Business Environment and Business Opportunity

Comprehensive vocabulary flashcards covering the components of internal, external, micro, and macro business environments as discussed in the lecture notes.

Business

The condition or state in which a person is busy and remains busy, or human activities like production, extraction, or purchase or sales of goods that are performed for earning profits.

Environment

Refers to the aspects of surroundings.

Business environment

A set of social, legal, economical, political, or institutional conditions that are uncontrollable by nature and affect the functioning of organizations.

Internal Environment

Includes factors usually within the control of the business, such as the 5M's, which are subject to change according to the functioning of the enterprise.

5M’s

The factors of the internal environment: MAN, MATERIALS, MONEY, MACHINERY, and MANAGEMENT.

External Environment

Includes factors beyond the control of the business enterprise, such as government, legal, geo-physical, political, socio-cultural, and demographical factors.

Micro/Operating Environment

The external business environment close to the business that affects its capacity to work, consisting of suppliers, customers, intermediaries, competitors, and the public.

Suppliers

Reliable persons who supply raw materials and required components to the company.

Customers

Regarded as the 'king of the market,' their satisfaction level determines the success of every business.

Types of Customers

Wholesalers, retailers, industries, government and other institutions, and foreigners.

Market Intermediaries

Links between business and final consumers, including middlemen, marketing agencies, financial intermediaries, and physical intermediaries.

Competitors

Companies in the same or similar industry offering similar products or services whose actions compel business adjustments and efficiency.

Public

A group of people, whether users or non-users of the product, who have an actual interest in the business enterprise.

Macro/ General Environment

The external environment including factors that create opportunities and threats to business units.

Economic Environment

Changes based on policies and political situations; includes public economic conditions, economic policies, systems, and infrastructure like banking and insurance.

Non-economic Environment

Also called political environment, it affects business units through government beliefs, political strength, international relations, and defense policies.

Socio-cultural Environment

Social and cultural factors beyond business control, such as attitudes toward work, family systems, education, and marriage.

Technological environment

Factors or changes in technology that affect the operations, products, or services of a business.

Natural Environment

Includes natural resources, weather, climatic conditions, port facilities, and topographical factors like soil, sea, and rainfall.

Demographic Environment

The study of population perspectives, including size, standard of living, growth rate, age-sex composition, family size, income level, and education level.

International Environment

Factors important for industries dealing with import or export, including globalization, liberalization, foreign business policies, and cultural exchange.