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  Compiled and Edited by Dr.Pavnesh Kumar DBM-IGNTU Amarkantak(MP) Business Environment  MBA-First Semester IGNTU Introduction to Business Environment 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.  Compiled and Edited by Dr.Pavnesh Kumar DBM-IGNTU Amarkantak(MP) 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.  business environment Meaning of Business >> August 10, 2011 Business means all activities which generates wealth. In these activities, goods are produced or  purchased and then are sold on profits. Following are main features of business. 1. Objective of business is to earn profit.  Compiled and Edited by Dr.Pavnesh Kumar DBM-IGNTU Amarkantak(MP) 2. There are lots of risks in it. Following are main business objectives:   1. Economic objectives  a) To earn profit  b) To Grow the business c) Innovation of new products  2. Social objectives a) Service to society  b) Employee satisfaction and development c) Quality products and services d) Fair return to investors e) Good corporate citizenship Micro Environment of Business Micro environment of business becomes from internal part of company. This environment includes different factors which can be controlled by company. Following are the main factors of micro environment 1. Suppliers  These people supply the goods to company. We can control them, if we pay them on the time. We should also keep contacts with multiple sources because it is very less risky. If one supplier stops to supply us, we can get raw material from other supplier. 2. Customers  Customers also affect on company's business. If we do not care our customers, our customers will buy from other company. Due to this, our sale will decrease. We should make good relation with our customers. 3. Market Intermediaries  Middlemen, physical distribution firms and marketing service agencies are main market  Compiled and Edited by Dr.Pavnesh Kumar DBM-IGNTU Amarkantak(MP) intermediaries. We should choose best market intermediaries for fast distribution of our products. 4. Competitions Company also have to face competition. If company has to win competition, it has to sell good quality product at lower price. 5. Public Public is any group that has an actual or potential interest in or impact on an organisations ability to achieve its interests. Examples are a) Media  b) Citizen c) Local public If we have to make public happy, we have to protect our environment. We have to produce our  products in less polluted system. Macro Environment of Business Macro environment of business means that environment which can not be controlled by company. In this environment economic, social, political and technical environments are included. These environment powers affect not only our company or firm but these may affect whole industry. So, we can not stop of its affect. It means changing in this environment may be risky for our business. I can explain this in simple world. For example a MNC is doing his business from 30 years in India. It is generating high profit and providing high value to the peoples of India. It has controlled its micro environment. But Govt. now has changed and Govt. has issued order to stop the business of that MNC because it may decrease domestic business. So, it may be very risky. So, MNC's officers should have to prepare for this. If they study macro environment of business. They can also get good idea for protecting its risk. Introduction to Economic Environment We can introduce economic environment as all the factors which affect business due to changing the economic policies, economic system and economic conditions. In big companies, there may  be large number of economist whose work is to make economic policies and economic planning. They control the prices of product of company. They also control the production level and try to  best to reach it on optimum level. They monitor all external economic factors and to reduce company's economic weaknesses and risks.
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