Business Environment

Group Members: Baken Dhungyel (031902)

Bishnu Maya Sanyasi (031903)
Tashi Dorji (031918)
Wangchuk (031920)
Auditing Environmental Influences
Environmental auditing is essentially an environmental
management tool for measuring the effects of certain
activities on the environment against set criteria or
standards.
For the impact of industries and their product on
natural resources and environmental quality it is
necessary to have “Environmental Audit’ to ensure
sustainable industrial development.
Economic factors and restructuring
Various economic factors need to be taken into account
when determining the current and expected future
value of a business or investment portfolio.
Key economic factors: 1. Labour costs,
2. Interest rates,
3. Government policy,
4. Taxes, and duities
Capital Market
Capital market is a market where buyers and sellers
engage in trade of financial securities like Shares,
Bonds and other long-term investments.
An organization should take into consideration the cost
of capital, allocation of resources and merger and
acquisition.
Demographic and Socio-Cultural
A demographic environment is a set of
demographic factors such as gender or ethnicity.
Companies use demographic environments to identify
target markets for specific products or services. Some
demographic factors include: Age. Gender.
Socio-cultural includes religion, language, values and
attitude, believes, education and social groups.
Sociocultural factors are customs, lifestyles and values
that characterize a society.
Technology
Technological environment refers to the state of science
and technology in the country and related aspects such as
rate of technological progress, institutional arrangements
for development and application of new technology, etc.

Ideal product - outdated technology

Hence, it is important for business leaders to understand

the importance of the technology to excel in achieving
their goals and objectives.
Labor market,Competition,Government
and supplies
Labor market: Place where workers and employees
interact with each other.
Competition: Rivalry among sellers trying to achieve
such goals as increasing profits, market shares and
sales volume.
Government: Fiscal policies
Supplies: Number of suppliers and loyalty of the
supplier and the organization.
 Models of Strategic Analysis

Legal Political
Economic

PESTE

Environmental
L
Social
Technological
Political Factor
Government policies and stability
Fiscal and Taxation policies
Economic Factor
Interest rates
Unemployment rate
Cost of raw-materials
Foreign exchange rate
Disposable income
Trade tariff
Inflation rate
Local economic situation and trends
Social Factors
Ethical Issues
Education levels
Cultural trends
Attitude changes
Change in lifestyle
Technological Factors
Technological Development
Research and Development
Information Technology (IT)
Communication
Consumer Preferences
Environmental Factors
Ecological
Environmental Issues (National & International)
Waste disposal and sustainability
Recycling procedures
Legal Factors
Employment Law
Consumer Law
Environmental Regulations
Competitive Regulation
Health and Safety
Strengths
The advantage the organization has and the unique
selling proposition.
Location
Brand Name
Patient
Finance
Technology
Location
Professional Workforce
Weaknesses
Factors which ultimately lose your organization’s sales
Out-dated technology
Shortage of Finance
Weak Control System
Weak Brand Name
Unskilled Labor Forces
Opportunities
Opportunities which are open to the organization. Tax
holidays
Tax exemption
Less Competitors
E-commerce
Free Trade
Some of the opportunities will come via organization’s
strength.
Threats
Environment that can adversely affect its performance
or achievement of its goals.
New and existing regulations
New and existing competitors
New Technology that may make our product obsolete
Unstable political and Legal systems
Economic downturn
After identifying the Strengths, Weakness,
Opportunities and Threats we should;
 BUILD ON OUR STRENGTHS
 ADDRESS ON OUR WEAKNESS
 CONSIDER THE OPPORTUNITIES
 GUARD AGAINDT THREAT
/BCG Model
Strategic Group Analysis( the
growth/share matrix)
Strategic Group Analysis (SGA) aims to identify
organizations with similar strategic characteristics,
following similar strategies or competing on similar
bases. Such groups can usually be identified using two
or perhaps three sets of characteristics as the bases of
competition.
Helps in identifying who is the most direct competitors
and on what basis they compete.
Is also used to identify opportunities.
Help identify strategic problems.
Directional Policy Matrix
The Directional Policy Matrix (DPM) is a framework
which can be used to classify and categorise an
organization’s business activities in terms of its
strengths, capabilities or market position, and the way
it perceives markets to be attractive.
Critical Success Factor Analysis
Critical success factor is a management term for an
element that is necessary for an organization or project
to achieve its mission. Alternative terms are key result
area and key success factor.
Examples: Strong brand name, innovative product,
Tiered pricing, low cost manufacturing and high
Research and development.