COMPONENTS OF BUSINESS ENVIRONMENT.pptx

business environment

1. Components of business environment

2. Components/dimensions

3. Economic Environment Economic environment includes Gross Domestic Product, Per capita level and Income level at the national level, Profit earning rate, Employment and Productivity rate, Monetary and Fiscal policy of the government. It includes various aspects like:  Balance of Trade Role of the private and public sector. Money supply in the economy. Balance of payment. Rate of saving and investment. Transport and communication system. Rate of growth of GNP, GDP, Per Capita Income. International debt.

4. Social Environment Social environment includes customs and traditions of the society in which business is existing. It includes the taste and preference, standard of living, and education criteria of the people living in a society where the business exists. This environment is very helpful for the success of any business in the long run. It includes various aspects such as: Tradition, customs, and habits of people. Importance or place of women in the workforce. Birth and death rates. Quality of life. Population. Education and literacy rates. Consumption habits. An attitude of consumers towards lifestyle.

5. Political Environment Political environment includes all the factors which are related to government affairs like the attitude of the government, power of government towards different sectors of societies, policy changes implemented by different governments, etc. The political environment creates a great impact on the business transactions so businessman must control this environment very easily and carefully. It includes various aspects such as: Constitution of the country. Present political system. Values and ideology of political parties. Government intervention in business. The foreign policy of the government.

6. Legal Environment The legal environment represents laws and various legislations passed in the parliament. The businesses cannot overlook the legislations because he has to do his business transactions within the face of a legal environment. The common legislation passed which has affected the legal transactions like Weights and measures act, essential commodity act, etc. It includes various aspects such as: Statutory warnings were important to be printed on the label. Legal policies related to licensing. Various laws and legislative acts. Laws to keep a check on advertisements. Foreign exchange regulation and management act.

7. Technological Environment Technological environment means to changes taking place in the use of new equipment, method of production, and machines to improve the quality of the product. Technological changes always help to improve the quality of a product and bring more benefits to customers. It includes various aspects such as: Technological advances in computers. Various innovations and Inventions. Scientific improvements. Developments in IT sector. Import and export of technology.

8. Fall down Story of NOKIA that ignores alarms in changing business environment