Business Environment Test - 5

Example of recent changes made old techniques obslete

• Digital watches to traditional watches
  
• Word processor to Typewriter
  
• LED TV to CRT TV
  
• Xerox machine to photo copier etc.
  

Consumer Protection Act, 1986 seeks to protect and promote the consumer's interest through speedy and inexpensive redressal of their grievances.

Business environment is the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise and it may affect its performance. Thus while analysing through SWOT analysis, trends and changes comes under threats.

Employees are an integral part of business.
Whereas A customer, investor, competitors etc are the specific forces which affects the business environment. 
Specific and general forces, Uncertainty, Relativity and Complexity are the main features of business environment.

Legal environment consists of various laws and legislations passed in the parliament. These can not be overlooked.  Statutory warnings come under legal environment.

Business environment through environment Scanning helps in finding out the opportunities of the business and strategies can be made to grab these opportunities. The major planning and policy formulation are done keeping in mind the business environment.

Globalisation refers to integration of domestic economy of a country with the international economy. It involves greater interaction and interdependence among various nations of global economy.

Economic environment consists of interest rates, inflation rates, stock market indices and increase and decrease in the value of rupee etc.

Social environment refers to the broad characteristics of the society in which a business enterprise operates.

composition of family comes under social environment , the other options are reference to legal environment and economic environment.

Social environment refers to all the characteristics of society in which business operates. It includes the customs and traditions of the society, standard of living, taste, preferences etc.   The diwali increases the sale of sweets, crackers and clothes. Thus effects the business and comes under social environment.

Increased competition may lead efficiency and effectiveness in utilization of resources. As well as it compelled the manufacturers to reduce their margin of profit. So that they can stay in competition for long period.

Liberalisation refers to end of licence, quota, unnecessary restrictions and controls over industry and trade.

Increase in the tax rate means increase in tax on a specific commodity. Such a tax may raise the price of the commodity to the consumer and reduce the net price received by the producer. Thus being an expense it will raise the cost of production.

Economic environment consists of Gross Domestic Product, Income level at national level and per capita level, profit earning rate, fiscal, monetary and industrial policy of govt etc.

Business environment 
enables the firms to identify opportunities and getting first mover advantage
helps to cope with rapid changes
helps in improving performance

Technological environment includes changes relating to scientific improvement, method of production, use of new equipment and machineries to improve the quality of product etc.

Thus it is an example of technological environment.

Political environment includes political conditions such as type of government in power, attitude of govt towards different groups of societies, policy changes etc. Thus it is an example of political environment.

Privatisation is an economic reform aimed at giving greater role to private sector and limiting the area of public sector in the economy.

Political environment includes political conditions such as general stability and peace in the country and specific attitudes with the elected govt hold towards business.

Political instability will shake the confidence of business people.

The political stability builds up the confidence among business people to invest in long term plans. Political instability can shake that confidence.

Technological environment includes change in the methods of production, use of new equipment and machineries to improve the quality of product, recent technological advancement in computers and electronics and internet/ World Wide Web etc.

Under environment scanning the businesses do their SWOT analysis. It provides the complete awareness and understanding of business environment. Thereby the businesses can take the first mover advantage.

Liberation refers to removing licence, quota, permits and other restrictions and controls. Liberalization reduces the control of government and encourages private participation.

While observing economic environment, the gross domestic product increases the disposable income of people of a country will also increase and it will increase demand for products.

Social environment consists of customs and traditions of society, the standard of living, taste, preferences and education level of people in the concerned society. Thus it comes under social environment.

Legal environment constitutes various laws and legislations passed by the parliament. Non compliance of laws can lead into legal problems. Thus this is an example of legal environment.

Environment scanning is the process by which organisations monitor their relevant environment to identify opportunities and threats. It finds out the influence of different factors and persons on the business.

Change in agricultural prices does not explain impact of govt policy changes on business & industry.

• Presently more demanding customers are there because they are well informed
  
• Changes in industrial and licensing policy and entry of foreign firms increase competition
  
• Shift of firms policy of production oriented to societal markrting oriented production
  

Social environment consists of customs and traditions of the society, standard of living, taste, preference and educational levels etc. of people living in the society where business exists.

When social environment will change, it will change the demand of existing product to new one.

Globalisation refers to integrate different economies of the world.  It involves free interaction of domestic economy with rest of the world in the fields of production, trade, capital movement, exchange rates etc.