Business Environment =>

Business Environment =>

What are they?

Principal elements of a business organization’s environment

Macroenviroment

Microenvironment

1. Internal environment

2. External environment

Types of Business Environment1. Internal environment => all functions

within a firm

2. External environment => all forces and events outside organization affect on its activitiesMacro environment: not immediately affect

firm’s activitiesMicro environment: directly affect the firm’s

activities

Principal elements of a business organization’s environment

Macroenviroment

Microenvironment

Internal environment

Political/ legalEconomicTechnologicalSocial/ cultural

CustomersSuppliersCompetitorsIntermediariesOther stakeholders

Marketing, Production, Finance, Personnel, R&D

Why Business Environment is important? If the firm failed to respond to change in

the environment , it might affect on declining in its profitability, business failure, loss of jobs, and a low standard of living and quality of life.

On the other hand, it could be an opportunity for the firm to succeed in which it always adjust itself with the current business trends and environment.

Economic & Legal keep taxes and regulations to a minimum allow private ownership of businesses minimize interference with the free exchange

of goods and services passing laws that enable businesspeople to

write contracts that are enforceable in court establish a currency that’s tradable in world

markets minimize corruption

Starting a business in some countries is much harder than in others. In India, for example, a person has to go through an extraordinary and time-consuming bureaucratic process to get permission to start a business—and with no certainty of success. Nonetheless, those businesses that do get started can become a major source of wealth and employment. This jewelry business is one small example.

Technological Environment Technology means everything from

phones and copiers to computers, medical imaging devices, personal digital assistants, and the various software programs that make business processes more effective, efficient, and productive

Important Terms

Effectiveness means producing the desired result.

Efficiency means producing goods and services using the least amount of resources.

Productivity is the amount of output you generate given the amount of input (e.g., hours worked) The more firm can produce in any given period of time, the more money firm can get

Technological Environment (Cond’t) Emerging of Internet The Growth of E-Commerce

E-Commerce: The buying and selling of goods and services over the Internet.

Technological Environment (Cond’t) Database: An electronic storage file

where information is kept; one use of databases is to store vast amounts of

information about consumers. The company can use those info. send you catalogs and other direct mail advertising that offers the kind of products you might want, as indicated by your past purchases

Technological Environment (Cond’t) Identity theft: The obtaining of private

information about a person, such as Social Security number and/or credit card number, and using that information for illegal purposes, such as buying things with it.

Amazon.com Must Change with the Times

Amazon.com by Jeff Bezos struggled since 1995 to prove its viability to its investors

After its success, many competitors arose, many traditional retailers starts their online service to compete

Bezos, therefore, encounter those by expanding the company’s offerings i.e. free shipping for minimum order of $99, then$ 49, and ended up at $25

Overtime, amazon.com is now offering wide range of products from automobiles and baby items to video games and watches.

•EBay is an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. In addition to its original U.S. website, eBay has established localized websites in thirty other countries. It is one of the big winners in the fight for Internet attention.

Q&A What Internet sites are your favorites?

Do you think that buying items over theInternet is going to greatly affect the shopping malls in your area?/ How?

HOW COMPETITION HASCHANGED BUSINESS

TRADITIONAL BUSINESSES

Customer satisfaction Customer orientation

Profit orientation Reactive ethics Product orientation Managerial focus

WORLD-CLASS BUSINESSES

Delighting the customer Customer and stakeholder

orientation Profit and social orientation Proactive ethics Quality and service

orientation Customer focus

Important Terms

Proactive = doing the right thing before anyone tells you to do it

Reactive = responding to criticism after it happens

How to survive in competitive environment? Adjust the firm’s products, policies, and

practices to meet consumer demands Restructure organization and do the

empowerment to meet the changing needs of customers and employees

Empowerment:Giving frontline workers the responsibility,authority, and freedom to respond quickly to customer requests

Social

Demography: The statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.

Why demography is important to the business?

Social Trends Today Managing diversity-> company tends to

search more of diverse workforce Increasing number of older people->

successful businesses like travel, medicine, nursing homes, adult day care, home health care businesses

Two-income families->pregnancy benefits, parental leave, flexible working schedule, child/ elder care counseling programs

Single parents-> family leave, flextime

Example: 4 day work week In Birmingham, Alabama, city officials

decided to implement a four-day week starting July 1 for some 2,400 municipal employees and later in the year for around 1,000 police and firefighters.

allowing employees to work four 10-hour days, may save 500,000 to one million dollars annually in fuel costs alone for the employees

4 day work week

The biggest motivation was to give employees a cost savings due to high gasoline prices. Also it will also give parents an extra day with their children and save on day care costs

http://www.today.com/external.php?url=http://news.sawf.org/Lifestyle/51090.aspx&reffurl=http://www.today.com/view/energy-surge-prompts-move-to-4-day-work-week-in-us/id-2131856/

Global

War and terrorism-> security costs and policies

How global changes affect you?

MH17 Malaysia plane crash in Ukraine

Ebola virus