Technological environment It includes the level of technology available in a country. Accordingly, companies should be able to address the prevailing and expected future legislations and to adjust their strategies and policies accordingly. Business environment is a dynamic concept and keeps on changing continuously. PESTLE analysis, which is sometimes referred as PEST analysis, is a concept in marketing principles. The prime objective of any business organization is to increase the profit by utilizing of limited resources. It can be used for other organizations such as governmental firms, other private organizations and also for individuals as well. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Thus, with the assistance of SWOT analysis the decision-makers can make vital decisions with regard to their future cause of actions properly. Improving performance: the enterprises that continuously monitor their environment and adopt suitable business practices are the ones which not only improve their present performance but also continue to succeed in the market for a longer period. firm to identify threats and early warning signals: If an Indian firm finds that a foreign multinational is entering the Indian market it should gives a warning signal and Indian firms can meet the threat by adopting by improving the quality of the product, reducing cost of the production, engaging in aggressive advertising, and so on. The success or failure of an organization is primarily established by the effectiveness of its interaction with its environment. Factors which constitute business environment are dynamic in nature. Factors which constitute business environment are uncertain. Thus, a happy workforce will be expected to deliver more fruitful results to the company. According to this, business exists for serving various members of society. According to this, business exists for serving various members of society. from environment and delivering the required goods and services. In SWOT analysis, the strengths and weaknesses are often identified as an internal to the organization, while the opportunities and threats generally relate to the external factors. Importance of Business Environment. Uncertainty: Business environment is largely uncertain as it is very difficult to predict future happenings, especially when environment changes are taking place too frequently as in the case of information technology or fashion industries. No plagiarism, guaranteed! These factors influence the productivity and profitability of business. firm to identify opportunities and getting the first mover advantage: Early identification of opportunities helps an enterprise to be the first to exploit them instead of losing them to competitors. Different factors affect differently the performance of business. For example, Maruti Udyog became the leader in the small car market because it was the first to recognize the need for small cars in India. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on the UKDiss.com website then please: Our academic writing and marking services can help you! In order to solve economic problems of our country, the government took several steps including control by the State of certain industries, central planning and reduced importance of the private sector. Business environment is relative in nature which means that it changes from one place to another and from one country to another. Many of these companies could get limited support in technology from their foreign partners due to restrictions in ownerships. Ideological inclination of political parties, personal interest on politicians, influence of party forums etc. These factors include gross national product, corporate profits, inflation rate, employment, balance of payments, interest rates consumer income etc. General forces (such as social, political, legal and technological conditions) have impact on all business enterprises and thus may affect an individual firm only indirectly. Technology is a factor that is being ever changed; therefore, adopting the latest technology is crucial for organizations to make best results and to reap substantial profits. The share of foreign equity participation was increased and in many activities 100 per cent Foreign Direct Investment (FDI) was permitted. It conveys all current information regarding market conditions to business. Business environment include economic, social, legal, technological and political factors. Study of environment provides them information for making realistic plans and implementing them effectively. Furthermore, an analysis of business environment facilitates managers to identify strengths, weaknesses, opportunities and threats that are to be addressed by them. The purpose of the sale, according to the government, was mainly to improve financial discipline and facilitate modernization. Proper understanding of business environment helps in formulating better policies and strategies. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Coping with rapid changes: All sizes and all types of enterprises are facing increasingly dynamic environment. Literacy rate, customs, values, beliefs, lifestyle, demographic features and mobility of population are part o the social environment. These social factors include growth of population, gender demographics, age distribution, health conditions, educational levels, social lifestyle and attitudes. Hence, this may include human recourses (personnel), financial position and manufacturing capabilities. These all factors affect the success or failure of any business and bring several opportunities, threats, and challenges to it. Similarly, demand for women’s shalwar kameez is high in India than in U.S.A. Business environment is a systematic approach which facilitates business in its functioning. Therefore, the decision-makers in business entities are under tremendous pressure to formulate proper business strategies in order to achieve organizational goals and objectives. SWOT Analysis facilitates managers to evaluate the organization’s resources and to link them with the firm’s business strategy. Rapidly changing technological environment: Increased competition forces the firms to develop new ways to survive and grow in the market. Businesses are able to face challenges and competition in market through systematic planning in an efficient way. It consists of several factors that affect the functioning, growth, profitability and even continuation of the business. These factors are outside the control of the business. Economic environment economic environment consists of economic factors that influence the business in a country. Disclaimer: This work has been submitted by a university student.
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