PRESENTATION ON COMPONENTS OF ENVIRONMENT

Presented by: Sheenam Pasricha

SCANNING THE BUSINESS ENVIRONMENT

Definition: In the field of business it means- to carefully analyze the various factors influencing the business environmental scanning is not once and for all, rather it is a continuous process. As the business environment is continuously changing, management has to continuously analyze and diagnose the environment.

COMPONENTS OF ENVIRONMENT

1.Economic Environment
Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macroeconomic:

economic

conditions economic system

economic conditions

economic

policies economic growth economic system Interest rates economic policies Currency Exchange rates economic growth Unemployment Interest rates Inflation Currency Exchange rates economic system economic policies

LEGAL ENVIRONMENT
Unemployment law Health and Safety Product Safety

2.Political And Government Environment

Political-legal forces include the outcomes of elections, legislation, and court judgments, as well as the decisions rendered by various commissions and agencies. The political sector of the environment presents actual and potential restriction on the way an organization operates.

Some examples include: tax policy employment laws environmental regulations trade restrictions and tariffs political stability State budget deficit or surplus

Socio Cultural Environment

Social factors include the demographic and cultural aspects of the external microenvironment. These factors affect customer needs and the size of potential markets. Some social factors include: population growth rate

 ecology (e.g., global warming, pollution); demographics (e.g., population growth rates, aging work force in industrialized countries, high educational requirements); quality of life (e.g., education, safety, health care, standard of living); and noneconomic activities (e.g., charities).

Technological Environment
Technological forces influence organizations in several ways. A technological innovation can have a sudden and dramatic effect on the environment of a firm. First, technological developments can significantly alter the demand for an organization's or industry's products or services.

Marketing Innovation R & D activity Infrastructure Changes

Thanks