 Relation Between Business Environment and Strategic Management

The environment is defined as anything that exists outside of an individual or organization. From
this perspective, the business environment refers to all external factors that will influence the
business's activities. Some experts, however, have used the term "environment" in a broader
sense. They defined the business environment as any external or internal factor that has a direct
or indirect impact on business or business activities. The business environment includes all of the
factors that influence a company's operations, actions, and results. It is divided into two parts: the
macro environment and the micro environment. The macro environment includes the legal and
political environment, the social environment, the economic environment, and the technological
environment, while the micro environment includes customers, competitors, stakeholders,
suppliers, banks, and so on.
Strategy is an action plan designed to achieve a particular goal. It is the direction and scope of an
organisation over the long-term: which achieves advantage for the organisation through its
configuration of resources within a changing environment, to meet the need of markets and to
fulfil stakeholder expectations.
The Characteristics of Strategy Are:
1. It has a long-term direction.
2. It defines the scope of an organisation's activities.
3. It should match activities with the environment.
4. It bounded rationality and resource scarcity.
5. It has expectations and values.
6. It is the basis of company operation; the organisation structure and daily operation
policies should all be based on the strategy.
Strategy planning is determined by the external and internal environment; however, it may be
ineffective because the environment cannot predict clearly. Therefore, marketers should obtain
new information in the business environment continually and do strategic planning that can meet
the changing conditions.
The process of strategic management is: Strategy formulation (at this stage, marketers should
analyse the business environment), Strategy implementation, and Strategic evaluation.

Summary:
 Business grant permission is assumed as the organised works of energies to supply
purchasers accompanying merchandise and duties for a profit.
 Strategy planning is determined by the external and internal environment; however, it may be
ineffective because the environment cannot predict clearly.
 Business goals are aims that a trade predicts, realising in a set magnitude
 There are certain factors or forces, internal and external, to the organisation influencing it in
both positive and negative ways. These different components of the business environment
have been explained.
 Internal Environment contains those determinants or forces that survive inside an
organisation doing the depiction of an organisation.
 External Environment involves those determinants or forces that survive outside an
organisation doing the act of an organisation
 Macro Environment: These are the determinants or environments that are approximate to
all trades and are wild