“Markets always change faster than Marketing" - Philip Kotler.
Every business that need to survive or succeed depends on adapting itself to the environment within which it functions (Example, Change in technology, government policies, customer preferences, etc)
Factors to consider in Business Environment.
Physical and natural environment e.g. access to and cost of infrastructures, climate and weather conditions.
Technology and its changes impacting on competitive advantage.
Economy and Markets: Access to finance/Capital adequacy requirement
Social: - cultural and attitudinal influence
Business environment is the total surroundings which have a direct or indirect bearing on the functioning of business. External forces are factors and institutions that are beyond the control of the business and they affect the functioning of the business enterprise.
It refers to all those factors external to business that inhibit or favor their development. In order word, they affect business decisions .
Benefits of understanding the Business environment.
"Growth is never a mere chance, it is the result of forces working together" - James cash Penny.
Give direction for growth:- Identify the areas of growth and expansion of business and potential markets
Continuous learning:- Motivates managers to continuously update their knowledge, understanding and skills to meet the changes in the realm of business.
Determine opportunities and threats:- Help meet challenges successfully.
Product development & modification:- Assist in reviewing existing product offer to match consumer change in demand, taste. Etc.(in fashion and entertainments)
Image building:- showing sensitivities to the environment within which we operate (e.g. water provision to a community as CSR)