BUSINESS ENVIRONMENT

Business environment concern of all the factors that have a hearing on the business .The
survival or success of the business depends upon two set of factors ie the internal factors
– the internal environment and external factors-external environment.

CHARACTERSTICS OF BUSINESS ENVIRONMENT

1. Related with economic activities:- Economic environment is related to economic

activities of a person or a firm .It include all the activities between his income and
expenditure.

2. Effected by non-economic environment:- Economic environment is influenced by

geographical ,social and political environment. It also affect the national &
international conditions.

3. Infrastructure:- Economic environment is influenced by the availability of

infrastructure facilities like electricity ,water ,power, transport & communication ,
banking & insurance etc.

4. Public approach:- If the concept of general public is ”eat drink and enjoy” it
develop the approach of to earn more and more money in the prevailing economic
environment.

5. Availability of capital:- Availability of sufficient capital lead to complete

utilization of available natural and human resources which finally helps to
increase in income ,employment ,investment and economic development.

INTERNAL ENVIRONMENT

1. Promoters
2. Mission
3. Management structure
4. Internal power relationship
5. Brand equity

EXTERNAL ENVIRONMENT

External environment are two types-

1. Micro environment
2. Macro environment
 MICRO ENVIRONMENT

Micro environment consist of the actor in the companies immediate environment that
affect the performance of the company. These include the suppliers, competitors,
customers & the public.

1. Customers:- The major task of a business is to create and sustain customers. A

business exists only there customer because of customer. A company may have
different categories like individuals, household, industries & other institution.

2. Suppliers:- Suppliers are those who supply input and other component to the
company. The importance of reliable source of supply to the smooth functioning
of the business.

3. Competitors:- A firm’s competitors include not only the other firms which market
the same or similar products but also all those who compete for the discretionary
income of the customers.

4. Publics:- A public is any group that has an actual or potential interest in

organization ability to achieve its interests. Eg media publics, citizens action
publics and local publics etc.

5. Financiers:- They provide finance to the company and also helps in non-financial
matters.

MACRO ENVIRONMENT

Macro environment consist of various environment factors which are beyond the control
of the firm namely demographic, economic, technological, political and socio-culture
factor.

1. Global or International environment:- Since our world has been transformed into
a single market place through privatization, liberalization and other revaluation in
communication and transportation etc.

2. National Environment:- The economic condition of a country like nature of

economy, stage of development of economy, level of national income,
distribution of income and assets are important determinant of national
environment.
3. Socio- culture environment:- The buying and consumptions habit of the people
their languages, customs & tradition, taste & preference, education etc are
constituent of socio economic environment.

4. Natural environment:- Natural environment is related with factors like land,

climate, weather condition, natural resources, topological factor are relevant to a
business.

5. Demographic environment:- Like age, income, family size, growth rate,

occupation, education, religion, nationality, languages, population etc.