Business Environment Test - 3

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 govenment 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.