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Analysis of Business Environment


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Analysis of environment for the vital changes that may impact our organizations is significant.

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Analysis of Business Environment

  1. 1. Analysis of Business Environment Dr. L. Mothilal, Assistant Professor, Department of Management Studies Pondicherry Central University, India Email:
  2. 2. Scanning the Environment
  3. 3. Analysis of Environment Scanning Monitoring Forecasting Assessment
  4. 4. Scan for Relevant Changes in Economic Environment Political and Legal Environment Socio-Cultural Environnent Technological Environment Global Environment
  5. 5. Assessing the Current and Future Environmental Changes Economic Political & Legal Socio- Cultural Technological & Global
  6. 6. Fad
  7. 7. Fad is short lived mushrooming of opportunity which is difficult to predict and forecast. Business profit from fad is pure matter of luck and chance. Source: environment.htm
  8. 8. Trend
  9. 9. Trend is something which takes time to build up compared to fad and has a predictable future. Trend is sometimes co- related with changes in social culture and economic situation. Source: environment.htm
  10. 10. Megatrend
  11. 11.  Megatrend is much slower in development and is associated with political, socio-economical, technology and regulatory changes.  Megatrends are estimated to last around half decade or more.  For companies trend and megatrend are of great importance because they present business opportunities to them. Source: environment.htm
  12. 12. This trend-spotting (scanning) activity can be undertaken by company itself or through market research. This activity can also be outsourced to companies, which specialize in analyzing current social and economic changes. Fitness and diet are trend, which witness growth across the globe.
  13. 13. Factors influencing the Business Environment Globalization is affecting the way companies are conducting their business. Communication and connectivity are reaching at a new level every day. New economic powers like India, China, Brazil and Russia are exerting their influence.
  14. 14. Monitoring
  15. 15. The Business Environment consists of a complex set of interacting forces and influences outside the Organization. The Business Environment affects the organization's ability to build and maintain mutually beneficial relationships with its target customers. Through continuous monitoring its Business Environment a company must be able to anticipate change and act in a proactive way rather than leaving it to a reactive reaction. It must also keep up to date by realizing. Source: marketing-environment-page1.html
  16. 16. Forecasting
  17. 17. Qualitative Quantitative Categories of Forecasting
  18. 18. Historic Revolutions
  19. 19. Historical Revolutions Black Revolution – Petroleum Production Blue Revolution – Fish Production Brown Revolution – Leather/non-conventional(India)/Cocoa production Golden Fibre Revolution – Jute Production Golden Revolution – Fruits/Overall Horticulture development/Honey Production Green Revolution – Food grains Grey Revolution – Fertilizer Pink Revolution – Onion production/Pharmaceutical (India) /Prawn production
  20. 20. Revolutions Continued… Red Revolution – Meat & Tomato Production Round Revolution – Potato Silver Fiber Revolution – Cotton Silver Revolution – Egg/Poultry Production White Revolution (In India: Operation Flood) – Milk/Dairy production Yellow Revolution – Oil Seeds production Evergreen Revolution – Overall development of Agriculture
  21. 21. Changes in Production Technology
  22. 22. Since Prometheus stole the fire of knowledge from right under the noses of the gods on Mount Olympus and bestowed it upon mankind, humans have not stopped fiddling with it and creating striking innovations all throughout their evolution Source:
  23. 23. THE FIRST INDUSTRIAL REVOLUTION – 1765 The first revolution spans from the end of the 18th century to the beginning of the 19th century Replaced agriculture with industry as the foundations of the economic structure of society Mass extraction of coal along with the invention of the steam engine created a new type of energy that thrusted forward all processes - Development of railroads and the acceleration of economic, human and material exchanges. Source:
  24. 24. THE SECOND INDUSTRIAL REVOLUTION – 1870 New technological advancements initiated the emergence of a new source of energy: electricity, gas & oil The development of the combustion engine set out to use these new resources to their full potential. Furthermore, the steel industry began to develop and grow alongside the exponential demands for steel Chemical synthesis also developed to bring us synthetic fabric, dyes and fertilizer. Methods of communication were also revolutionized with the invention of the telegraph and the telephone and so were transportation methods with the emergence of the automobile and the plane at the beginning of the 20th century Industrial model based on new “large factories” and the organizational models of production as envisioned by Taylor and Ford Source:
  25. 25. THE THIRD INDUSTRIAL REVOLUTION – 1969 A third industrial revolution appeared with the emergence of a new type of energy whose potential surpassed its predecessors: nuclear energy. This revolution witnessed the rise of electronics—with the transistor and microprocessor—but also the rise of telecommunications and computers. This new technology led to the production of miniaturized material which would open doors, most notably to space research and biotechnology. For industry, this revolution gave rise to the era of high-level automation in production thanks to two major inventions: automatons—programmable logic controllers (PLCs) - & Robots. Source:
  26. 26. The first industrial revolution used water and steam to mechanize production The second used electric energy to create mass production The third used electronics and information technology to automate production. Source:
  27. 27. Today a fourth industrial revolution is underway which builds upon the third revolution and the digital revolution that has been taking place since the middle of the last century. This fourth revolution with exponential expansion is characterized by merging technology that blurs the lines between the physical, digital and biological spheres to completely uproot industries all over the world. The extent and depth of these changes are a sign of transformations to entire production, management and governance systems. Fourth Industrial Revolution Source:
  28. 28. Its genesis is situated at the dawn of the third millennium with the emergence of the Internet. This is the first industrial revolution rooted in a new technological phenomenon—digitalization—rather than in the emergence of a new type of energy. This digitalization enables us to build a new virtual world from which we can steer the physical world. The industry of today and tomorrow aim to connect all production means to enable their interaction in real time. Factories 4.0 make communication among the different players and connected objects in a production line possible thanks to technology such as Cloud, Big Data Analytics and the Industrial Internet of Things (IIoT) Fourth Industrial Revolution contd… Source:
  29. 29. However, this fourth industrial revolution could be the first to deviate from the energy-greed trend—in terms of non-renewable resources—because we have been integrating more and more possibilities to power our production processes with alternative resources. Tomorrow, factories 4.0 will be embedded in smart cities and powered by wind, sun and geothermal energy. Within this context of profound technological and societal changes—because the two always go hand in hand during industrial revolutions—which is taking us towards global digitalization, industrial cybersecurity will become a leading sector Fourth Industrial Revolution contd… Source:
  30. 30. Change for Better…
  31. 31. Era of Turbulent Change In era of turbulent change, managing change & discontinuity is a key Issue
  32. 32. Era of Turbulent Change PDCA - PDCA P – Plan D – Development C – Check A – Act
  33. 33. Era of Turbulent Change Companies are operating in a war zone of rapidly changing Competitors Technology New Laws Trade Policies  Diminishing Customer Loyalty
  34. 34. Era of Turbulent Change “ It is not the strongest nor the most intelligent that will survive but the one who is the most responsive to the change” – Charles Darwin