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Nature of Business
Business may be understood as the organised efforts of enterprises to supply consumers with goods and services for a profit. Businesses vary in size as measured by number of employees or by sales volume Large Organisations such as Steel Authority Of India Ltd SAIL and Tata
Business Objectives
EARNING PROFIT GROWTH EMPLOYEE SATISFACTION AND DEVELOPMENT QUALITY OF PRODUCTS AND SERVICES MARKET LEADERSHIP JOY OF CREATION SERVICE TO SOCIETY
BUSINESS ENVIRONMENT
It is very important to understand the environment within which the business operates as it is ultimately responsible for the success of the business. For eg when there is a change in the government policies the business has to make the necessary changes to adapt itself to new policies. Similarly a change in the technology may render the existing products
ENVIRONMENTAL ANALYSIS
It is the indepth study of the environment which surrounds the business and affects its performance. William Gluek and Lawrence Jauch have stressed that Environmental Analysis and diagnosis give strategists time to anticipate opportunities and to plan to take optional responses to these opportunities. It also helps strategists to develop an early warning system to prevent threats to the firm.
OBJECTIVES/IMPORTANCE OF E.ANALYSIS
Firstly the analysis should provide an understanding of the current and political changes taking place in the task environment. Secondly the environmental analysis should provide inputs for strategic decision making. Mere collection of data is not enough, the information collected must be used in strategic decision making.
Objectives in short
Development of broad strategies and long term policies of the firm. Development of action plans to deal with technological advancements. To foresee the impact of socioeconomic changes at the national and international levels on the firms stability. Analysis of competitors strategies and formulation of effective counter
EG OF FIRMS
Firms which have initiated changes in response to environmental changes Crompton GreavesFear of Multinationals, poor financial results, return of consignment of fans from Italy as the taples on its boxes gathered rust. Environmental Changes--Restructured the company into four strategic business units, each headed by a
STAGES
Monitoring---Monitoring involves tracking the environmental trends, sequences of events, or stream of activities. It frequently involves following signals or indicators unearthed during environmental scanning. The purpose of monitoring is to assemble sufficient data to discern whether certain trends or patterns are emerging.
STAGES..
Forecasting---Strategic decision making requires a future orientation. Forecasting is concerned with developing plausible projections of the direction, scope, and intensity of environmental change. It tries to layout the path of anticipated change. Eg How long will it take for the new technology to reach the market place?
STAGES
Assessment---Unless the outputs of scanning, monitoring and forecasting are assessed to determine the implications for the organisations current and potential strategies the information provided would be futile. Assessment involves identifying and evaluating how and why current and projected environmental changes affect the management of the