Introduction to Business Environment.pptx

Business Environment Introduction.

1. Business Environment Analysis (Introduction) Presenter: Aakash Karki MBA Finance

2. Business Environment Analysis (BEA) BEA = Where, B = All ongoing business. E = Environmental factors affecting the business. A = Analyzing the environmental factors through continuous & systematic monitoring. Business environment refers to the set of factors which have profound impact on the different aspect of business and the systematic and periodic assessment of these environmental factors with a view to develop effective plan, policies and strategies in unique way is the analysis of BE.   2 16-Sep-24 Business Environment Analysis

3. Significance/Importance of BE: Equation: 3 16-Sep-24 Business Environment Analysis

4. S = [f{OE + MP + DS} EA] Let the equation be in the form of: Y = [ f{X 1 + X 2 + X 3 } X] Value of X 1 , X 2 , X 3 lies from 0 to 10 and X lies from 0 to 5 When X 1 = 8, X 2 = 8, X 3 = 7 and X = 3 , then Y = 69. Therefore, the chance of success is 69% Similarly, when X is changed to 4, then Y = 92. Therefore, the chance of success if 92% So, success of business depends on Environmental Analysis. EA   4 16-Sep-24 Business Environment Analysis

5. 5 16-Sep-24 Business Environment Analysis For b etter Adaptability: Adaptability is the key for survival of business. BE analysis help in adapting the changes in business environment. For eg : Many business during covid-19 adapted to the online system. Early Capitalization of Opportunities: Opportunities is ample in Business Environment but systematic assessment of those opportunities can be done through the BE analysis. So, BE analysis help in capitalization of the opportunities. Radar Effect: Early threats detection and its minimization. Prevention of losses, damages, possible threats. Example: Airport holding planes through radar signals, similar is for the businesses as well.

6. 6 16-Sep-24 Business Environment Analysis First Mover Advantage: BE analysis helps in analyzing upcoming trends, opportunities and sense the direction of change. Eventually, helps to grab the opportunities at first For eg : IMS software, Apple IPhone. Minimize risk/uncertainty: Possible risk and uncertainties can be identified & minimized using BE analysis. For eg : Hedging used for reducing financial risk. For Strategic management practice: Every strategic management plans, visions, mission, decision needs to have BE analysis. So, BE analysis is important for making every plans and decisions.

7. Features of BE: BE is the sum of all factors, conditions, circumstances, which have profound impact on business. BE is Dynamic and complex BE is very volatile and changes in fast pace, due to which it has become more complex. So, understanding BE is a very difficult task for managers. BE is Unpredictable How, when, where & what changes will be in future, nothing can be predicted. Change happens but the type of change cannot be predicted. BE brings opportunities and threats. Magnitude of Impact BE change frequently but some business might have huge impact while others have low impact. Managers must have the knowledge regarding the impact. Symbiotic relation between Business and Environment Symbiotic means “one influencing other”. Business try to influence operating environment by throwing different strategy. 7 16-Sep-24 Business Environment Analysis

8. BE System System is the set of interrelated and interdependent parts operating in environment . Thus, business firm is also a system. 8 16-Sep-24 Business Environment Analysis Input Process Impact Output Outcome Feedback Environment Environment Fig: BE System

9. Classification of BE: Internal Factors : Within the boundary of organization. Specific Factors : Lies immediately outside the organization General Factors : General for all. 9 16-Sep-24 Business Environment Analysis Specific Factors Internal Factors General Factors Fig: Classification of BE

10. Internal Factors: Factors within the boundary of organization. Factors without which business cannot operate It determines strength and weakness of the organization. Vision, goals and objectives. Financial Resources Human Capital Organization Structure. Organization Culture 10 16-Sep-24 Business Environment Analysis

11. Thank You!!!! 11 16-Sep-24 Business Environment Analysis