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    BE Intro

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    Neha Gupta
    This document discusses the business environment and its internal and external factors. The internal environment includes factors within a company's control like management, resources, and operations. The external environment includes micro factors close to the company like customers, competitors and suppliers, and macro factors in the broader economy, society, politics, and environment. It also discusses Porter's five forces model of competition and how the intensity of competition is determined by factors like threat of new entry and substitution, bargaining power of buyers and suppliers, and rivalry among existing competitors.

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    BE Intro

    Uploaded by

    Neha Gupta
    26 views16 pages
    This document discusses the business environment and its internal and external factors. The internal environment includes factors within a company's control like management, resources, and operations. The external environment includes micro factors close to the company like customers, competitors and suppliers, and macro factors in the broader economy, society, politics, and environment. It also discusses Porter's five forces model of competition and how the intensity of competition is determined by factors like threat of new entry and substitution, bargaining power of buyers and suppliers, and rivalry among existing competitors.

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    This document discusses the business environment and its internal and external factors. The internal environment includes factors within a company's control like management, resources, and operations. The external environment includes micro factors close to the company like customers, competitors and suppliers, and macro factors in the broader economy, society, politics, and environment. It also discusses Porter's five forces model of competition and how the intensity of competition is determined by factors like threat of new entry and substitution, bargaining power of buyers and suppliers, and rivalry among existing competitors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    26 views16 pages

    BE Intro

    Uploaded by

    Neha Gupta
    This document discusses the business environment and its internal and external factors. The internal environment includes factors within a company's control like management, resources, and operations. The external environment includes micro factors close to the company like customers, competitors and suppliers, and macro factors in the broader economy, society, politics, and environment. It also discusses Porter's five forces model of competition and how the intensity of competition is determined by factors like threat of new entry and substitution, bargaining power of buyers and suppliers, and rivalry among existing competitors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    You are on page 1of 16

    Business Environment

    Business –Organised efforts of enterprises to supply


    to consumers –(Goods & for attaining the objective
    services)
    -profits & power
    -sales maximization(Growth)
    -welfare(Employee satisfaction & Development
    -utility (quality products /joy)
    -social(Non-profit)service
    Environment-Surrounding-Reference to
    Business –Forces /Factors with an impact on business

    -Threats, opportunities
    -Socio-Economic B
    -Technological u
    -Political & Govt. s
    -Competition i
    -Access to resources n
    -Supply e
    -Natural s
    -Global s

    Business - Environment Accountability


    Decisions
    Types of Environment (Firm/Business)

    Internal External

    Micro Macro

    Internal Environment
    -Value system
    Choice
    Mission and objectives
    policies
    Practices
    -Pricing
    -Costing
    -Receipts to company
    -Supply chain
    -Raw material Input
    ---Management Structure and Nature
    -Organization
    -Comparison of Board of Directors
    -Share holdings
    ---Human Resource
    -Skill,morale,Commitment,etc
    -Quality
    -Restructuring5
    ---Company Image and Brand Equity
    -Marketing
    -Joint ventures/alliances
    -Contact management
    ---Others.
    -Assets
    -Efficiency
    -Just in Time
    -Time lead
    -R & D and Technology
    -Marketing Resources
    -Sales
    -Network
    -Branding
    -Product mix
    -Marketing mix
    ---Financial factors
    -Policies
    -Position
    -Capital Budgeting
    -Working capital
    ---Internal power relationship
    Top management-middle management—share holders

    Employee
    External Environment
    ---Micro Environment (task & Operating Environment)
    --Suppliers (supply)
    Materials
    Inputs
    Components

    --Customers (Demand)
    -Segment
    -Behaviour
    --Financiers
    --Competitors
    -Generic Competition (Educational Aids)
    (Satisfy a particular category)
    --Brand Competition (players)
    -Same product-different brands
    --Marketing Intermediaries
    (Aid Company).
    Company Customer
    Link/Chain
    -Promotion
    -Selling
    -Distribution
    -Transportation
    -Ware housing
    -Service
    -Financial intermediaries
    -Research
    Macro Environment-(General/remote environment)

    -Global factors- Globalization, (LPG)


    (SEZs, WTO,Crude oil, war) etc
    -Economic factors,
    GDP, Inflation, Growth & Devpt.
    Trade cycles, Industries, etc
    -Demographic factors
    Age, Birth rate, Death rate, etc literacy ,poverty
    -Social/Cultural factors employment, women & child etc,
    water, sanitation, religion
    -Political /Govt-laws, judiciary (control business)
    -Natural factors
    Technological factors
    -Technology
    -Scientific application
    Structural Determinants of Intensity of Competition
    Competition works to drive down rate of return on invested
    capital
    Major Competitive forces (Porters)
    1.Entry

    2.Threat of substitution

    3.Bargaining power of buyers.

    4. Bargaining power of suppliers

    5.Rivalry among competitors

    1-5---------- intensity of Compt.


    1.Threat to Entry (Barriers reduce threat)
    (1)Economies of scale
    (2)Product differentiation
    (3)Capital requirements
    (4)Switching costs
    (5)Access to distribution channels
    (6)Specific cost disadvantages
    Proprietary/patents
    Raw materials quota
    Favourable location
    Govt. subsidies
    Experience
    (7)Govt.Policies
    (8)Entry deterring price
    2. Substitute products impacts---elasticity of demand

    3.Rivalry amongst competitors (interacting structural


    factors)
    (1)Numerous/Equally balanced competitors
    (2)Slow in industry growth.
    Turns Compt. into mkt. share game-Turns Volatile
    (3)differentiation is minimum/Max
    (4)Diverse Competitors-specially MNC make it difficult
    (5)High strategic stakes
    4.Bargaining power of Buyers
    (1)Conc.purchase.
    (2)low profits
    (3)products its purchases are standard or undifferentiated

    5.Mkt.Structure & Compt.Strategy


    (1)Positioning,-Focuses on SWOT
    (2)Exploiting Exchange
    (3)Diversification
    Competitive Structure
    Structural Analysis of Industries
    Potential Entrants

    Threat of New entrants

    Suppliers Industry Competitors Buyers

    Bargaining
    Power of Buyers
    Bargaining power

    (Rivalry Among Existing firms)

    (Threat of substitute products

    Substitute
    Forces Driving Industry Competition
    Structural Analysis within Industries
    Based on Five forces ,Entry, Bargain power of Buyers &
    suppliers, rivalry & substitution,
    Cos. strategy for competing within Industry
    1.Specialization-target customer ,Market segment
    2.Brand Identification –Add, sales force
    3.Channel selection-Distribution channel & outlet.
    4.Product quality
    5.Technological leadership
    6.Cost position
    7.Service
    8.Pricing policy.

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