Business

Business is an integral part of the ecology and social system Organized efforts of and by enterprises to supply consumers with

goods and services to the consumers for a profit.

It varies in size and is measured in terms of number of employees or

by sales (turnover) volume.

Its decisions and performance are influenced by a host of diverse

factors.
The purpose of business goes beyond just earning profit.

Business Environment
BE consists of all the factors that have a bearing on the

business

Strengths of a business Weaknesses Relationships (external and internal) Orientation of the organization Government policies and regulations Nature of economy Economic conditions Socio-cultural conditions Demographics Global trends and developments

Business Objectives
Vision: A broad explanation of why the firm exists and where

is it trying to lead

It seeks to answer the following questions

Where do we go from here? What changes lies ahead in the business landscape? What differences will these changes make to the companys

present business?
The vision gives the organization a sense of purpose and a set

of values that unite employees in a common density.

Contd
Mission: Outlines the fundamental purpose of the organisation. Vision statement: Where do we go from here? Then, Mission statement: What is our business? It gives a unique identity to the organisation and builds a path for

development. Four elements Customer needs, or what is being satisfied Customer groups, or who is being satisfied The companys activities, technologies, and competencies or how the firm goes about creating and delivering value to the customer and satisfying their needs. The companys concern for survival, its philosophy, its self-concept and its concern for public image. Mission statements are more specific than vision statements.

Business Goals
Profit
Growth Power

Employee Satisfaction and Development

Quality products and services Market leadership

Service to society

Types of Environment
Internal Factors: generally regarded as controllable factors because these are under the control of the management.
Personnel, Physical facilities etc.

External factors: Ones that are not under the direct control of the management. These are the environmental factors
Economic factors, socio-cultural factors, regulatory

framework, demographic factors.

Internal Factors
Value system
Vision, Mission and Objectives Management Structure Internal bonding/relationship Human resources Physical assets and facilities like production capacity,

technology and efficiency of productive. R&D and technology capabilities Financial policies and capital structure etc. Marketing resources and efficiency.

External Factors
Micro Environment

The factors that affect the companys performance immediately Suppliers: supply the inputs like raw materials and components to

the company. Customer: A major task of a business is to create and sustain customers Competitors: May market the same or similar product and compete for the pocket share of the consumers. Marketing Intermediaries: Act as a link between the company and the final consumers. Labour: One of the most important dimension of any business. Public: Any group that has an actual or potential interest in or impact on an organisations ability to achieve its interest.

Macro Environment
Global Environment
Increasing opportunities as world has become one market Improving quality Competition from MNCs Capital and technology transfers Deciding which markets to enter and how to enter Adjusting management processes

India and WTO

Contd
Technological Environment
Technology reaches people through business.

Increased productivity
Need to spend on R&D Fast changing technology

Rise and decline of products and organisations

High expectations of consumers Problem of techno structure System complexity Increased regulation and stiff opposition Demand for capital Social changes

Contd
Economic Environment
Growth strategy Economic system Industry Agriculture Infrastructure Money and capital markets

Per capita and national income

Population New economic policy

Contd
Political Environment
Role of legislature Role of executive Role of judiciary Constitution of India New directions for government role

Contd
Social-Cultural Environment
Culture creates people Culture and globalisation Determines goods and services Determines peoples attitude to business and work Caste system Spirit of collectivism and individualisation Education Family and marriage

Scientific spirit
Ethics in business Social responsibility

Corporate governance

Contd
Natural Environment
Manufacturing depends on physical inputs Mining and drilling depends upon natural deposits

Agriculture depends on nature

Trade between two regions depend upon the

geographical factors Transport and communication depend on geographical factors

Contd
Demographic Environment
Population in terms of number or decline/growth over a

period Composition in terms of age, gender, household size etc. Economic strata Caste, religion, political affiliations Educational status etc.

Environment Analysis
Scanning: Involves general surveillance of all environmental

factors and their in order to Identify early signals of possible environmental change Detect environmental change already under way

It is ambiguous environmental analysis activity. The relevant data for scanning are unlimited but scattered,

vague and imprecise

Contd
Monitoring: Involves tracking the environmental trends The purpose is to assemble sufficient data to discern whether

certain trends and patterns are emerging. Therefore, in this case the data turns frequently from imprecise to precise.
Three outcomes of monitoring:
A specific description of environmental trends and patterns

to be forecast Identification of trends for further monitoring Identification areas for further scanning

Contd
Forecasting: It is concerned with developing plausible

projections of the directions, scope and intensity of environmental change.

Aims at laying out and evolutionary path of anticipated change.
Unlike, scanning and monitoring, it is more deductive and

complex activity

Contd
Assessment: Required to determine implications for

organisations current and potential strategies.

Involves identifying and evaluating how and why current and

projected environmental changes affect or will affect strategic management of the organisation.
It tries to answer questions such as What are the key issues presented by the environment? What are the implications of such issues?

E-Commerce
Electronic commerce, commonly known as e-commerce, is the

buying and selling of product or service over electronic systems such as the Internet and other computer networks.
Modern electronic commerce typically uses the World Wide Web at

least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.
The World Wide Web (WWW), is a system of interlinked hypertext

documents accessed via the Internet. With a web browser, one can view web pages that may contain text, images, videos, and other multimedia, and navigate between them via hyperlinks.

Contd
E-commerce can be divided into:
E-tailing or "virtual storefronts" on Web sites with

online catalogs, sometimes gathered into a "virtual mall" The gathering and use of demographic data through Web contacts and social media Electronic Data Interchange (EDI), the business-tobusiness exchange of data E-mail and fax and their use as media for reaching prospects and established customers (for example, with catalogues, Newsletters) Business-to-Business buying and selling The security of business transactions

Objectives of E-Commerce
Developing and enhancing business
Increasing the customer base Offering better customer service

Convenience

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