Scribd
Upload
35 views17 pages

Sim's Cookery

The business environment consists of both tangible and intangible factors that affect a business's external and internal operations. Tangible factors include infrastructure like transportation networks and land availability, while intangible factors include the local culture, economic conditions, and government regulations. Understanding factors like demographics, the natural environment, and level of competition is essential for entrepreneurs to identify opportunities and ensure their business idea is viable long-term in a particular location. Regular scanning of the local business environment allows entrepreneurs to adapt to changes and maximize their chances of success.

Uploaded by

Sasha Jagunap Tianchon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
35 views17 pages

Sim's Cookery

The business environment consists of both tangible and intangible factors that affect a business's external and internal operations. Tangible factors include infrastructure like transportation networks and land availability, while intangible factors include the local culture, economic conditions, and government regulations. Understanding factors like demographics, the natural environment, and level of competition is essential for entrepreneurs to identify opportunities and ensure their business idea is viable long-term in a particular location. Regular scanning of the local business environment allows entrepreneurs to adapt to changes and maximize their chances of success.

Uploaded by

Sasha Jagunap Tianchon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 17

Business Environment

and Market

Business environment in a
particular location has far-
reaching and long-term
effects on a small or micro
enterprise’s viability. In fact,
business ideas and
opportunities are partly
shaped or determined by the
business location. Unless it is
possible to migrate to more
favorable locations, the ideas
and opportunities for
business will oftentimes be
delimited to the surrounding
areas.
The business environment
consists of both the tangible
and intangible factors that
affect either the external or
internal business operations.
They may include the land
area available for economic
zones, the physical layout
and barriers such as rivers,
parks or lakes, and building
obstructions as well as the
transportation network; all of
which are considered
tangible factors. They also
include the demography of
clients and suppliers, the
competitors in the locale/area
and the available technology
for production. The
intangible factors, on the
other hand, include the sub-
culture, industry trends,
economic and government
activity or the political
situations in the area.
Natural and Physical
Environment. This concerns
the physical location of a
business’ store. The natural
environment also pertains
to the natural and man-
made structures that may
enhance the beauty of the
location, such as a park or a
sea front view, or serve as
barrier to the location, such
as a dump site or high rise
structures that obstruct a
view. The living condition in
an area also serves as a
standard for the ambience
you want to create for your
store.
Demography. This
pertains to the number of
people living in the area,
their age, gender, socio-
economic status, family
size, religion and even
growth trends. These are
invaluable information that
can help entrepreneurs in
matching their product to
the target market, in
deciding for the marketing
strategy, pricing and
product packaging among
others.

Culture. Culture or sub-


culture, being the totality
of the way of life, ideas
and customs of a set of
people or society,
primarily influence the
types of products that are
acceptable to a particular
locality. For example, the
influence of the Japanese
culture gave rise to
minimalist designs. A sub-
culture also shapes the
‘emotional’ environment of
an area. For instance, the
feeling of ‘fear’ for a
specific location may
serve as a barrier for a
business; a place where
one does not feel safe
because of the
prevalence of crime will
discourage entrepreneurs.
Changes in the lifestyle,
which is brought about by
changes in the population
demography and the
economy, also affect a
business. These lifestyle
changes may be the
increase of women’s
participation in the world
of work, change in buying
patterns and shift in
tastes.
Government
Regulations. The laws
and policies of the
national and local
government units also
influence the business
operations. Some
examples of policies that
directly affect
entrepreneurs are the
imposition or removal of
taxes for products, the
establishment of
economic zones and
assistance in product
labeling and packaging of
products. In addition,
improvement of facilities
and roads improve
transportation network
that facilitates transfer of
products from one area to
another or promotes
accessibility for
consumers.

Economy. This pertains


to the management of
resources and study of
the system of production,
distribution, and
consumption of goods
and services. A country’s
economy influences both
the entrepreneurs and
consumers as it relates to
the financial matters of
business like taxes and
interest rates and to the
quality of life, cost of
utilities and services,
among others. Even small
scale entrepreneurs must
learn to study economic
indicators to improve
business forecasts, such
as when to buy certain
materials and supplies,
when to open a store or
introduce new products
based on consumer
spending, or when to hire
employees. Some
examples of economic
indicators include the (a)
Gross Domestic Product
(GDP) which increases
when a country’s
economy is doing good;
(b) Unemployment rate
which indicates that more
unemployed people
usually signal an
economy getting worse;
and (c) Price Indexes and
Inflation rates which
determine the buying
power of consumers.
The existing enterprises,
who are either direct or
indirect competitors, are
also part of the business
environment. It is
important to scout for
products or services that
answer a similar need to
what you intend to
provide. Think of how you
can create a niche that
will differentiate your
product from the other
businesses – either in
specifying a target market
or in differentiating your
product quality or price.
The key concept to think
about is acquiring a
reasonable market share
despite of the competition.
Technology.
Technological changes
are inventions based on
the application of science
that create new product or
process improvements.
Some examples of
technological changes are
mobile tools that enable
online connection, new
business tools for analysis
and database, social
networks and modern,
digital equipment. These
advances in technology
result to efficiency and
productivity at a lesser
cost. It can be observed
that sending message
through e-mail provides a
cheaper and faster means
compared to hand-
delivered mails (snail
mails). An entrepreneur
can benefit from
technological changes by
identifying the appropriate
technological solution
available in the area or
locale.
At this point, it must be
quite clear why an
environment scanning of an
area considered as business
site is helpful for the
entrepreneur. In fact, the
impact of the factors in the
business environment does
not only include the
business operation but is
even relevant at the start of
the venture – during the
business idea generation
and opportunity
identification stage. A
concise guide on how to
spot and identify business
opportunities are provided
in the following section.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy