THE NATURE AND SCOPE OF BUSINESS ENVIRONMENT

30 Drugs banned by USFDA TROUBLE (LE) .P. Being evicted from Singrur Led to worldwide recession (IE) (SE) RELIANCE ---TATA Nano ---US Sub ---prime Crisis NEW ECONOMIC ---.EVENTS AFFECTING BUSINESS CPI ---Backing out in the matter of INDIA signing The Nuclear Deal With The USA (PE) Walking out of Retail in U.Led to economic progress (EE) POLICY OF INDIA RANBAXY ---.

Stamp duty waiver (PE) Poor Internal management (LE ) SATYAM ---COLLAPSE .RIL Budget «« Resistance to increase in tariffs (SE) ««. Threat to Outsourcing SEZ ««. Placing emphasis on Rural Sector (EE) Pope¶s Call ««.

Raise funds from capital markets «.MEANING & SCOPE OF BUSINESS TO PRODUCER Activity «. Advertisement creates awareness of product «. Raise financial resources «. Obtain various inputs «. Distribution agencies reach the product to the ultimate user «. Risks are covered through Insurance companies USER . Transport finished product to market «.

FINANCE «. ADVERISING «. TRADE «.. PRODUCTION «. INSURANCE «. INDUSTRY «..BUSINESS DIMENSIONS «... COMMERCE . TRANSPORT «.. BANKING «.....

Tata Motors.CHARACTERISTICS OF MODERN BUSINESS LARGE SIZE HUL. Hero Honda Small number of firms selling a homogenous or differentiated product Modern business in its attempt to grow over time takes recourse to diversification Companies have expanded their revenues and assets base across countries and engage in cross border flow of capital goods and know how OLIGOPOLISTIC CHARACTER DIVERSIFICATION GLOBAL REACH . Maruti Udyag. Telco. L&T.

Role of Govt. quality. and packaging for offering differentiated products. in both developed & underdeveloped countries has diminished GOVERNMENT CONTROL Govt. Role Market failures Externalities Public goods . R & D Japanese & Korean Companies CHANGE Strategies for making changes in product design.TECHNOLOGY ORIENTATION Technology orientation to improve products and cut costs.

Drugs Impact .g. WTO Environment has different effects on different firms in the same industry e. events.g.CHARACTERISTICS OF ENVIRONMENT Environment consists of a number of factors. conditions and influences arising from different sources which impact business Complex Dynamic Environment is constantly changing Multifaceted Environment has different effects on different industries e.

exchange rate variations. interest rate fluctuations. .g Liberalization«HUL Increases Competition General environmental changes alter the boundaries of an industry and change the nature of its competition Unpredictable Environmental changes are difficult to predict with any degree of accuracy e.g.Opportunity & Threat It may be an opportunity as well as a threat to expansion. rate of inflation. E.

executives are able to adjust to the prevailing conditions and thus influence the environment to make it congenial to do business .IMPORTANCE OF THE STUDY OF BUSUNESS ENVIRONMENT STRATEGIES & POLICIES : Helps an organization its broad strategies and long term policies COMPETITORS ANALYSIS : Enables an organization to analyse its competitors strategy and thereby formulate effective competitive strategies DYNAMISM : Knowledge about changing environment will keep the organization dynamic in its approach IMPACT : Enables the organizations to foresee the impact of socioeconomic changes at the national and international level on its stability ADJUSTMENT : As a result of the study.

Environment and Strategic Management Environmental scanning Strategy Formulation Strategy Implementation Evaluation and Control .

Input Providers Employees Customers INTERNAL ENVIRONMENT Rivals Channel Members Government .

Domestic Macro Environment Economic System Economic Stability Growth & Distribution Environment EXTERNAL ENVIRONMENT Competitive Environment Non Economic Macro Environment Economic Policy Demographic Environment Socio-Cultural Environment .

INTERNATIONAL ENVIRONMENT .

DIFFERENT LAYERS OF BUSINESS ENVIRONMENT INTERNATIONAL ENVIRONMENT Domestic Macro Environment Economic System Economic Stability Competitive Environment EXTERNAL Input Providers Customers Employees Growth & Distribution Environment Economic Policy Internal Environment Rivals SocioCultural Environment Channel Members BUSINESS Govern.Demoment graphic Environment Non Economic Macro Environment INTERNATIONAL ENVIRONMENT .

BUSINESS ENVIRONMENT DOMESTIC MACROECONOMIC ENVIRONMENT NON ECONOMIC ENVIRONMENT INTERNAL ENVIRONMENT PUBLIC RELATIONS ENVIRONMENT SECTORAL ENVIRONMENT THE INTERNATIONAL ENVIRONMENT .

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