BUSINESS ENVIRONMENT

CHAPTER 1
INTRODUCTION TO BUSINESS ENVIRONMENT

ISSUES TO BE DISCUSSED
WHAT IS BUSINESS ENVIRONMENT? WHY DO WE STUDY BUSINESS ENVIRONMENT? WHAT DO WE STUDY IN BUSINESS ENVIRONMENT?

Introduction to Business Environment

WHAT IS BUSINESS? an organization that provides goods and services to others who want or need them. OBJECTIVES OF BUSINESS WINNING BIGGEST SHARE OF TOTAL MARKET INCREASING SALES SATISFYING CUSTOMERS MAKING PROFIT FOR SHAREHOLDERS

Introduction to Business Environment

WHAT IS ENVIRONMENT? Environment is surrounding atmosphere/ condition for existence WHAT IS BUSINESS ENVIRONMENT? is anything which surrounds the business organisation. It affects the decisions, strategies, processes and performance of the business.

Introduction to Business Environment

SUCCESS OF BUSINESS DEPENDS ON UNDERSTANDING

ITS INTERNAL STRENGHTS

VALUE SYSTEM MISSION & OBJECTIVES MANAGEMENT STR. & NATURE HUMAN RESOURCES COMPANY IMAGE & BRAND EQUITY R&D PHYSICAL ASSETS & FACILITIES MARKETING RESOURCES FINANCIAL FACTORS

EXTERNAL ENVIRONMENT
COMPETITORS ECONOMIC SYSTEM SOCIAL SYSTEM MONETARY SYSTEM POLITICAL /LEGAL SYSTEM ENVIRONMENTAL SYSTEM

Introduction to Business Environment

BUSINESS ENVIRONMENT

INTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT

MACRO ENVIRONMENT

MICRO ENVIRONMENT

Introduction to Business Environment

S W O T analysis
Strengths

Weaknesses

Opportunities

Threats

Introduction to Business Environment

P E S T (L E) analysis
Political Economic Socio Technological Legal Environmental

} }

Affects all organisations, not only your business and your competitors

Introduction to Business Environment

MICRO (TASK/ OPERATING) ENVIRONMENT

oSUPPLIERS oMARKETING INTERMEDIARIES oCOMPETITORS oCUSTOMERS oFINANCIERS oPUBLICS

Introduction to Business Environment

Porter's Five Forces Model

Potential entrants
Threat of new entrants Bargaining power of suppliers

Industry competitors
Rivalry among existing firms

Suppliers

Bargaining power of buyers

Buyers

Threat of substitutes

Substitute products
Introduction to Business Environment 10

Porter's five forces model

(

the five forces

3the 3the 3the 3the 3the

bargaining power of suppliers bargaining power of buyers threat of potential new entrants threat of substitutes extent of competitive rivalry

(factors

affecting each of the forces of the five forces model

Introduction to Business Environment 11

(limitations

Strategic Marketing Planning for a Supplier of Liquid Food Packaging Products in Cyprus
SITUATIONAL ANALYSIS INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT MACRO: POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL

PRODUCT PRICE PLACE PROMOTION PEOPLE PHYSICAL EVIDENCE PROCESS MGT. SALES PERFORMANCE PLC TARGETING POSITIONING

SWOT

MICRO: STR. OF MKT./COMPETITORS CONSUMER NEEDS TRENDS OF MKT. POWER FORCES STAKEHOLDERS

Introduction to Business Environment

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KEY TO THE GROWTH AND SUCCESSOF BUSINESS

Know the competitors; Collect details of companies such as performance, manufacturing technology, production statistics, import/export data, product distribution systems and marketing technique; Think globally in setting up industry; Take advantage of international capital; Maintain the quality of global standard; Adopt the latest technology to match world competition; Establish in-house R&D facilities;
Introduction to Business Environment 13

KEY TO THE GROWTH AND SUCCESS OF BUSINESS CONTD.

Adopt effective measures to cut costs; Become multinational by establishing plants in other countries; Search for low-technology manufacturing processes; Establish effective marketing and distribution systems; Adopt an export route for growth; Think of continuous improvements in all spheres of management activity; Look for future trends in the relevant industry. Business information Introduction to Business Environment

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