BUSINESS ENVIRONMENT
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Understanding the Business Environment: External and Internal Factors, Lecture notes of Management Theory
An overview of the business environment, discussing the relationship between a business and its surroundings, the factors that make up the business environment, and the importance of assessing this environment for business strategy. Topics include the dynamic and unpredictable nature of the business environment, the difference between micro and macro environments, and the internal and external factors that influence a business.
Typology: Lecture notes
2018/2019
1 / 14
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BUSINESS ENVIRONMENT
BUSINESS ENVIRONMENT
- (^) Business Environment is a relationship between a business’s actions and its environment.
- (^) Environment is the surroundings of a business by which business influenced directly or indirectly.
- (^) Where the political, economic, social and technological factors shopping a business environment are assessed by a business so as to devise future strategy.
Business Environment
- (^) include customers, competitors, suppliers, government, and the social, political, legal and technological factors etc.
- (^) some of these factors or forces may have direct influence over the business firm, others may operate indirectly.
Features of Business Environment
- (^) Business environment is the sum total of all factors external to the business firm
- (^) The business environment is dynamic in nature
Importance of business environment
- (^) Identifying opportunities
- (^) Firms to identify threats and early warning signals
- (^) Continuous learning:
- (^) Image building
- (^) Meeting competition
- (^) To ensure optimum utilization of resources.
- (^) Identifying firms strengths and weaknesses.
Internal Environment
- (^) The internal factors are generally regarded as controllable factors because the company has control over these because the company has central over these factors; it can alter or modify such factors as its personnel, physical facilities, organization and functional means, such as marketing mix to suit the environment.
Components of Internal Environment (^) Human Resources (^) Company Image and Brand Equity (^) Other Factors (^) Physical Assets and Facilities (^) R & D and Technological Capabilities (^) Marketing Resources (^) Financial Resources