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Introduction to Business Environment

>> September 5, 2010


Business environment may be defined as the set of external and internal factors which affects the decisions of business. We can divide business environment into two parts

A. The Micro Environment of Business

These are powers which are deeply related with company and company can control these type of environment by improving its capacity and efficiency.

1. Suppliers

Suppliers are the persons who supply raw material to company.

2. Customers

Customers are the persons who buy goods from company.

3. Market Intermediaries

Market intermediaries are those person who helps company to sell its products.

4. Financial Intermediaries

Financial intermediaries are those institutions who provide loan, credit and advance to company.

5. Competitors

Competitors are those who also sell same product of company.

6. Public

Public is those group of people who can buy or who can show their interest to buy the products of company.

B. The Macro Environment of Business

Macro environment of business means all external factors which affects company and its business and there is no control of company on these factors.

1. Economic Environment

In economic environment, we can include govt. budget, import and export policies, economic system and economic conditions.

2. Political and Governmental Environment

In political and government environment, we can include legislature's decisions, executive's decisions and judiciary decision which affect company's business.

3. Socio cultural Environment

Socio-cultural environment includes morality, religion, education, health of peoples and family importance.

4. Natural Environment

In natural environment, we can include season, place elements, natural resources etc.

5. Demographic Environment

In demographic environment, we can include size of population, growth rate of population, age composition, sex composition and family size.

6. Technological Environment

In technological environment, we can include ecommerce technology, online payment, Internet technology, mobile banking and 3G technology and all other new technology which affect company's business.

7. International Environment

In international environment, we can includes rules and regulation of WTO, WB and MNC's affect on our company's business.




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