THE FIRM AND

ITS
ENVIRONMENT

Mirjam Nilsson​
 OBJECTIVES:
At the end of the chapter, the learner be able to:
• Identify the various forces/elements of the firm’s environment and
summarize these forces using the SWOT analysis;
• Describe the local and international business environment of the firm
• Explain the role of business in relation to the economy
• Discuss the different phases of economic development , and
differentiate the various forms of business organizations.
​
 3

Lesson 1
ENVIRONMENTAL FORCES AND
ENVIRONMENTAL SACANNING
Definition of Terms:
• Environmental Scanning- seeking for and sorting through data about the environment.
• Business Environment- refers to the factors or elements affecting a business organization.

Business environment divided into 2:

• External Business Environment- refers to the factors/elements outside the organization
which may affect either positively or negatively, the performance of the organization.
Example: changes in taste and fashion.
• Internal Business Environment- refers to the factors/elements within the organization which
may affect either positively or negatively, the performance of the organization.
Example: the organization’s culture, product development , mission and strategy.
 4

Lesson 1
ENVIRONMENTAL FORCES AND
ENVIRONMENTAL SACANNING
Definition of Terms:
• Inflation: a period of above normal general price increases, as reflected in the consumer and
wholesale price indexes.
• Interest rates- the total amount that a borrower must pay annually to the lender and above the
total amount borrowed.
• Changing options- the consumers change in preference of goods and services offered.
• People’s changing habits- consumer’s changing ways of spending their money on goods and
services.
• Economic situations- includes inflation rates of interest, people’s spending habits, changing
options, etc.
COMPONENTS OF THE EXTERNAL BUSINESS ENVIRONMENT:GENERAL AND
SPECIFIC
General Business Environment includes the following:
• Economic situations
• Sociocultural situations- includes the customers’ changing values and preferences; customs
could also affect management practices in companies.
Example: Filipino customers are now conscious about the the importance
of avoiding fatty foods.
• Politico-legal situations- refer to national or local laws, international laws and rules and
regulations that influence organizational management.
• Demographic situations- such as gender, age, education level, income, number of family
members, geographic origin, etc. may also influence some managerial decisions in
organizations.
• The technological situations of companies involve the use of varied types of electronic gadgets
and advance technology.
• World and ecological situations- are related to the increasing number of global competitors and
markets as well as the nature and conditions of the changing natural environment.
 SPICIFIC BUSINESS ENVIRONMENT FOCUSES ON:
• Stakeholders –are parties likely to be affected by the activities of the
organization.
• Customers- are those who patronize the organization’s products and
services.
• Suppliers – are those who ensure the organization’s continuous flow of
needed and reasonably priced inputs or materials required for
producing their goods and
rendering their services.
• Pressure groups- are special-interest groups that try to exert influence
on the organization’s decisions or actions.
• Employees- are comprised of those who work for another or for an
employer in exchange of salaries/wages or other considerations.
 COMPONENTS OF THE INTERNAL BUSINESS ENVIRONMENT
• It is composed of its resources, research and development, production,
procurement of supplies and the products and services it offers.
• The organization’s internal environment must also be subjected to
internal analysis
• SWOT- Strengths, weaknesses, opportunities, threats
• Business prediction/ business forecasting-is a method of predicting
how variables in the environment will alter the future of business.
• Benchmarking – is defined as the process of measuring or comparing
one’s own products, services, and practices with those of the
recognized industry leaders in order to identify areas for improvement.
 COMPONENTS OF THE INTERNAL BUSINESS ENVIRONMENT
• It is composed of its resources, research and development, production,
procurement of supplies and the products and services it offers.
• The organization’s internal environment must also be subjected to
internal analysis
• SWOT- Strengths, weaknesses, opportunities, threats
• Business prediction/ business forecasting-is a method of predicting
how variables in the environment will alter the future of business.
• Benchmarking – is defined as the process of measuring or comparing
one’s own products, services, and practices with those of the
recognized industry leaders in order to identify areas for improvement.
 LESSON 2:

THE LOCAL AND INTERNATIONAL

BUSINESS ENVIRONMENT OF THE FIRM

Understanding the local and international business environment of the

firm requires managers of organizations to sharpen their cultural
intelligence.​
Cultural Intelligence- is an individual’s ability to favorably receive
and adjust to an unfamiliar way of doing things.
 DEFINITION OF TERMS
• Inflation rate- rate reflected during a period of above normal
general price increases.
• Gross National Product (GNP)- total domestic and foreign
output claimed by the residents of a country.
• Gross Domestic Product (GDP)- total final output of goods
and services produced by the country’s economy, within the
country’s territory.
• Currency exchange product- the rate at which central banks
will exchange the country’s currency for another.
 DEFINITION OF TERMS
• EDWARD T. HALL- Anthropologist- noted that the way
people approach and deal with time varies across cultures.
• Monochronic cultures-refer to cultures wherein people tend to
Presentation title 12

QUARTERLY PERFORMANCE
2.0
Q1 2.4
4.3

2.0
Q2 4.4
2.5

3.0
Q3 1.8
3.5

5.0
Q4 2.8
4.5

- 1.0 2.0 3.0 4.0 5.0 6.0

Series 1 Series 2 Series 3

Presentation title 13

AREAS OF GROWTH

B2B Supply chain ROI E-commerce

Q1 4.5 2.3 1.7 5.0

Q2 3.2 5.1 4.4 3.0

Q3 2.1 1.7 2.5 2.8

Q4 4.5 2.2 1.7 7.0

 14

“ BUSINESS OPPORTUNITIES ARE

LIKE BUSES. THERE'S ALWAYS

”
ANOTHER ONE COMING.
Richard Branson
Presentation title 15

MEET OUR TEAM

TAKUMA HAYASHI MIRJAM NILSSON FLORA BERGGREN​ RAJESH SANTOSHI​

President Chief Executive Officer Chief Operations Officer VP Marketing
 16

MEET OUR EXTENDED TEAM

TAKUMA HAYASHI MIRJAM NILSSON FLORA BERGGREN​ RAJESH SANTOSHI​

President Chief Executive Officer Chief Operations Officer VP Marketing

GRAHAM BARNES ROWAN MURPHY ELIZABETH MOORE ROBIN KLINE

VP Product SEO Strategist Product Designer Content Developer
Presentation title 17

PLAN FOR PRODUCT LAUNCH 

PLANNING MARKETING DESIGN STRATEGY LAUNCH

Deploy strategic
Disseminate Foster holistically
Synergize scalable Coordinate e- networks with
standardized superior
e-commerce business applications compelling e-
metrics methodologies
business needs
 18

TIMELINE

SEP 20XX NOV 20XX JAN 20XX MAR 20XX MAY 20XX

Synergize scalable Disseminate standardized Coordinate e- Foster holistically Deploy strategic

e-commerce business applications superior methodologies networks with
metrics compelling e-
business needs
 19

AREAS OF FOCUS
B2B MARKET SCENARIOS CLOUD-BASED OPPORTUNITIES

• Develop winning strategies to keep ahead • Iterative approaches to corporate strategy

of the competition • Establish a management framework from
• Capitalize on low-hanging fruit to identify the inside
a ballpark value
• Visualize customer directed convergence
Presentation title
HOW WE GET THERE
ROI
• Envision multimedia-based
expertise and cross-media
growth strategies
• Visualize quality intellectual
capital
• Engage worldwide
methodologies with web-
enabled technologies
NICHE MARKETS
• Pursue scalable customer
service through sustainable
strategies
• Engage top-line web
services with cutting-edge
deliverables
20
SUPPLY CHAINS
• Cultivate one-to-one
customer service with robust
ideas
• Maximize timely
deliverables for real-time
schemas
Presentation title 21

SUMMARY
At Contoso, we believe in giving 110%. By using our next-generation
data architecture, we help organizations virtually manage agile workflows.
We thrive because of our market knowledge and great team behind our
product. As our CEO says, "Efficiencies will come from proactively
transforming how we do business."
THANK YOU
Mirjam Nilsson​
mirjam@contoso.com
www.contoso.com