macro environment
CHAPTER
1
Business Environment
Contents
• Introduction
• Business
• Objectives of business
• Environmental influences on business
• Environmental analysis
• Characteristics of business environment
• Components of business environment
• The micro and macro environment
• Competitive environment
• Porter’s five forces model–competitive analysis
Learning Objectives
The present chapter aims at:
• Definitions and objective of business
• Examine environment analysis, characteristics components of the organisation. Let us know the microenvironment and macro environment
• Understand the competitive environment
• Describe the Porter’s five-force model and its limitations.
2
Strategic Management for Chartered Accountants
“Environment factors of constraints are largely if not totally external and beyond the control of individual industrial enterprises and their arrangements. These are essentially the ‘givers’ within which firms and their managements must operate in a specific country and they vary, often greatly from country to country”.
Barry M. Richman and Melvyn Copen
“ The environment includes outside the firm which can lead to opportunities for or threats to the firm. Although, there are many factors, the most important of the sectors are socio – economic, technical, supplier, competitors, and government”.
Glueck and Jauch
“Analysis is the critical starting point of strategic thinking”
Kenichi Ohmae
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”.
Charles Darwin
“Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it”.
D.
Bruce D. Henderson
“Awareness of the environment is not special project to be undertaken only when warning of change becomes deafening”.
Clifton Garvin, Kenneth R. Andrews
1.1 INTRODUCTION
The concept of strategy has been borrowed from the military and adapted for
1
Business Environment
Contents
• Introduction
• Business
• Objectives of business
• Environmental influences on business
• Environmental analysis
• Characteristics of business environment
• Components of business environment
• The micro and macro environment
• Competitive environment
• Porter’s five forces model–competitive analysis
Learning Objectives
The present chapter aims at:
• Definitions and objective of business
• Examine environment analysis, characteristics components of the organisation. Let us know the microenvironment and macro environment
• Understand the competitive environment
• Describe the Porter’s five-force model and its limitations.
2
Strategic Management for Chartered Accountants
“Environment factors of constraints are largely if not totally external and beyond the control of individual industrial enterprises and their arrangements. These are essentially the ‘givers’ within which firms and their managements must operate in a specific country and they vary, often greatly from country to country”.
Barry M. Richman and Melvyn Copen
“ The environment includes outside the firm which can lead to opportunities for or threats to the firm. Although, there are many factors, the most important of the sectors are socio – economic, technical, supplier, competitors, and government”.
Glueck and Jauch
“Analysis is the critical starting point of strategic thinking”
Kenichi Ohmae
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”.
Charles Darwin
“Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it”.
D.
Bruce D. Henderson
“Awareness of the environment is not special project to be undertaken only when warning of change becomes deafening”.
Clifton Garvin, Kenneth R. Andrews
1.1 INTRODUCTION
The concept of strategy has been borrowed from the military and adapted for