Characteristics of Modern Business Environment - Business Environment | Business Environment - B Com PDF Download

Characteristics of Modern Business Environment:

The environment is ever changing and dynamic in nature. In last few decades, the modern business environment has changed drastically and shaped entirely, in a very different manner. Now, it has become a challenge for business managers to understand their business environment and formulate business plans and policies accordingly.

The following characteristics of new modern business environment have emerged:

1. Bulk Size of Business: The mass production has become an integral part of modern business. As volume with expected lower costs rises, it helps to attain higher rates of output at low unit cost. It has become a common strategy to cope up with competition and earn higher profits.

2. Diversification: presently, every businessman invests his capital in diversified economic activities so that he can avoid negative effects of market fluctuations. Many firms invest their funds in different market locations and foreign economies in order to avoid the impact of adverse business situations, such as, recession, high inflation, lockout, strikes etc.

3. Change in Consumers’ Taste and Preference: The tastes and preferences of modern consumers have completely changed because of change in standard of living, consumption pattern, technology advancement etc. Now, people spend more money on services. A large proportion of consumers‟ income has been spent on entertainment, electronic gadgets, and luxuries. Modern customer prefers quality products rather than cheap one. 

4. Change in Distribution Channel: The revolutionary change in technology has drastically changed the conventional distribution system. Introduction of e- commerce has narrowed down the distribution channel. Nowadays, firms offer their product directly to the consumer through the websites or their own outlets. 

5. Globalisation of Business: Modern business has now become global. MNC‟s are dominating the global markets. The Government of different countries are also liberalising their economies by allowing foreign countries to enter their domestic markets. The mergers and acquisitions across the national boundaries have also been increasing the presence of business firms in international market. 

6. Emergence of International Organisations: With the increase in cross border trade, the role of various international institutions, such as, WTO, IMF, World Bank, and regional organisations, like, SAARC, EU, and NAFTA has also increased. These organisations set rules and regulations for international trade.

7. Intense Competition: Globalisation of economies has increased the competition in international as well as domestic markets. In present business scenario, no firm wants to remain within the regional boundaries of a country. They enter international market to explore new business possibilities.