BUSINESS AND ITS

ENVIRONMENT
Internal and External Factors
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READY?
 omniscenco
is a social science that studies the production,
distribution, and consumption of goods and
services
ECONOMICS
 LACITIPO
RELATING TO THE GOVERNMENT OR THE
PUBLIC AFFAIRS OF A COUNTRY.
POLITICA
L
TNOLGCYOEH
METHODS, SYSTEMS, AND DEVICES
WHICH ARE THE RESULT OF
SCIENTIFIC KNOWLEDGE BEING USED
FOR PRACTICAL PURPOSES .
TECHNOLOG
Y
 NALEERXT
SOMETHING IS ON THE OUTSIDE OF A
SURFACE OR BODY, OR THAT IT
EXISTS, HAPPENS, OR COMES FROM
OUTSIDE .
EXTERNA
L
 LANERINT
OF, RELATING TO, OR OCCURRING ON
THE INSIDE OF AN ORGANIZED
STRUCTURE
INTERNAL
 WHAT IS
BUSINESS
ENVIRONMENT
Business environment refers to the aspect
of the surrounding of business enterprises
which have influence on the functioning of
business
 BUSINESS
ENVIRONMENT
And its external factors
Economic Conditions

Market Trends

Competition
 Economic Conditions • GDP - Gross Domestic Product
• Unemployment Rate
• Inflation Rate

Market Trends

Competition
Economic Conditions

Market Trends • Market trends are the prevailing changes and shifts
in a specific market that influence buying and selling
behaviors.

Competition
Economic Conditions

Market Trends

Competition • Competition is the rivalry and contest among businesses or

individuals in a market, as they vie for customers, market
share, and economic success.
Internal Factors

External Factors

Micro Economics

Macro Economics
 Internal Factors • Internal factors refer to the factors within an organization or
system that can influence its operations and outcomes. These
factors include the organization's resources, capabilities,
culture, and management decisions.

External Factors

Micro Economics

Macro Economics
Internal Factors
• External factors, on the other hand, are the
factors outside of an organization or system
that can impact its operations and
External Factors outcomes. These factors may include
economic conditions, technological
advancements, political and legal factors,
and social and cultural influences.
Micro Economics

Macro Economics
Internal Factors
• Microeconomics is the branch of economics
External Factors that focuses on the behavior of individual
economic units such as households, firms,
and industries. It examines how these units
make decisions regarding the allocation of
Micro Economics limited resources.

Macro Economics
Internal Factors
• Macroeconomics, on the other hand, deals
External Factors
with the overall performance and behavior
of the economy as a whole. It studies
Micro Economics aggregate economic variables such as
inflation, unemployment, national income,
and economic growth.

Macro Economics
 BUSINESS
ENVIRONMENT
CHART
EXAMPLE
 12 TYPES OF
ENVIRONMENT
 ECONOMIC ENVIRONMENT
This refers to the conditions and factors related to the economy of a region
or country, such as inflation rates, growth, and employment levels. It impacts
business by influencing consumer spending, demand for products, and
overall financial stability.
 TECHNOLOGICAL ENVIRONMENT

This encompasses the advancements and innovations in technology

that can affect how businesses operate and compete. It includes
factors like the adoption of new technologies, research and
development, and the pace of technological change.
POLITICAL AND LEGAL ENVIRONMENT

This involves the laws, regulations, and

political stability of a given area. Businesses
must navigate these factors to ensure
compliance with regulations and maintain
positive relationships with governments.
 SOCIAL AND CULTURAL ENVIRONMENT

This includes societal norms, values, and demographics. It

influences consumer behavior, product preferences, and
marketing strategies. Understanding cultural differences is
crucial for global businesses.
 COMPETITIVE ENVIRONMENT

This pertains to the rivalry and competition within a

specific industry or market. It involves analyzing
competitors, their strategies, and market dynamics to
gain a competitive edge.
 GLOBAL ENVIRONMENT
This reflects the interconnectedness of
markets and economies on a global
scale. Businesses must consider
international trade, global supply chains,
and geopolitical factors when operating
internationally.
 NATURAL ENVIRONMENT

This encompasses factors related to the

environment and sustainability,
including climate change, resource
availability, and environmental
regulations. Businesses are increasingly
focusing on eco-friendly practices.
SUPPLIER AND DISTRIBUTOR ENVIRONMENT

This involves the relationships with suppliers

and distributors, including their reliability,
pricing, and efficiency. Effective supply
chain management is critical for business
success.
 FINANCIAL ENVIRONMENT

This refers to factors like interest rates,

exchange rates, and access to capital. It affects
a company's cost of financing, investment
decisions, and overall financial health.
 LABOR AND WORKFORCE

This encompasses labor market conditions,

including the availability of skilled workers, labor
laws, and labor unions. It impacts hiring, wages,
and employee relations
 REGULATORY ENVIRONMENT

This involves government regulations that

businesses must adhere to, covering areas such
as safety standards, product labeling, and
industry-specific rules. Non-compliance can
lead to legal issues.
 CRISIS AND RISK ENVIRONMENT

This includes potential risks and crises that a business may

face, such as natural disasters, economic downturns, or
cybersecurity threats. It's essential for businesses to have
risk management strategies in place.
 “YOU CANNOT GET THROUGH A
SINGLE DAY WITHOUT HAVING AN
IMPACT TO THE WORLD AROUND YOU.
WHAT YOU DO MAKES DIFFERENCE
AND YOU HAVE TO- DECIDE WHAT
KIND OF A DIFFERENCE YOU WANT TO
MAKE.”

-JANE GOODALL
THANK YOU
FOR
LISTENING!
Hope you had fun!