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BUSINESS ENVIRONMENT

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BUSINESS ENVIRONMENT- CONCEPT, MEANING, DEFINITION, FEATURES, NATURE, IMPORTANCE, SIGNIFICANCE.
DIMENSIONS OF BUSINESS ENVIRONMENT- POLITICAL, ECONOMICAL, SOCIAL, TECHNOLOGICAL, LEGAL.
NEW ECONOMIC/INDUSTRIAL POLICY- LIBERALISATION, PRIVATISATION, GLOBALISATION
IMPACT OF NEW ECONOMIC/INDUSTRIAL POLICY ON BUSINESS & INDUSTRY

BUSINESS ENVIRONMENT- CONCEPT, MEANING, DEFINITION, FEATURES, NATURE, IMPORTANCE, SIGNIFICANCE.
DIMENSIONS OF BUSINESS ENVIRONMENT- POLITICAL, ECONOMICAL, SOCIAL, TECHNOLOGICAL, LEGAL.
NEW ECONOMIC/INDUSTRIAL POLICY- LIBERALISATION, PRIVATISATION, GLOBALISATION
IMPACT OF NEW ECONOMIC/INDUSTRIAL POLICY ON BUSINESS & INDUSTRY

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BUSINESS ENVIRONMENT

  1. 1. 1 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA)
  2. 2. 2 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Means the external forces influencing the business decisions •In the form of economic, social, political and technological factors and •Are outside the control of the business.
  3. 3. 3 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Relativity External forces Dynamic Nature Uncertainty Complexity Element of Inter-relatedness Specific And Forces General
  4. 4. 4 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Differs from country to country and even region to region. • Political conditions in the Gujarat is different from Kashmir
  5. 5. 5 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Sum total of all things external to business firms And aggregative in nature brings both threats and opportunities Bajaj auto has stop manufacturing scooter and concentrating on motor cycle Threat Opportunity Demand for scooter is falling Demand for Bykes is increasing
  6. 6. 6 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Keeps on changing due to  Technological improvement Consumer preferences (use of facebook)  Entry of new competition in the market.
  7. 7. 7 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Difficult to predict future happenings, particularly when environment changes are taking place too frequently
  8. 8. 8 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Environment is easier to understand in parts but difficult to understand as a whole Example Easier to understand the fall in demand but difficult to explains the reasons for fall. •Change in customer taste •Increase in competition •Increase in price of the product.
  9. 9. 9 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Different forces of business environment are closely interrelated. Health awareness has increased the demand for Gyms Low Calorie Food Products
  10. 10. 10 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Specific forces (such as investors, customers, suppliers) affect individual enterprises directly. •General forces (such as social, political, legal and technological conditions) impact indirectly.
  11. 11. 11 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Recognize Opportunities To Get The First Mover Advantage Assist In image building Coping With Rapid Changes Early Warning Signals And Threats Resources utilization Support In Planning And Policy Formulation
  12. 12. 12 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Early identification of opportunities helps an enterprise to compete it with competitors
  13. 13. 13 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Company can build positive image by understanding people problems and resolving them.
  14. 14. 14 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •All sizes and all types of enterprises are facing increasingly dynamic environment. • To manage with changes, managers examine the environment and develop suitable plan. Increasing traffic in Delhi led to develop METRO
  15. 15. 15 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Indian firm can compete foreign firms by improving • The quality of the product •Reducing cost of the production, •Engaging in aggressive advertising Tata motors is competing with domestic as well foreign competitors in the Indian market
  16. 16. 16 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Environment brings both opportunities and threats for a business enterprise. Its understanding can convert threats into opportunities. Bajaj auto has stop manufacturing scooter and concentrating on motor cycle Threat Opportunity Demand for scooter is falling Demand for Bikes is increasing
  17. 17. 17 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Environment provides various resources for running a business. Like Finance Man-power Firms must get these resources to grow
  18. 18. 18 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Legal Environment Political Environment Economic Environment Social Environment Technological Environment
  19. 19. 19 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Consists of legislation passed by the parliament and state legislatures. •Knowledge of rules and regulations Is Necessary for better business performance. examples Consumer protection Act 1986
  20. 20. 20 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Consist of political stability and the policies of the government. •Stable govt. create confidence among business people to invest in the long term projects` Gujarat has established itself as best state of India because of political support.
  21. 21. 21 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Includes society in which the business works. Literacy rate, customs values, beliefs, lifestyle. Health awareness has increased the demand for Gyms Low Calorie Food Products
  22. 22. 22 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) • Consists of economic factors that influence the business in a country. •Include gross national product, corporate profits, inflation rate, employment, Interest rates affect demand for
  23. 23. 23 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Includes Forces Relating To Scientific Improvements And Innovations •Provide New Ways And Techniques Of Producing Goods And Services Of Doing A Business
  24. 24. 24 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Legal Environment Political Environment Economic Environment Social Environment Technological Environment
  25. 25. 25 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) India at the time of independence
  26. 26. 26 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Goal Was •Rapid economic growth to raise the standard of living. •Reduce unemployment and poverty. •Become self-reliant •Reduce inequalities of income and wealth. •Adopt a socialist pattern of development.
  27. 27. 27 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) But in 1991
  28. 28. 28 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) By Dr. Manmohan sigh Financial minsiter(then)
  29. 29. 29 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Economic policy includes Liberalization Privatization Globalization
  30. 30. 30 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Liberate industry from the chains of the licensing system Reduce the role of the public sector Encouraging foreign private participation in india’s industrial development
  31. 31. 31 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Freedom in fixing the prices of goods and services. Abolishing licensing requirement in most of the industries. Reduction in tax rates and lifting of unnecessary controls over the economy. Making easier to attract foreign capital and technology to India. Simplifying procedures for imports and experts
  32. 32. 32 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Giving greater role to the private sector and a reduced role to the public sector. To improve the efficiency of PSUs by giving them autonomy Transferring the public sector enterprises to the private sector by disinvestment
  33. 33. 33 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Mixing of the economy of the country with the world economy. Creation of networks and activities to go beyond economic, social and geographical boundaries. Increased level of interaction and interdependence among the various nations of the global economy
  34. 34. 34 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA)
  35. 35. 35 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Threat from MNC Reduction of budgetary support to the public sector Increasing competition More demanding customers Market orientation Essential for change Rapidly changing technological environment
  36. 36. 36 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Huge entry of multi nationals in Indian marker brings new challenge to Indian industries to compete with them
  37. 37. 37 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •The central government’s budgetary support for financing the public sector has decline •To survive and grow, PSU’s will have to more efficient and generate their own resources
  38. 38. 38 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •New industrial licensing and entry of foreign firms •Has increase competition for Indian firms •In service industries like telecommunications, airlines, banking etc.
  39. 39. 39 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) • With awareness and increased competition in the market •Customers have wider choice in purchasing •Better quality of goods and services and competitive prices Fixed Land Line Replaced By
  40. 40. 40 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) •Earlier firms used to produce first and go to the market for sale later. •Now firms have to study and analyze the market first and produce goods according to customer needs
  41. 41. 41 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) After 1991, the business firms have become confused and have to continuously modify their operations. HUL catorgised the Indian customer on the basis of income. Example Affluent Aspiring Striving
  42. 42. 42 .Mr.CharakRay. ASST.PROFESSOR(FINANCE) MBA(BHU),ASSOCIATE((III),PGDHI(III) BCM(BHSE),SENIOR(ST.JA) Companies are making huge investment in research and development to grow faster •Companies like Set up with an investment of Rs. 184 Cr.The new 200,000 square-foot facility R&D centre in Hyderabad, to respond even more quickly to changing customer needs across the world

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