Business Environment - micro and macro level
- 1. BUSINESS ENVIRONMENT, MICRO & MACRO ENVIRONMENT
- 2. Introduction The term Business Environment is composed of two words ‘Business’ and ‘Environment’. In simple terms, the state in which a person remains busy is known as business. On the other hand, the word ‘Environment’ refers to the aspects of surroundings. Business operates in Unique Environment and cannot function in isolation. Business is like open systems which continuously interacts with environment i.e. Business enterprises exist in and are surrounded by an ‘environment’ called as the business or organisational environment.
- 3. CONTENT Objective of business Importance of business environment Business influenced by......... Characteristics of business environment Types of environment Swot analysis diagram External environment Micro environment Macro environment Conclusion
- 4. Objective of Business Purpose of Business is to create Customers or Markets which in turn caters to society Business is society organ of economic expansion, growth, and change Profitability Productive Efficiency Growth Technological Dynamism Stability Self Reliance Survival Competitive Strength Customer Service Financial Solvency Product Quality Diversification Employee Satisfaction and Welfare
- 5. Importance of Business Environment Business environment is complicated and active in nature and has a far-reaching impact on the survival and growth of the business. Determining Opportunities and Threats Giving Direction for Growth Continuous Learning Image Building Meeting Competition Identifying Firm’s Strength and Weakness
- 6. Business Influenced by......... Business decisions are influenced by two sets of factors Internal factors (The Internal Environment) External Factors( The External Environment) Business Environment presents two challenges to the enterprise The challenge to combat the environmental threats Exploit the business opportunities Environmental Analysis is one of the first steps in Strategic Management
- 7. Characteristics of business environment ENVIRONMENT IS COMPLEX Easier to understand in parts Difficult to understand in totality ENVIRONMENT IS DYNAMIC Constantly changing in shape and structure ENVIRONMENT IS MULTIFACETED Depends on perception of observer New development may be opportunity for one and threat for other ENVIRONMENT HAS FAR REACHING IMPACT Growth and profitability depends on organizational environment
- 10. External environment Environment that has an indirect influence on the business. The factors are uncontrollable by the business. MA CRO ENV IRO NM ENT • Demographic • Economic • Government • Legal • Political • Cultural • Technological • Global MIC RO ENV IRO NM ENT • Consumer / Customer • Competitors • Organization • Market • Suppliers • Intermediaries • Publics
- 11. Micro Environment Also known as task environment and operating environment It includes Consumers / Customers Competitors Organization Market Suppliers Intermediaries More intimately linked with the company than macro factors The micro forces need not necessarily affect all the firms in a particular industry in the same way. Some of the micro factors are particular to a firm.
- 12. Macro Environment Consists of larger societal forces that affect all the actors in company’s micro environment-namely : Demographic Economic Political - Legal Socio – Cultural Technological Natural Global Also known as Societal Environment – It includes general forces that do not directly touch on short-run activities of the organization but that can, and often do, influence its long-run decisions.
- 13. Conclusion Business environment have a great impact on the working of business. It may also lead to its failure of success. The factor affecting may be internal or external it needs to be analyzed timely so that measures can be taken and any type of lose or resentment among interested parties is prevented.