Question

Why should firms study their business environment ? explain the impact of different components of business environment on business enterprises?​

Answer 1

Answer:

The various components of business environment are- External environment consists of those factors that affect a business enterprise from outside. External environment includes shareholders, competitors, customers, society, government laws and regulations, policies and technology.

Answer 2

Answer:

Explanation:

of all the individuals, institutions, competing organisations, government, courts, media, investors, and other factors outside the power of the business organisations but affects the business performance. Hence, changes in government economic policies, rapid changes in technology, changes in consumer tastes and preferences, increasing market competition, etc. are outside the business organisations' power but affect the business performance immensely.For example, an increase in taxes by the government makes everything expensive in the market; technology changes may make the existing product obsolete, political uncertainty creates fear in the mind of investors, increase in competition in the market due to competitors may affect business profit, and changing in demand and preferences may increase the need for a new product and decrease the demand for old product.Business Environment DefinitionThe term “Business environment " is the sum of all conditions, events, and influences that surround and affect business activities and growth.Components of Business EnvironmentInternal - It combines the factors that exist within the company. These are –Human resourcesValue systemVision and missionLabour unionCorporate cultureExternal - An external Environment includes those outside factors that exercise an influence on a business’s operations. It is further classified into two segments.Macro - Socio-cultural, political, legal, and global factors fall into this category.Micro - This environment has a direct and immediate impact on a business. It consists of customers, investors, suppliers, etc.