Analysis of Business

Environment

Dr. L. Mothilal,
Assistant Professor,
Department of Management Studies
Pondicherry Central University, India
Email: mothilal2020@gmail.com
https://www.linkedin.com/in/dr-mothilal-lakavath-7469b34/
https://www.slideshare.net/mothilalacad
https://www.facebook.com/mothilal2020
Scanning the Environment
Analysis of Environment

Scanning

Monitoring

Forecasting

Assessment
Scan for Relevant Changes in

Economic Environment

Political and Legal Environment

Socio-Cultural Environnent

Technological Environment

Global Environment
 Assessing the Current and
Future Environmental Changes

Socio-
Cultural Technological &
Political &
Legal Global

Economic
Fad
Fad is short lived
mushrooming of
opportunity which is
difficult to predict and
forecast. Business profit
from fad is pure matter of
luck and chance.

Source: http://www.managementstudyguide.com/scanning-market-
environment.htm
Trend
Trend is something which
takes time to build up
compared to fad and has a
predictable future.
Trend is sometimes co-
related with changes in
social culture and economic
situation.
Source: http://www.managementstudyguide.com/scanning-market-
environment.htm
Megatrend
 Megatrend is much slower in
development and is associated with
political, socio-economical,
technology and regulatory changes.
 Megatrends are estimated to last
around half decade or more.
 For companies trend and megatrend
are of great importance because they
present business opportunities to
them.
Source: http://www.managementstudyguide.com/scanning-market-
environment.htm
This trend-spotting (scanning) activity can
be undertaken by company itself or
through market research. This activity can
also be outsourced to companies, which
specialize in analyzing current social and
economic changes.

Fitness and diet are trend, which witness

growth across the globe.
Factors influencing the Business
Environment

Globalization is affecting the way

companies are conducting their
business.

Communication and connectivity are

reaching at a new level every day.

New economic powers like India,

China, Brazil and Russia are exerting
their influence.
Monitoring
The Business Environment consists of a complex set of
interacting forces and influences outside the Organization.

The Business Environment affects the organization's ability

to build and maintain mutually beneficial relationships with
its target customers.

Through continuous monitoring its Business Environment a

company must be able to anticipate change and act in a
proactive way rather than leaving it to a reactive reaction.
It must also keep up to date by realizing.

Source: http://www.studymode.com/subjects/importance-of-monitoring-
marketing-environment-page1.html
Forecasting
Categories of Forecasting

Qualitative

Quantitative
Historic Revolutions
 Historical Revolutions
Black Revolution – Petroleum Production

Blue Revolution – Fish Production

Brown Revolution – Leather/non-conventional(India)/Cocoa

production

Golden Fibre Revolution – Jute Production

Golden Revolution – Fruits/Overall Horticulture development/Honey

Production

Green Revolution – Food grains

Grey Revolution – Fertilizer

Pink Revolution – Onion production/Pharmaceutical (India) /Prawn

production
 Revolutions Continued…

Red Revolution – Meat & Tomato Production

Round Revolution – Potato

Silver Fiber Revolution – Cotton

Silver Revolution – Egg/Poultry Production

White Revolution (In India: Operation Flood) – Milk/Dairy

production

Yellow Revolution – Oil Seeds production

Evergreen Revolution – Overall development of Agriculture

Changes in Production Technology
Since Prometheus stole the fire
of knowledge from right under
the noses of the gods on Mount
Olympus and bestowed it upon
mankind, humans have not
stopped fiddling with it
and creating striking innovations
all throughout their evolution

Source: https://www.sentryo.net/the-4-industrial-revolutions/
THE FIRST INDUSTRIAL REVOLUTION –
1765

The first revolution spans from the end of the 18th century
to the beginning of the 19th century

Replaced agriculture with industry as the foundations of the

economic structure of society

Mass extraction of coal along with the invention of the

steam engine created a new type of energy that thrusted
forward all processes - Development of railroads and the
acceleration of economic, human and material exchanges.

Source: https://www.sentryo.net/the-4-industrial-revolutions/
THE SECOND INDUSTRIAL REVOLUTION – 1870

New technological advancements initiated the emergence of a new source of

energy: electricity, gas & oil

The development of the combustion engine set out to use these new resources to
their full potential. Furthermore, the steel industry began to develop and grow
alongside the exponential demands for steel

Chemical synthesis also developed to bring us synthetic fabric, dyes and fertilizer.

Methods of communication were also revolutionized with the invention of the

telegraph and the telephone and so were transportation methods with the
emergence of the automobile and the plane at the beginning of the 20th century

Industrial model based on new “large factories” and the organizational models of
production as envisioned by Taylor and Ford

Source: https://www.sentryo.net/the-4-industrial-revolutions/
THE THIRD INDUSTRIAL REVOLUTION – 1969

A third industrial revolution appeared with the emergence of a

new type of energy whose potential surpassed its
predecessors: nuclear energy.

This revolution witnessed the rise of electronics—with the

transistor and microprocessor—but also the rise of
telecommunications and computers.

This new technology led to the production of miniaturized

material which would open doors, most notably to space
research and biotechnology.

For industry, this revolution gave rise to the era of high-level

automation in production thanks to two major inventions:
automatons—programmable logic controllers (PLCs) - & Robots.

Source: https://www.sentryo.net/the-4-industrial-revolutions/
The first industrial revolution
used water and steam to
mechanize production

The second used electric energy

to create mass production

The third used electronics and

information technology to
automate production.

Source: https://www.sentryo.net/the-4-industrial-revolutions/
Fourth Industrial Revolution

Today a fourth industrial revolution is underway which

builds upon the third revolution and the digital revolution
that has been taking place since the middle of the last
century.

This fourth revolution with exponential expansion is

characterized by merging technology that blurs the lines
between the physical, digital and biological spheres to
completely uproot industries all over the world.

The extent and depth of these changes are a sign of

transformations to entire production, management and
governance systems.

Source: https://www.sentryo.net/the-4-industrial-revolutions/
Fourth Industrial Revolution contd…

Its genesis is situated at the dawn of the third millennium with the
emergence of the Internet.

This is the first industrial revolution rooted in a new technological

phenomenon—digitalization—rather than in the emergence of a new type
of energy.

This digitalization enables us to build a new virtual world from which we

can steer the physical world.

The industry of today and tomorrow aim to connect all production means
to enable their interaction in real time. Factories 4.0 make
communication among the different players and connected objects in a
production line possible thanks to technology such as Cloud, Big Data
Analytics and the Industrial Internet of Things (IIoT)

Source: https://www.sentryo.net/the-4-industrial-revolutions/
Fourth Industrial Revolution contd…
However, this fourth industrial revolution could be the first to
deviate from the energy-greed trend—in terms of non-renewable
resources—because we have been integrating more and more
possibilities to power our production processes with alternative
resources.

Tomorrow, factories 4.0 will be embedded in smart cities and

powered by wind, sun and geothermal energy.

Within this context of profound technological and societal

changes—because the two always go hand in hand during
industrial revolutions—which is taking us towards global
digitalization, industrial cybersecurity will become a leading
sector

Source: https://www.sentryo.net/the-4-industrial-revolutions/
Change for Better…
Era of Turbulent Change

In era of turbulent
change, managing
change &
discontinuity is a
key Issue
 Era of Turbulent Change

PDCA - PDCA
P – Plan
D – Development
C – Check
A – Act
Era of Turbulent Change

 Companies are operating in a

war zone of rapidly changing
Competitors
Technology
New Laws
Trade Policies
 Diminishing Customer Loyalty
 Era of Turbulent Change

“ It is not the strongest

nor the most intelligent
that will survive but the
one who is the most
responsive to the
change” – Charles Darwin