Professional Documents
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Unit-2 Esp
Unit-2 Esp
Business Environment:
The word 'business environment' indicates the aggregate total of all people, organisations and
other forces that are outside the power of industry but that may affect its production.
• The business environment helps in understanding the threats which are likely to happen
in the future.
• Environmental awareness can help managers identify various threats on time and serve as
an early warning signal. Example: Patanjali products have become a warning signal to
the rest of the FMCG
• The sector to develop similar products. Similarly, if an Indian firm finds that a foreign
multinational is entering the Indian market with new substitutes; it needs to prepare
accordingly.
• Chinese mobile phones have become a threat for Indian mobile phone manufacturers.
(C) It Helps in Tapping Useful Resources
• Business and industry avail the resources (inputs) from the environment and convert them
into usable products (outputs) and provide to society.
• The environment provides various inputs (resources) the like finance, machines, raw
materials, power and water, labour, etc.
• The business enterprise provides outputs such as goods and services to the customers,
payment of taxes to the government, to investors and so on.
Example: With the demand for the latest technology, manufacturers will tap the resources from
the environment to manufacture LED TVs and Smart TVs rather than collecting resources for
colour or Black & White TVs.
(D) It Helps in Coping With Rapid Changes
• The business environment is changing very rapidly, and the industry is getting affected
by changing market conditions.
• Turbulent market environment, less brand loyalty, divisions of markets, changes in
fashions, more demanding customers, and global competition are some examples of
changing the business environment.
Example: Jack Ma started Alibaba as he could see the potential of interest in E-Commerce.
(E) It Helps in Assisting in Planning and Policy Formulation
• Environmental studies reveal that the success of any enterprise is closely bound with the
changes in the environment.
• The enterprises which monitor and adopt suitable business practices not only improve
their performance but become leaders in the industry also.
Example: Apple has been successful in maintaining its market share due to its proper
understanding of the environment and making suitable innovations in its products.
Features of Business Environment:
(A) The totality of External Forces
• Specific forces are those forces which directly affect the operational activities of the
business enterprise.
• Example: Suppliers, Customers, Investors, Competitors, Financers etc.
• General forces are those forces which indirectly affect the functioning of business
enterprises.
Example: Economic, Social, Political, Legal and Technological conditions.
(C) Inter-relatedness
• All forces of the Business environment are interrelated and dynamic, which makes it
difficult to understand.
• Complex nature of Business environment can be understood if we study it in parts.
• Example: Increase in goods and service tax to 15 % would increase the revenue of the
government (economic), which would help the government to improve social being of
people (social) and reduce the personal disposable income of rich people and thereby
controlling inflation.
(G) Relativity
• Business Environment differs from place to place, region to region and country to
country.
Example: In China, the electricity to the industry is provided at cheaper rates as the consumption
increases and hence, it leads to mass production whereas, in India, it is otherwise, higher
consumption of electricity leads to costly electricity which results in lower production & higher
cost of production.
In contrast, group of scholar who express the view that a lack of mobility
possibilities promotes entrepreneurship. Some even speak of entrepreneurship as in
to a action in a rigid social system. Third opinion is the combination of exibility and
the denial of social mobility. It is also printed out that the degree and nature of social
mobility alone is not likely to inuence entrepreneurship, it as determined by other
non economic factors.
• Marginality:
Scholars hold a strong view that social marginalized also promotes entrepreneurship.
They believe that individuals are grouped on the perimeter of a given social system
or between two social systems provide the personnel to assume the entrepreneurial
roles.
People may be drawn from religious cultural, ethinic or migrant minority
groups and their marginal social position is generally believed to have psychological
e ects which make entrepreneurship particularly attractive for them.
• Security:
Psychological factors:
• Need achievement:
The further postulates that with drawal of status of respect would give rise to
four personality types:
1. Retreatist: he who continues to work in a society but remains di erent to his work
and position.
2. Ritualist: he who adopts a kind of defensive behavior and acts in the way
accepted and approved in his society but no hopes of improving his position.
Hagen maintains that once status withdraws has occurred, the sequence of
change information of personality is set in motion, he refers that 'Status with drawl
takes a long period of time as much as 4 or 5 generations to result in the emergence
of ED'.
Develop and strengthen their entrepreneurial quality (i.e.,) motivation or need for the
achievement.
A n a l y z e e n v i r o n m e n t a l s e t u p r e l a t i n g t o s m a l l i n d u s t r y a n d s m a l l busines
s.
Select product
Unders t and t he p roc ess and proc edure i n vol ved i n set t i ng up an sm al l enterprise.
Know the sources of help and support available for starting a small scaleindustry.
• Long-term objectives: The ultimate objective is that the trained individuals successfully
establish their own business and they should be equipped with all the required skills to run their
business smoothly.
The overall objectives of EDP are mainly to help in the rapid growth of the economy by supplying
skilled entrepreneurs. This programme primarily aims at providing self-employment to the young
generation.
Roles of EDP
An Entrepreneurship Development Programme primarily plays four roles to help an individual to
become an entrepreneur. They are:
• Stimulatory Role: It aims at influencing people in large number to be the entrepreneur. This
includes:
1. developing managerial, technical, financial, and marketing skill
2. inculcating personality traits
3. promotes and reforms entrepreneurial behavior and values
4. identifying a potential entrepreneur applying scientific methods
5. motivational training and building a proper attitude
6. strengthening the motive of a person and giving recognition
7. the valuable know-how of the local products and the processes help in the selection of
products, preparation of project reports
• Sustaining Role: It aims at providing an effective safeguard to businesses to sustain against the
cut-throat market competition. This includes:
1. help in modernization, expansion, and diversification
2. additional financing for further development
3. Global Networking Opportunities
4. creating new marketing processes
5. helping access to improved services and co-working centers
• Socio-economic Role: It aims at upgrading the socio-economic status of the public and includes:
1. identifying entrepreneurial qualities in practicality
2. creating employment opportunities in micro, small, and medium industries on an immediate
basis
3. arresting concentration of industries by supporting regional development in a balanced manner
4. focusing on the equal distribution of income and wealth of the nation
5. channelizing the latent resources for building an enterprise
Program Structure
Phase 1: Starting your startup hypothesis:
Idea Validation Workshop
• Introduction
• Stating your startup problem/hypothesis
• Understating Scenarios
• Idea feasibility analysis
• Idea Validation
• Closing pitches
Business Model Canvas Part 1
• Introduction
• Case Study
• Understating the nine blocks
• Visualizing your startup idea
• Developing your model
• Case Study
Phase 2: Testing your startup hypothesis:
Value proposition Design
• Introduction
• Creating a product/offering that sells
• Understating Customers
• Creating better values
• Creative disruption
• Case Study
Persona Development
Customer Empathy Map
• Introduction
• Creating customer personas
Customer Journey
• Introduction
• Understanding pain points
• Understanding gain creators
• Understanding pain relievers
• Empathy Mapping
• Drafting
• Introduction
• A day in the life of customers
• Visualization
Phase 3: Evaluating your startup environment:
Blue ocean strategy
• Introduction
• Scanning the environment
• Competition analysis
• Four action frame work
• Buyer utility map
• Strategy Canvas
Business Model Canvas Part 2
• Introduction
• Industry Forces
• SWOT analysis
• Business model environment
• Testing the nine blocks
• Drafting
Prototyping
• Introduction
• Understanding MVP
• Product Design
• Service Design
• Market testing
• Development
Phase 4: Legals and government support:
Company Registration
• Introduction
• Types of legal entities
• Making the choice
• Paper Work and Costs
Intellectual Property Rights
• Introduction
• Indian IPR Law
• Types of IPR
Government Policies
Marketing Metrics
• Introduction
• Startup India Program
• Standup India Program
• MSME's
• Introduction
• Get, Keep, Grow Cycles
• Web Platform Strategies
• Physical Platform Strategies
Filing For Patent
• Introduction
• Forms required
• Costs Involved
Investor Engagement
• How to tell your story
• Metrics that matter
• Art of negotiations
Industrial policy can be defined as a statement stating the role of government in industrial
development, the position of public and private sectors in industrialization of the country, the
comparative role of large and small industries.
In short, it is a proclamation of objectives to be achieved in the fields of industrial development
and the steps to be taken for achieving these objectives. So, the industrial policy formally
represents the spheres of activity of the public and private sectors.
Objectives
It enlists the rules and procedures that will monitor the growth and pattern of industrial activity.
The industrial policy is neither fixed nor flexible. It is constructed, modified and further
modification is done according to the changing situations, requirements and perspectives of
developments.
The major objectives of industrial policy are discussed below.
Rapid Industrial Development
The industrial policy of the Government of India focuses at increasing the level of industrial
development. It explores ways to construct favorable investment environment for the private sector
and also for mobilizing resources for the investment in public sector. In this way, the government
roots to promote rapid industrial growth in the country.
Balanced industrial Structure
The industrial policy is crafted to correct the prevailing downgraded industrial structure. Say for
example, India had some fairly developed consumer products industries before independence but
the capital goods sector was not at all developed, also basic and heavy industries were by and large
absent.
Thus, industrial policy had to be enclosed in such a way that imbalances in the industrial structure
are corrected by laying stress on heavy industries and development of capital goods sector.
Industrial policy explores methods to maintain balance in industrial structure.
Prevention of Concentration of Economic Power
The industrial policy explores to facilitate a borderline of rules, regulations and reservation of
spheres of activities for the public and private sectors. This is targeted at minimizing the
dominating symptoms and preventing focus of economic power in the hands of a few big industrial
houses.
Balanced Regional Growth
Industrial policy also targets at correcting differences of region in industrial development. It is a
well-known fact that some regions in our country are quite developed industrially, like
Maharashtra and Gujarat, while others are marked as industrially backward regions, like Bihar and
Orissa. It is the job of industrial policy to amend some programs and policies, which will result in
the development of industries or industrial growth.
The first industrial policy statement of the Government of India was formed in 1948 and was
modified in 1956 in industrial development policy dominated by the public sector till 1991 with
some minor modifications and amendments in 1977 and 1980.The year 1991 noticed far reaching
changes that were made in the 1956 industrial policy. The new Industrial Policy of July 1991
witnessed the border outline for industrial development at present.
In April 1956, the Indian Parliament adopted Industrial Policy Resolution of 1956 (IPR 1956). It
is marked as the first comprehensive documented statement on It systematizes three different
groups of clearly defined industries.
The policy of 1956 regulated to design the basic economic policy for a very long time. The Five-
Year Plans of India confirmed this fact. With respect to this Resolution, the establishment of a
socialistic pattern of society was seen through the objective of the social and economic policy in
India. It ensured more powers to the governmental authorities.
Companies were grouped into categories. These categories were −
• Schedule A − Those companies which were considered as an exclusive responsibility of the
state or the society.
• Schedule B − Companies which were marked as progressively state-owned and in which
the state would basically establish new companies, but in which private companies would
be anticipated only to supplement the effort of the state.
• Schedule C − The left companies and their future development would, in general, be
neglected and would be entirely dependent to the initiative and enterprise of the private
sector.
Even though there was a category of companies left to the private sector that is those companies
that are above Schedule C. The sector was monitored by the state by a system of licenses. So to
set up a new company or to widen production, obtaining a license from the government was a
prerequisite to be fulfilled. Launching of new companies in economically backward areas was
incentivized through easy licensing and subsidization of important inputs, like electricity and
water. This step was taken to encounter regional differences that existed in the country. In fact, the
license to boost the production was issued by convincing the government that the
Policy Measures
Some of the essential policy measures were declared and procedural simplifications were
undertaken to opt for the above stated objectives. Following are some of the policy measures −
Liberalization of Industrial Licensing Policy
A list of goods demanding compulsory licensing is reviewed on an ongoing regular basis.
Currently, only six industries are monitored under compulsory licensing mainly on account of
environmental, safety and strategic considerations that need to be taken care of. In the same way,
there are only three industries reserved specifically for the public sector. The lists of goods under
compulsory licensing and industries reserved for the public sector are included in Appendix III
and IV respectively.
Introduction of Industrial Entrepreneurs' Memorandum (IEM)
Companies which don’t require compulsory licensing are expected to file an Industrial
Entrepreneurs' Memorandum (IEM) to the Secretariat for Industrial Assistance (SIA). Industrial
approval is not needed for these types of exempted industries. Amendments are also permitted to
IEM proposals filed after 1.7.1998.
Liberalization of the Locational Policy
A crucially reformed locational policy in tune with the liberalized licensing policy is in place.
Approval from industries are not required from the Government for locations not within the range
of 25 kms of the periphery of cities having a population of more than one million apart for those
industries, where industrial licensing is compulsory. Non-polluting enterprises like electronics,
computer software and printing can be located within 25 kms of the periphery of cities with more
than one million population. Other industries are allowed in such locations only if they are located
in an industrial area so designated prior to 25.7.91. Zoning and follow land use regulations as well
as environmental legislations.
Policy for Small Scale Industries
Reservation of goods that are manufactured exclusively for small scale industries ensures effective
measure for protecting this sector. Since 24th December 1999, entrepreneurial undertakings with
a maximum investment up to rupees one crore are within the small scale and ancillary sector.
Non-Resident Indians Scheme
The general policy and provisions for Foreign Direct Investment as available to foreign investors
or company are completely applicable for NRIs as well. With addition to this, the government has
broadened some concessions mostly for NRIs and overseas corporate bodies having more than
60% stake by the NRIs. These include investment by NRI/OCB in the real estate and housing
sectors, domestic airlines sector up to 100%.They are also permitted to invest up to 100% equity
on non-repatriation basis in all activities except for a small negative list.
EHTP vs STP Scheme
For constructing strong electronics company along with a view to modify export, two
schemes viz. Electronic Hardware Technology Park (EHTP) and Software Technology Park (STP)
are in function. Under EHTP/STP scheme, the inputs are permitted to be procured free of duties.
Policy for Foreign Direct Investment (FDI)
Promotion of FDI forms a vital part of India's economic policies. The role of FDI in boosting
economic growth is by way of infusion of capital, technology and modern management activities.
The Department has put in place a liberal and transparent foreign investment egime where all the
practices are opened to foreign investment
International Business:
International management refers to the management of operations in an organisation that serves
different markets and operates in more than one country. International business requires
knowledge that goes beyond regular business expectations.
There will be demand in positions like international marketing, global procurement and
supply chain management, international finance, and international human resource
management. Therefore, Indian and international companies are expecting an increase in the
supply of international business professionals.
The international market is ever-changing due to the many factors that affect it
such as operational structures and environmental conditions. With the advent of
technology, the world seems smaller and more accessible; the economy today is
globalised and corporations are getting more foreign acquisitions and transactions
than any time before. As such, employers are continually looking for skilled
employees who have the expertise to handle such transactions.
Global trade is becoming a specialisation of its own. The global business world is
expanding and evolving with each passing day. If you are keen to work across
boundaries, it is vital that you understand and study business within a global
context. An exposure to global business management helps them gain a wider
understanding of different cultures, markets, and businesses. Most importantly, it
allows students to understand how globalisation has made the world more
connected. All these key points make students with an understanding of
international business education more attractive to potential employers.