BUSINESS ENVIRONMENT

Chapter 6
NATURAL AND
TECHNOLOGICAL
ENVIRONMENT
 Chapter 6
Natural and Technological
Environment

 The natural and technological environments present the

impulsive potential for development while the other
environments like the economic, social, and political and
government factors represent the propulsive potential for
development.

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Impulsive and Propulsive Factors Affecting Business

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

 Given the natural and technological environments, the

propulsive factors determine the extent of exploitation of
the development potential and the direction, pace and
pattern of development.

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Innovation
 Innovation is a very important factor that provides
competitive advantage and, consequently, determines
success.

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Calantone and Cooper have identified six major reasons for the new
product failures.6 They are as follows.

1. The better mousetrap no one wanted

2. The me-too product meeting a competitive brick wall
3. Competitive one-upmanship
4. Environmental ignorance
5. Technological dog products
6. The price crunch

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Rates of Product and Process Innovations

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Technology S Curve

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Innovative Drivers

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

ICT AND MARKETING

 Advances in information and communications technology are
revolutionalising the modus operandi of marketing and the business
system. The business horizon is humming with buzzwords like
internet, world wide web (www), cyberspace, information
superhighways etc. which are changing the way of contacting
customers; order receiving and processing; and networking and
integrating business system. The revolutionary changes being
ushered in by the internet are indeed exciting.

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Transfer of Technology

 Technology transfer is the process by which commercial technology

is disseminated. This will take the form of a technology transfer
transaction, which may or may not be a legally binding contract,27
but which will involve the communication, by the transferor, of the
relevant knowledge to the recipient.

Business Environment
Himalaya Publishing House Francis Cherunilam
 Chapter 6
Natural and Technological
Environment

Levels of TT
 Operational Level: At the bottom level are the simplest ones, needed for
operating a given plant: these involve basic manufacturing skills, as well
as some more demanding troubleshooting, quality control, maintenance
and procurement skills.
 Duplicative Level: At the intermediate level are duplicative skills, which
include the investment capabilities needed to expand capacity and to
purchase and integrate foreign technologies.
 Adaptive Level: At this Technological Self-reliance level, imported
technologies are adapted and improved, and design skills for more
complex engineering learned.
 Innovative Level: This level is characterised by innovative skills, based
on formal R&D, that are needed to keep pace with technological frontiers
or to generate new technologies.

Business Environment
Himalaya Publishing House Francis Cherunilam