PPT - Business Environment | Business Studies (BST) Class 12 - Commerce PDF Download

 Page 1


Business 
Environment
Page 2


Business 
Environment
Meaning of Business 
Environment
Definition
The sum total of all 
individuals, institutions and 
forces outside a business's 
control that may affect its 
performance.
Scope
Includes economic, social, 
political, technological 
forces operating outside 
business boundaries.
Impact
These external forces influence business performance through 
government policies, technology, consumer preferences, and 
market competition.
Page 3


Business 
Environment
Meaning of Business 
Environment
Definition
The sum total of all 
individuals, institutions and 
forces outside a business's 
control that may affect its 
performance.
Scope
Includes economic, social, 
political, technological 
forces operating outside 
business boundaries.
Impact
These external forces influence business performance through 
government policies, technology, consumer preferences, and 
market competition.
Features of Business Environment
1
Totality of External Forces
Business environment is aggregative, encompassing all 
external elements affecting business.
2
Dynamic Nature
Constantly changing through technological 
improvements, shifting consumer preferences, and new 
competition.
3
Uncertainty & Complexity
Difficult to predict future happenings, especially with 
frequent environmental changes.
4
Relativity
Differs from country to country and region to region.
Page 4


Business 
Environment
Meaning of Business 
Environment
Definition
The sum total of all 
individuals, institutions and 
forces outside a business's 
control that may affect its 
performance.
Scope
Includes economic, social, 
political, technological 
forces operating outside 
business boundaries.
Impact
These external forces influence business performance through 
government policies, technology, consumer preferences, and 
market competition.
Features of Business Environment
1
Totality of External Forces
Business environment is aggregative, encompassing all 
external elements affecting business.
2
Dynamic Nature
Constantly changing through technological 
improvements, shifting consumer preferences, and new 
competition.
3
Uncertainty & Complexity
Difficult to predict future happenings, especially with 
frequent environmental changes.
4
Relativity
Differs from country to country and region to region.
Importance of Business 
Environment
Identifying 
Opportunities
Early 
identification 
helps firms gain 
first-mover 
advantage, like 
Maruti in India's 
small car market.
Recognizing 
Threats
Environmental 
awareness 
serves as an 
early warning 
system against 
competitive 
threats.
Tapping 
Resources
Environment 
provides crucial 
inputs like 
finance, 
materials, labor, 
and serves as 
output 
destination.
Page 5


Business 
Environment
Meaning of Business 
Environment
Definition
The sum total of all 
individuals, institutions and 
forces outside a business's 
control that may affect its 
performance.
Scope
Includes economic, social, 
political, technological 
forces operating outside 
business boundaries.
Impact
These external forces influence business performance through 
government policies, technology, consumer preferences, and 
market competition.
Features of Business Environment
1
Totality of External Forces
Business environment is aggregative, encompassing all 
external elements affecting business.
2
Dynamic Nature
Constantly changing through technological 
improvements, shifting consumer preferences, and new 
competition.
3
Uncertainty & Complexity
Difficult to predict future happenings, especially with 
frequent environmental changes.
4
Relativity
Differs from country to country and region to region.
Importance of Business 
Environment
Identifying 
Opportunities
Early 
identification 
helps firms gain 
first-mover 
advantage, like 
Maruti in India's 
small car market.
Recognizing 
Threats
Environmental 
awareness 
serves as an 
early warning 
system against 
competitive 
threats.
Tapping 
Resources
Environment 
provides crucial 
inputs like 
finance, 
materials, labor, 
and serves as 
output 
destination.
More Benefits of Understanding Environment
1
Coping with Rapid Changes
Today's dynamic environment requires understanding to develop effective responses.
2
Planning & Policy Formulation
Environmental analysis forms the basis for future planning and decision-making guidelines.
3
Improving Performance
Enterprises that monitor their environment and adapt accordingly improve performance and longevity.