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What is the business environment?

Business organizations do not operate or function alone. 

It has to react and work with what happens outside of the business- this is known as the external environment.  

It must also be aware of the processes and people that are within the business – this is the internal environment. 

What is the business environment?

Impact on the organization In a time when there is lots of competition in the business world, combined  with the increasing importance of the internet, it is essential that a business understands the environment that it is working within. 

Types of Business Environment

----Internal Environment

Factors that the business can control including:

Methods of production

Quality of the product/service

Quantity of goods produced

Motivation of the workforce

Marketing and methods of promotion

----External Environment

Factors, developments and situations which the company cannot control e.g. - 

The law and legal systems of the county in which they operate

Technological change for example use of the internet to buy/sell/advertise

Political factors, government policies

The economy and economic developments/changes

Competitive Environment

Those companies who are trying to sell a similar product or service to a similar customer. 

Also known as the market structure, is the dynamic system in which your business competes

Global Environment

This has become increasingly important because of the internet, common factors are:

24 hour shopping.

Access to goods and services from all over the world.

Advertising and Marketing

Use of social networking sites

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