”
Kenichi OhmaeKenichi OhmaeKenichi OhmaeKenichi OhmaeKenichi Ohmae
“It is not the strongest of the species that survive, nor the most intelligent, but the one mostresponsive to change”.
Charles DarwinCharles DarwinCharles DarwinCharles DarwinCharles Darwin
“Strategy is a deliberate search for a plan of action that will develop a business’s competitiveadvantage and compound it”.
Bruce DBruce DBruce DBruce DBruce D. Henderson. Henderson. Henderson. Henderson. Henderson
“Awareness of the environment is not special project to be undertaken only when warning of change becomes deafening”.
Clifton Garvin, Kenneth R. AndrewsClifton Garvin, Kenneth R. AndrewsClifton Garvin, Kenneth R. AndrewsClifton Garvin, Kenneth R. AndrewsClifton Garvin, Kenneth R. Andrews
1.1 INTRODUCTION1.1 INTRODUCTION1.1 INTRODUCTION1.1 INTRODUCTION1.1 INTRODUCTION
The concept of strategy has been borrowed from the military and adapted for use inbusiness. This book has reviews of strategy formulation, implementation, controlling and monitoring strategic events, which have to suggest that adopting the concept iseasy to business and industry. In business, as in the military, strategy bridges the gapbetween policy and tactics. Together, strategy and tactics bridge the gap between endsand means. Also this book
 
reviews various issue like business environment andcomponents of business environment, competitive environment, Porter’s five forcesmodel, business policy and strategic management, major tasks in strategicmanagement, vision and mission and objectives of the strategic enterprise, strategicanalysis in terms of swot analysis, tows matrix, portfolio analysis, strategic planning,marketing, financial production, logistics, research and development and humanresources strategy formulation, implementation and control and achieved the strategicedge for the purpose of clarifying the concept and placing it in this context.In this chapter, we shall discuss about the business, major objectives of businesslike survival, stability, growth, efficiency and profitability, environmental influenceto business, environment analysis, characteristics of business environment,components of business environment, to know the relationship between theorganisation and its environment, the micro and macro environment and its
 
Business Environment
3
elements like customers, competitors, organisation, market, suppliers, intermediaries,demographic, economic, government, legal, political, cultural, technological and globalenvironment impact on business. Companies how to enter into global market, itsmanifestation trends, strategic response to business, Porter’s competitive and fiveforces model analysis for business enterprises in industry, commerce and servicessector.
1.2 DEFINITION OF BUSINESS1.2 DEFINITION OF BUSINESS1.2 DEFINITION OF BUSINESS1.2 DEFINITION OF BUSINESS1.2 DEFINITION OF BUSINESS
The term ‘typically’ refers to the development and processing of economic values insociety. Normally, the term is applied to portion of economic activities whose primarypurpose is to provide goods and services for society in an effective manner. It is alsoapplied to economics and commercial activities of institutions which having otherpurposes.Business principally comprises of an all profit seeking activities of the organisationwhich provide goods and services that are necessary to economic system. It is themajor economic pulse of a nation, striving to increase society’s standard of living.Finally, profits are a primary mechanism for motivating these activities.Business is in any organisation which makes distribution or provides any articleor service to the customers, who are belonging to members of the society. Businessmay be satisfied customers needs for these purpose customers are able and willing topay for it.Business may be defined as “the organised effort by individuals to produce goodsand services to sell these goods and services in a market place and to reap some rewardfor this effort.”Functionally, we may define business as “those human activities which involvesproduction or purchase of goods with the object of selling them at a profit margin”.The term business refers to the state of being busy for an individual, group,organisation or society.It is also interpreted as one’s regular occupation or profession or economicactivities.It deals with particular entity, company, organisation, enterprise, firms orcorporation.It also interpreted as particular market segment sector like computer businessand it included under term business.It is wide and willing to use different activitiesIt consists of purchase, sale, manufacture, processing, marketing of products,services like manufacturing, trading, transportation, warehousing, banking and finance, insurance and advertising etc.It is clearly stated that all business activities main purpose is to earn profit.Profit as a surplus of business and It accrues and distributed to the owners

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