INTRODUCTION TO BUSINESS

ENVIRONMENT

PRESENTERS: GROUP A
1. GINITA GARANJA MAGAR

2. MANISHA TWANABASU

3. PALLAWI UPRETI

4. PRATISHA MAHARJAN

5. RAKSHYA KOIRALA
 BUSINESS ENVIRONMENT

 Total surroundings having direct/indirect bearing on functioning

of the business.

 External environment- uncontrollable nature

 Internal environment- controllable to some extent.

 Changing needs of customers and new innovation in technology

 CHARACTERISTICS

 Dynamic

 Uncertainty in situation, experiences & factors

 Complex

 Unpredictability
 Long term impact

 Change may be small but impact maybe long lasting

 Multifaceted

 Same environment but reactions and situations may be different

 IMPORTANCE

 Indentify business opportunities and threats

 Basis of decision making

 Resource allocation

 Deal with changes

 Planning & goal achievement

 Profit earning

 Lower loss occurrence

 COMPONENTS

INTERNAL ENVIRONMENT

Organizational
goals
Plans and Organizational
Policies structure

Plant and Organizational

Machinery culture

Corporate Image Employees

 EXTERNAL ENVIRONMENT

Micro Environment

Customers

Competitors Creditors

Union groups Suppliers

Media Government
 Macro Environment

Political

Environmental Economic

Technological Social

Legal
 PESTLE FACTORS

PESTLE stands for:

 Political: stability of government, potential changes to
legislation, global influence
 Economic: economic growth, employment rates, monetary

policy, consumer confidence

 Social: economic distribution, demographic influence, lifestyle

factors
 PESTLE FACTORS

Technological: international influences, changes in information

technology, take up rates

Legal: taxation policies, employment laws, industry regulations,

health and safety

Environmental: regulations and restrictions, attitudes of customers

ENVIRONMENT THREAT OPPORTUNITY PROFILE (ETOP) ANALYSIS

Technique to structure the environment for fundamental business

analysis

Developed by Glueck

It is external environment analysis technique

Helps organization to find threats or opportunity

Helps in formulating appropriate strategy

 INTERNAL ENVIRONMENT

Environment which specially focuses on the internal

forces including

 Organization Culture

 Mission Strategy and

 Product Development.
 COMPONENTS OF INTERNAL
ENVIRONMENT

1. Physical Assets and Facilities

2. Research and Development

3. Marketing Resources

4. Financial Resources
 PORTERS FIVE FORCES MODEL

A tool that analyzes the five competitive forces of the

organizations determining the strength and

weakness .

Identifies the actual long term profitability,

understanding the competitors and soon.

 SWOT ANALYSIS

Framework for identifying and analyzing an organization's

 Strengths

Weakness

Opportunities

Threats
1) Strength 2) Weakness

Strengths are internal, •Weaknesses are negative

positive attributes of our factors that detract from our

company. strengths.
Things that are within our
•Things that we might need to

control.
improve on to be competitive
 4) Threats
3) Opportunities
Include external factors beyond

External factors in your your control that could place the

strategy, or the business itself, at

business environment that
risk.

are likely to contribute to No control over these, but may

benefit by having contingency plans

your success
to address them if they should

occur.
 CONTEMPORARY ICI ( INNOVATION,
CREATIVITY AND IDEAS)
Innovation
Creativity
• Process of taking creative

• Use of imagination to create ideas and exploiting their

benefit for success.
ideas.
• Creation of an innovator.
• Think outside the box.
• Application of creative ideas.

• Creation of something • Can be physical object,

concept of improve or create

unique and original.
new process.
WHY IS ICI IMPORTANT?
WHY IS ICI IMPORTANT IN

BUSINESS?