Meaning of Business In literal sense , the word business means what keeps one busy or occupied.

. But every engagement or occupation will not constitute business In economic sense, the word business means work, efforts of people which are connected with the production of wealth

Meaning of Environment Environment refers to all external forces which have a bearing on the functioning of business. Environmental factors are largely if not totally external and beyond the control of individual, industrial enterprises and their managements

environment includes factors 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 socioeconomic, technological, supplier, competitors and government

Economic Environment Social and cultural environment Political Environment Legal Environment Technological Environment

The analysis should provide an understanding of current and potential changes taking place in the task environment Environmental analysis should provide inputs for strategic decision making It should facilitate and foster strategic thinking in organizations

Environmental scanning

Strategy formulation

Strategy implementation

Evaluation and control

Development of broad strategies and long term policies of the firm Development of action plans to deal with technological advancements To foresee the impact of socio-economic changes at the national and international level on the firms stability Analysis of competitors strategies and formulation of effective counter measures To keep oneself dynamic

The scope of business is very vast Business includes all activities connected with production, trade, banking, insurance, finance, advertising, packaging, and numerous other related activities Business also includes all efforts to comply with legal restrictions and government requirements and discharging obligations to consumers and satisfy their needs Thus people occupy a central place around whom, by whom and for whom business runs

Scanning
Monitoring Forecasting

Assessment

1)

Scanning it involves general surveillance of all environmental factors and their interactions in order to Identify early signals of possible environmental change Detect environmental change already under way

2) Monitoring- it involves tracking the environmental trends, sequences of events, or streams of activities Three outcomes emerge out of monitoring A specific description of environmental and patterns to be forecasted The identification of trends for further monitoring Identification of areas for further scanning

3) Forecasting- scanning and monitoring provide a picture of what has already taken place and what is happening. Strategic decision-making requires a future orientation. Naturally forecasting is an essential element in environmental scanning Forecasting is concerned with developing plausible projections of the direction, scope and intensity of environmental change.

4) Assessment it involves identifying and evaluating how and why current and projected environmental changes affect or will affect strategic management of the organisation Assessment, therefore, tries to answer questions such as what are key issues presented by the environment, and what are the implications of such issues for the organization?

1)

2)

Environmental analysis does not foretell the future, nor does it eliminate uncertainty for any organisation. Thus organisations that practice environmental analysis sometimes confront unexpected events. Environmental analysis is on and off itself, is not sufficient guarantor of organisational effectiveness it is only one of the inputs in strategy development and testing

3) The potential of environmental analysis is often not realized because of how it is practiced. At times managers place uncritical faith in the data verifiability and accuracy 4) Too much reliance is often placed information collected through environmental scanning. When there is overloading of information, one is likely to get lost and become inactive

A vision statement is sometimes called a picture of your company in the future but its so much more than that. Your vision statement is your inspiration, the framework for all your strategic planning The vision statement answers the question, Where do we want to go?

BHEL: A world class innovative, competitive and profitable engineering enterprise providing total business solutions Colgate : to be the company of first choice in oral and personal hygiene by continuously caring for consumers and partners

The mission statement answers the question what is our business ? Where as the vision answers the question what do we want to become ? It defines the business that the company wants to be in and serves as its guiding principle It differentiates company from its competitors

i. ii. iii. iv. v.

Profit- profit is the main incentive, motivator, strong sustainer, judicious allocator of resources, objective indicator of productivity, and solid base for growth expansion and survival. Not all enterprises are interested in profits Growth- business should grow in all directions over a period of time. Add more products Diversify into new areas Integration- forward or backward Increase market share Cut down cost and increase productivity

Power- business houses have vast resources(money, materials, men and know how) at its command. Several enlightened business man have used their power for good of society Employee satisfaction and development- caring for employee satisfaction and providing for their development has been one of the objectives of business enterprises

Quality products and services- those who insisted on and persisted in quality survived the competition and stayed ahead of others in the market. Persistent quality of products earn brand loyalty, a vital ingredient of success Market leadership innovation is the key factor for market leadership. Innovation may be in product, advertisement, distribution , finance or any other field

Challenging- business offers vast scope and poses formidable challenges . Joy of creation- it is through business strategies new ideas and innovations are given a shape and are converted into useful products and services for the benefit of customers

1.

2.
3. 4.

Service to the society business is a part of society and has several obligations towards it Providing safe and quality goods at reasonable prices Providing employment Maintaining and protecting ecology Supporting less privileged sections of people in society

Good corporate citizenship- it implies that the business unit complies with the rules of the land, pays taxes to the government regularly, discharges its obligations to society and cares for its employees and customer.