BUSINESS ENVIRONMENT : BUSINESS ENVIRONMENT An uncontrollable environment will negatively affect any organization's efforts whatever they might be. You need to have a heavily structured method and environment to process information into relevant bits for each department to produce results. Team environments are the backbone of any organization. Nothing can work without a collaborative effort on all departments. TYPES OF ENVIRONMENT : TYPES OF ENVIRONMENT (1) INTERNAL
(2) EXTERNAL INTERNAL BUSINESS ENVIRONMENT FACTORS : INTERNAL BUSINESS ENVIRONMENT FACTORS Management
Money. EUREKA FORBES : EUREKA FORBES Eureka Forbes followed the globally 'tried and tested' direct selling route for marketing its products in India, thus becoming one of the first direct selling companies in India. The company believed that its core strength was its people. EUREKA FORBES : EUREKA FORBES (1) Direct marketing of consumer appliances
(2) Importance of sales force
(3) Customer Relationship Management
(4) Advertising strategies in consumer
appliances industry EUREKA FORBES : EUREKA FORBES MANAGEMENT + WORKFORCE EUREKA FORBES : EUREKA FORBES 70% share in water purifier market AQUAGUARD.
80% share in vacuum cleaner market
EURO-CLEAN TYPES OF EXTERNAL ENVIRONMENT : TYPES OF EXTERNAL ENVIRONMENT Political forces
Level of technology
Geography and infrastructure
Cultural forces POLITICAL ENVIRONMENT : POLITICAL ENVIRONMENT The policies and attitudes towards business are a government idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government Political Environment Example : Political Environment Example A change in the government does not always mean change in the level of political risks. In Italy the political parties have changed 50 times since the end of World War II but the business continues to go on as usual inspite of the political turmoil. In comparison is India, where the government has changed 51 times since 1945 but however much of the government policies remain hostile to foreign investments CONTINUE : CONTINUE African countries are among the unstable with seemingly unending civil wars, boundary disputes and oppressive military regimes. Like one of the region with the greatest number of questions concerning long-term stability is Hong Kong as since China has gained control, the official message is that nothing will change and thus everything is seemingly going smoothly but the political analysts say that it is too early to say how will the business climate change. ECONOMIC ENVIRONMENT : ECONOMIC ENVIRONMENT Economic environment refers to the aggregate of the nature of economic system of the country, the economic policies of the government ,the organisation of the capital market, the nature of factor endowment, business cycles, the socio-economic infrastructure etc. The successful businessman visualizes the external factors affecting the business, and makes suitable to get the maximum with minimize cost. ECONOMIC ENVIRONMENT : ECONOMIC ENVIRONMENT Income distribution & discretionary income
Productivity: unit labour costs and labour compensation costs.
Relates to how much it costs in various regions for your competitors to manufacture stuff,
Major international debtors
Relates to the financial burden on gov't to tax citizens (trade surplus, trade deficit, bond debt)
Inflation, interest rates, availability of credit ECONOMIC STUDY : ECONOMIC STUDY Age distribution
Effects lifestyle things such as transportation, food consumption, entertainment, living accommodations
Young people = work force
Aging population - savers, and consumers of health care products
Education and literacy rates
Rural - urban population shifts LEGAL ENVIRONMENT : LEGAL ENVIRONMENT Legal environment includes flexibility and adaptability of law and other legal rules governing the business. It may include the exact rulings and decision of the courts. These affect the business and its managers to a great extent. EXAMPLE OF LEGAL ENVIRONMENT : EXAMPLE OF LEGAL ENVIRONMENT For Instance, in 1992, the Supreme Court ordered the closure of a number of tanneries in Kanpur as they were polluting Holi Ganga. In August 1993 several foundries around the famous Taj Mahal were ordered to be closed down because of air-pollution caused by them had adverse impact on the whiteness of Taj Mahal. TECHNICAL ENVIRONMENT : TECHNICAL ENVIRONMENT The business in a country is greatly influenced by the technological development. The technology adopted by the industries determines the type and quality of goods and services to be produced and the type and quality of plant and equipment to be used. Technological environment influences the business in terms of investment in technology, consistent application of technology and the effects of technology on markets. TECHNOLOGY LEADERS : TECHNOLOGY LEADERS JAPAN
CHINA COMPETITIVE FACTOR : COMPETITIVE FACTOR This refers to the ability of a country (or firm) to provide goods and services which provide better value than their rivals COMPETITIVE FACTORS : COMPETITIVE FACTORS Major advantage in price, marketing, innovation, or other factors.
Number and comparative capabilities of competitors
Competitive differences by country SOCIAL AND CULTURAL ENVIRONMENT : SOCIAL AND CULTURAL ENVIRONMENT The social environment of a nation determines the value system of the society. Sociological factors such as costs structure, customs and conventions, cultural heritage, view toward wealth and income and scientific methods, respect for seniority, mobility of labour etc. have far-reaching impact on the business. These factors determines the work culture and mobility of labour, work groups etc. CULTURAL PROBLEMS : CULTURAL PROBLEMS Lack of Communication
Values, belief systems, business ethics, business practices, behaviour, etiquette and expectations.
Company Culture Example of cultural environment : Example of cultural environment One classic culture aspect is food. Someone in America can be eating Japanese noodles for lunch while someone in Sydney, Australia is eating classic Italian meatballs. India is known for its curry and exotic spices. France is known for its cheeses. America is known for its burgers and fries. McDonalds is an American company which is now a global enterprise with 31,000 locations worldwide. This company is just one example of food causing cultural influence on the global scale GEOGRAPHICAL ENVIRONMENT : GEOGRAPHICAL ENVIRONMENT There are a number of Physical and environmental forces influencing and effecting Int'l business in Canada.
Geographical size and east-west spread of Canada
Topographical and climatic challenges
The "gifts" of our natural resources GEOGRAPHICAL EXAMPLE : GEOGRAPHICAL EXAMPLE Geographical size and east-west spread of Canada
Distances to travel for work and leisure
Population density low outside of major urban centers CONTINUE : CONTINUE Topographical, "Latitude" and climatic challenges
Many areas of Canada not suitable to living all year round
Weather effects growing seasons for food
Cost of food effects health and lifestyles
Mountains act as barriers to transportation, communication, and limit habitable land space