1. A
Presentation
ON
BUSINESS ENVIROMENT
2016 – 18
FACULTY OF MANAGEMENT
Pacific Academy of Higher Education and Research University,
Udaipur
Guided By: Submitted By:Himanshu panchal
Dr.PALLAVI MEHTA
2. CONTENTS
Introduction of Environment
Defination of Environment
Characteristics of Environment
Types of Environment
Internal Environment
Macro Environment
Micro Environment
Environmental Analysis
Forecasting
Benefit of Environmental Analysis
Limitation of Environmental Analysis
3. INTRODUCTION
Every business operates in an environment and a business
unit has its own environment. A chance in environment
provides opportunities to some and threat to other . The
environment is complex ,dynamic,multifaceted and has a
far reaching impact. The impact of an environment trend
often differs significantly for different firms within the
same industry. The general environment usually holds both
opportunities for, and threat to, expansion. Development in
the genera environment changes competitive battle line, and
many development in the general environment are difficult
to predict with any degree of accuracy, while other are
readily predictable.
4. DEFINATION
Environment literally means the surroundings,
external objective, influences or circumstance under
which someone or something exists.
According to Jauch and Gluecke “The environment
includes factor outsides the firm which can lead to
opportunities or a threat to the firm . Although there
are many factors, the most important of these sectors
are socio-economic, technological, supplier
,competitor and the government”
Environment refer to all external forces that have a
bearing on the functioning of a business
5. Characteristics
1. Environment is Complex
2. Environment is Dynamic
3. Environment is multi-faceted
4. It has a far-reaching impact
5. Its impact on different firms with in the same industry
differs
6. It may be an opportunity as well as a threat to
expansion
7. Change in the environment can change the competitive
scenario
8. Sometimes development are difficult to predict with
any degree of accuracy
6. Types of Environment
The types of environment can be divided into three broad
categories
Types of
Environment
Internal
Environment
Macro
Environment
Micro
Environment
7. Internal Environment
1. Couture and Value System: Organization culture can be viewed as
the system of shared values and beliefs that shape a company’s
behavioral norms. A value is an enduring preference as a modal of
conduct or an end state. Value and culture are inherited from senior by
juniors in a organization.
2. Mission and Objective: The mission and objective of the company
guide the priorities, direction of development, business philosophy,
and business policy.
3. Management Structure and Natures: Structure is the manner in
which the tasks and sub-tasks of the organization are related. Structure
is concerned with the hierarchical relationship and the relationship
between the management of different functional areas like the structure
of the top management and the pattern of share holding.
4. Human Resource: It concern with factor like manpower planning,
recruitment and selection, compensation, communication and
appraisal.
8. Macro Environment
Study of the entire economy in the term of the
total amount of goods & services produced,
total income earned, level of employment of
productive resource & general behavior of
price.
10. Micro Environment
Micro environment or the competitive environment refers to the
environment which an organization faces in its specific arena. This arena
may be an industry, or it may be what is referred to as a strategic group.
The five forces of competition:-
1. Threat of competitor:-The rivalry among sellers in the industry.
2. Threat of New Entrants:- The potential entry of new competitors.
3. Threat of substitution :- Market attempts of companies in other
industries to win customer over to their own substitute.
4. Bargaining Power of suppliers:- The competitive pressure stemming
from the supplies-seller collaboration and resultant bargaining.
5. Bargaining Power of Buyers:-The competitive pressure stemming
from seller –buyer collaboration and bargaining.
11. Environmental analysis
Collection of information:-Analysis is done by means of search
of verbal and written information, spying, forecasting and formal
studies and information system.
The source of verbal information are:-
1. Media such as radio and television.
2. The firm’s employees such as peers, subordinate and
supervisors.
Other sources of verbal information outside the firm are:-
Customer of the enterprise, persons in industry channel ( such as
wholesalers, brokers, distributors, etc.), suppliers doing business
with the firm, competitors and their employees, financial
executive such as bankers, stockholder and stock analysis,
consultance and the government.
12. Forecasting
Techniques of environmental forecasting:-
1. Scenario planning
2. Issue analysis
3. Export Opinion
4. Delphi Method
5. Market Experiments
6. Survey
7. Time Series Analysis
8. Trend Projection
13. Benefits of Environmental Analysis
1. Environment analysis gives an idea of organization’s
environment.
2. Environment analysis gives a brief about competitors.
3. Environment analysis tells us about opportunities to reap
profits.
4. Environment analysis gives details about threats in the
environment.
5. Environment analysis keeps the manager informed and alert.
6. Business is all making the right decision at the right
time.Without proper environment analysis, the right decision
can’t be made.
7. Environment analysis helps in predicting the future.
8. Environment analysis helps in suitable modification of
strategies. As and when required.
14. LIMITATION OF
ENVIRONMENT ANALYSIS
1. Today the environmental is turbulent and dynamic
and it is difficult to forecast or predict the
environmental.
2. Business environmental is global and any development
in any part of world can influence the business. Even a
small political move can have drastic impact, which is
very difficult to scan assess.
3. The Effectiveness of environmental analysis depend
upon how it is practiced, i.e., whether it is a systematic
approach, ad hoc or processed.
