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UNIT IIPlanning and Strategic Planning Q1) What are the different types of management plans?A1) Let's look at the different types of management plans.Plan typesPlanning is a ubiquitous management function; it has an extensive scope. So, all managers at all levels participate in planning. However, the plans made by the higher-level manager will be different from those made by the lower managers.Plans also differ in what they seek to achieve and the methods that will be used to achieve them. So, let's look at the types of plans managers are faced with.GoalsThis is the first step in planning the organization's action plan. Goals are the foundation of any business and the desired goal / outcome that the business plans to achieve, thus they are the end point of all planning activity.For example, one of the goals of an organization might be to increase sales by 20%. The manager will then plan all the activities of the organization with this ultimate goal in mind. When framing your organization's goals, a few points should be kept in mind.Goals should be framed for a single activity in mind. They must be results oriented. The objective must not frame any action The objectives must not be vague, they must be quantitative and measurable. They should not be unrealistic. The objectives must be achievable. StrategyObviously, this is the next type of plan, the next step that follows the objectives. A strategy is a complete and comprehensive plan to achieve these objectives. A strategy may be a plan that has three specific dimensionsSet long-term goalsSelect a specific course of actionAllocate the necessary resources for the plan.The training strategy is generally reserved for the top level of management. In fact, it defines all future decisions and the long-term scope and general direction of the company.PoliticsPolicies are generic statements, which are basically a guide to channel energies towards a specific strategy. It is the general way for an organization to understand, interpret and implement strategies. Like for example, most companies have a return policy or a hiring policy or a pricing policy, etc.Policies are set at all levels of management, from primary policies at the highest level to secondary policies. Managers must formulate policies to assist employees navigate a situation with predetermined decisions. They also help employees make decisions in unexpected situations.ProcedureProcedures are the following types of plans. They are a step-by-step guide to the routine to perform the activities. All employees must follow these staggered sequences so that activities can be carried out in an organized manner.The procedures are described in chronological order. So, when employees follow the instructions in order and completely, the success of the activity is practically guaranteed.Take, for example, the procedure for admitting a student to a university. The procedure begins with the completion of an application form. It will be followed by a collection of documents and the classification of applications accordingly.RulesRules are very specific statements that define an action or a non-action. Also, the rules do not allow any flexibility, they are final. All employees of the organization must follow and enforce the rules. Not following the rules can have serious consequences.The rules create an environment of discipline in the organization. They guide the actions and behaviour of all employees in the organization. The "no smoking" rule is an example.ProgramPrograms are a detailed statement that describes policies, rules, objectives, procedures, etc. of a company. These programs are important in the implementation of all kinds of plans. They create a link between the objectives, procedures and rules of the company.Primary programs are conducted at the top level of management. To support the primary program, all managers will undertake other programs at the middle and lower levels of management.MethodsThe methods prescribe the ways in which the specific tasks of a procedure must be performed. Additionally, the methods are very specific and detailed instructions on how employees should perform each task in the planned procedure. So, managers form methods to formalize routine jobs.Methods are very important types of plans for an organization. They help in the following waysGive clear instructions to employees, eliminate any confusion Ensures uniformity in employee actions Standardize routine jobs It acts as a general guide for employees and managers. BudgetA budget is a statement of the expected results that managers expect from the company. Budgets are also a significant statement, so they are expressed in mathematical terms. A budget quantifies the prognosis or future of the organization.There are several means to prepare budgets that managers make. There is the obvious financial budget, which forecasts the profit of the company. Then there are the operating budgets generally prepared by lower-level managers. Cash budgets control the cash inflows and outflows of the business. Q2) State the Importance of business planning.A2) Importance of business planningPlanning is an important function of management; it tells the manager where the organization should go. It also helps the organization reduce uncertainty. Let's take a look at some important planning functions.1] Planning provides a sense of directionPlanning means drawing up a predetermined plan of action for the organization. Actually, it establishes in advance what and how the work should be done. This helps provide workers and managers with a sense of direction, a guide in some way. Without planning, your actions would be uncoordinated and disorganized.2] Planning reduces uncertaintyPlanning not only sets goals, but also anticipates any future changes in the industry or organization. So, it allows managers to prepare for these changes and allows them to deal with uncertainties. Planning takes into account past events and trends and prepares managers for any uncertain events.3] Planning reduces wasteThe detailed plans made take into account the needs of all departments. This ensures that all departments are in tune with the plan and that all their activities are coordinated. There is clarity in thought that leads to clarity in action. All work is done without interruptions or loss of time or resources,4] Planning invokes innovationPlanning actually involves a lot of innovation on the part of managers. Being the first management function is a very difficult activity. It encourages the manager to broaden his horizons and forces him to think differently. That is why managers must be creative, insightful and innovative.5] Make decisions = FacilitateIn business planning, the objectives of the organization have been set, an action plan has been developed and predictions have even been made for future events. This makes it easy for all managers at all levels to make decisions with some ease. The decision-making process also becomes faster.6] Sets standardsOnce business planning is done, managers have now established goals and standards. This provides the manager's standards against which he can measure actual performance. This will help the organization to measure whether the objectives have been met or not. Therefore, planning is a prerequisite for control. Q3) What are the restrictions for business planning?A3) Planning limitationsWhile business planning is mandatory and a need for every organization, it has some restrictions. Let's take a look at some of it:1] StiffnessOnce the planning function is completed and the action plan is established, the manager tends to just follow the plan. The manager may not be in a position to change the plan depending on the circumstances. Or the manager may not be willing to change the plan. This type of rigidity is not ideal for an organization.2] Not ideal in dynamic conditions micasIn an economic environment, something is rarely stagnant or static. Economic, political, environmental and legal conditions continue to change. In such a dynamic environment, it becomes difficult to predict future changes. And if a manager cannot forecast accurately, the plan can fail.3] Planning can also reduce creativity.While making a plan requires creativity, managers blindly follow the plan. They don't change the plan according to the dynamic nature of the business. Sometimes they don't even make the right suggestions to top management. Work becomes routine.4] Planning is expensivePlanning is an expensive process. Because it is an intellectual and creative process, it is necessary to hire specialized professionals for the job. Also, it involves a lot of research and data collection and number processing. At times, the cost of the planning process can outweigh its benefits.5] Not completely accurateWhen planning, we have to predict the upcoming and forecast certain future events in the organization and the industry. So, of course, there cannot be one hundred percent certainty in such cases. So, it can be said that business planning lacks precision. Q4) Define Strategic PlanningA4
) Strategic planning means planning strategies and implementing them to realize the objectives of the organization. Start by asking yourself simple questions like: What are we doing? Should we keep doing it or change our line or the way we work? what's the impact of social, political, technological and other factors on our operations? Are we able to accept these changes, etc.?Strategic planning helps to understand what we are and where we would like to travel in order that environmental threats and opportunities are often taken advantage of, given the strengths and weaknesses of the organization.Strategic planning is that the formalization of designing during which plans are remodelled long periods of your time for the effective and efficient achievement of the organization's objectives. Strategic planning is predicated on an in depth environmental scan. it's a projection of environmental threats and opportunities and an attempt to mix them with the strengths and weaknesses of the organization.While long-term planning might not be fully equipped to soak up environmental impacts, strategic planning is completed to know, anticipate, and absorb environmental vagaries. Strategic planning is an ongoing process. Whenever business organizations want to realize a better rate of growth or change their operations, they need a far better management data system, they coordinate the activities of various departments, they eliminate complacency of organizations; they create strategic plans.Planning are some things we do before taking action; that’s, it's an anticipated decision-making. it's a process of deciding what to try to and the way to try to it before action is required.The strategic plan of the corporate is that the start line for planning. It is a guide for the event of solid sub-plans to realize organizational objectives. The goal of strategic planning is to assist a corporation select and organize its businesses during a way that keeps it healthy despite unexpected changes within the environment. it's intended to shape or reshape the company's businesses and products to supply targeted growth and profit.An interesting question which will come to mind is how conventional long-term planning gave thanks to strategic planning. Before the primary 1970s, managers who made long-term plans generally assumed that plans for the long run were simply extensions of what the organization had exhausted the past.However, environmental shocks during the 1970s and 1980s, like energy crises, deregulation of the many industries, accelerating technological change, and increasing global competition undermined this approach to long-term planning.These changes within the "rules of the game" forced managers to develop a scientific approach to analysing the environment, assessing the strengths and weaknesses of their organization, and identifying opportunities where the organization could have a competitive advantage. As a result, the worth d was recognized Q5) Explain with the help of an example Strategic planning concept.
A5) Planning is related to the future. A planning process implies different degrees of future.Some parts of the organization require planning for many years into the future, while others require planning only for a short period.For example, capital spending is related to a long-term period, while a year's budget is short-term in nature. The first is called strategic planning or long-term planning."Strategic planning" can be defined as the process of determining the organization's objectives and the resources that will be used to achieve these objectives, as well as the policies that guide the investment use, and arrangement of these resources. Examples of strategic planning in an organization are:
business diversification into new lines, planned growth rate in sales, type of products to be offered, etc. Strategic planning encompasses all functional areas of the business and is affected within the existing and long-term. framework of economic, technological, social and political factors.It also involves the analysis of various environmental factors, particularly with regard to how an organization relates to its environment. Generally, for most organizations, the strategic planning period varies between three and five years. Q6) What steps does strategic planning process consists of?A6) The strategic planning process consists of the subsequent steps:1. Determination of mission and objectives:Strategic planning begins with determining the mission of the organization. The main objectives for which the organization has been created must be clearly defined. Strategic planning deals with the long-term relationship of an organization with its external environment. Then, the business mission must be set in terms of the social impact of the organization.2. Environmental analysis:To identify opportunities and threats, the external environment of the organization is analyzed. A list of important factors that can affect the activities of the organization is prepared.3. Self-assessment:In the next step, the strengths and weaknesses of the organization are analyzed. This analysis will allow the company to capitalize on its strengths and minimize its weaknesses. The company can use external opportunities by focusing on its internal capacity. By combining its strengths with environmental opportunities, a company can face competition and achieve growth.4. Strategic decision making:Then strategic alternatives are generated and evaluated. After that, a strategic decision is made to reduce the performance gap. The organization must select the alternative that best suits its capabilities. For example, to grow, a company may enter new markets or develop new products or sell more in current markets.The choice of strategy depends on the external environment, the perception of management, the attitude of management towards risk, past strategies and the power and efficiency of management.5. Implementation and control of the strategy:Once the strategy is decided, it must be translated into tactical operational plans. Programs and budgets are developed for each function. Control must be developed to evaluate performance as the strategy is implemented.Whenever actual results are below expectations, the strategy should be reviewed or re-evaluated. It must be modified and adapted to changes within the external environment. Q7) State the importance of Strategic Planning.A7) Strategic planning offers the subsequent benefits:1. Economic benefits:Companies that make strategic plans have good sales, low costs, high EPS (earnings per share) and high profits. Companies have economic benefits if they create strategic plans. Companies like Reliance, Infosys, Tata, Wipro, Deloitte, etc. they're the giants that report good financial results as a results of sound strategic planning.2. Guide to organizational activities:Strategic planning guides members toward organizational goals. Unify organizational activities and efforts toward long-term goals. Guide members to become who they need to become and to try to what they need to try to. It focuses on specific goals that make it clear to members during which direction to maneuver. Making a profit is a smaller amount significant than getting a rate of growth of 10% per annum.Paying high dividends is a smaller amount significant than paying dividends at a 40% rate. Meeting the requirements of society is a smaller amount meaningful than providing free education to schoolchildren during a specific community. Resource allocation and attempts to realize objectives are facilitated by clear specifications in strategic planning. It makes the objectives operational and provides the proper direction to the activities of the organization.3. Competitive advantage:In the world of globalization, companies that have a competitive advantage (ability to deal with competitive forces) have better financial and sales results. this is often possible if you foresee the longer term. the longer term is often predicted through strategic planning. It enables managers to anticipate problems before they arise and resolve them before they worsen.4. Minimize risk:Strategic planning provides knowledge to evaluate risk and frame strategies to attenuate risk and invest in safe business opportunities. the probabilities of creating mistakes and selecting the incorrect goals and methods are therefore reduced.Risk is inherent altogether businesses and it's almost certain that not anticipating risk through strategic planning will cause business failure, unless proven otherwise accidentally. Business companies operating during a dynamic, changing, and risky environment cannot deal with a scarcity of strategy, the incorrect strategy development, or ineffective strategy implementation.5. Beneficial for companies with an extended gestation gap:The time span between investment decisions and therefore the generation of income from those investments is named the gestation. During this era, changes in technological or political forces can affect the implementation of selections and plans can therefore fail. Strategic planning discounts the longer term and allows managers to face threats and opportunities. Big amount of money is required in projects followed by expected financial returns.6. Promotes motivation and innovation:Strategic planning involves managers at the very best levels. Not only are they committed to goals and methods, but they also come up with new ideas for strategy implementation. This promotes motivation and innovation. It also provides motivation to lower-level people once they know that their efforts are contributing to the organization's goals.The satisfied workforce is that the strength of the organization. Save huge costs in reducing absenteeism, job turnover, role conflicts, etc. It promotes discipline within the organization and improves the effectiveness of human resources and also organizational effectiveness.7. Optimal use of resources:Strategic planning makes better use of resources to realize maximum performance. Resources are scarce and strategic planning helps to use them where they're needed most.If your grand strategy is correct, any number of tactical mistakes are often made, and yet the corporate succeeds. Q8) What are the limitations of strategic planning?A8) Limitations of strategic planning:Lack of knowledge: Strategic planning requires tons of data, training and knowledge. Managers must have high conceptual skills and skills to form strategic plans. If they are doing not have the knowledge and skill to organize strategic plans, the specified results won't be achieved. it'll also end in huge financial losses for the organization. This limitation is often overcome by training managers to form strategic plans.2. Interdependence of units:If business units at different levels (corporate level, business level, and functional level) aren't coordinated, it can create problems for the effective implementation of strategic plans.3. Managerial perception:To avoid developing risky goals and methods that they will not be ready to achieve, managers can land on sub-optimal goals and plans. Sometimes short-term commitments also defer long-term strategy development.4. Financial considerations:Strategic planning requires an excellent deal of your time, money, and energy. Managers are often constrained by these considerations when making effective strategic plans. These limitations are generally conceptual and may be overcome through rational, systematic and scientific planning. Researchers have shown that companies that make strategic plans outperform people who don't.5. Exchange problems:The factor acts more as a limiting think about light of changes in future conditions. during a complex and rapidly changing environment, the succession of latest problems is usually magnified by implications that make planning difficult. the matter of change is more complex in long-term planning.Current conditions tend to weigh heavily on planning and, by overshadowing future needs, can sometimes cause errors in judgment. Factors like changing technology, consumer tastes and needs, business conditions, and lots of others change rapidly and sometimes in unpredictable ways. Under such conditions, the design activities administered in one period might not be relevant for an additional period because the conditions in two periods are quite different.6. Failure of people:There are many reasons why people fail to plan, both at the formulation and implementation levels. a number of the foremost important failures are the shortage of commitment to planning, the shortage of development, solid strategies, the shortage of clear and meaningful objectives, the tendency to overlook the premises of designing , the lack to ascertain the scope of the plan, inability to ascertain planning as a rational approach, over-reliance on past experience, failure to use limiting factor principles, lack of support from top management, lack of delegation of authority, lack of control techniques adequate and resistance to vary . These factors are liable for improper planning or incorrect planning within the organizations in question.Time and cost: When browsing the strategic planning process, managers must also consider both time and price factors. the varied steps of designing can go as far as possible because there's no limit to precision in planning tools. But planning is suffering from time and price factors.Time may be a limiting factor for all managers within the organization and if they're busy preparing elaborate reports and directions beyond a particular level, they're risking their effectiveness. Excessive time spent securing information and trying to suit it into a compact plan is dysfunctional within the organization.2. Stiffness:Often people feel that planning provides rigidity in management action. many sorts of internal inflexibilities are often the results of planning itself. Planning stifles initiative from employees and forces managers to adopt a rigid or straitjacket mode of performing their work. In fact, rigidity can make management work harder than necessary. this will end in lag in job performance, lack of initiative, and failure to adapt to the changing environment.Many people feel that planning has limited value because the simplest results are often obtained by confusing the kinds of operations during which each situation is addressed when and if it seems relevant to the immediate problem. Although this planning rigidity factor may be a limiting factor, but without planning, it's really difficult to work particularly in large organizations.Planning also involves costs on a part of the organization. the varied factors discussed above contribute to the restrictions of strategic planning, either by making planning ineffective or by making planned work less. Q9) What is the SWOT analysis? Explain with help of example.A9) Strengths in Reliance Jio's SWOT Analysis:Strengths are defined as what each company does best in its range of operations, which can give you an edge over your competitors. The following are Reliance Jio's strengths:Strongest Customer Acquisition Strategy - Reliance Jio probably has the simplest customer acquisition strategy so far. The brand offered its services free of charge for 3-6 months to all its users. This resulted in millions of users using Reliance Jio and resulted in one of the best customer acquisition strategies in the history of telecommunications. Strong customer base: Jio boasts a whopping 100 million subscribers in the first 170 days of its launch, a record that no other provider has been able to record. This has also made Reliance Jio the largest Internet Service Provider in India. Technology: Jio currently uses the newest 4G LTE technology, which is one among the world's best technologies for the longer term. This supports Voice over LTE, which makes it scalable and compatible with 5G and 6G technologies that they are expected to be the future of wireless communication. Strong backing from parent company Reliance Industries: Reliance Industries may be a credible brand that echoes Indian sentiments and has great trust among customers. Jio's association with Reliance acts as a central strength. Brand Management - The rationale for Reliance Jio's huge customer base is that the brand management strategies it's adopted. The right promotion backed by lucrative offerings and credible brand ambassadors like Sharukh Khan and Amitabh Bachchan have helped create customer connectivity. Fast and extensive network: Reliance Jio has a presence in all 22 Indian telecommunication circles and is known for being a robust and fast network with no connectivity problems. Multiple offers with one name: Reliance Jio offer a variety of services such as movies, games, shopping, chat and messaging, etc., giving the customer many options to choose from. WEAKNESSES IN THE Reliance SWOT ANALYSISWeaknesses are wont to ask areas where the business or brand needs improvement. Some of Reliance Jio's key weaknesses are:Late market entry: Reliance Jio has made a late market foray that had already established players like Airtel and Vodafone who had taken a place in the customer's mind. Activation issues: Reliance Jio faced numerous gestation issues because it was unable to contain the large volumes of consumers it had acquired. In such a case, there were delays in the activation of the SIM card during the period following its launch. Price controversies - Reliance Jio was criticized for having lowered its prices beyond the ethical to penetrate the market and this led to accusations such as corruption and money laundering against it. Too many gifts: Reliance Jio currently offers many services for free and this was one of the reasons for the increased share of sales. However, the business may not be able to pay for all of them in the long run, which can negatively affect the business. Poor data connection - Data connection is often poor from Reliance Jio and the range is lower, causing slower upload speeds in select regions. Opportunities for Reliance Jio SWOT Analysis: Opportunities for Reliance Jio SWOT Analysis:Opportunities refer to those avenues in the environment surrounding the business that you can capitalize on to increase your returns. Some of the opportunities include:Future-driven technology: Reliance Jio uses the VoLTE 4G network that is scalable to adapt. 5g and 6G technologies. This offers numerous avenues for Jio or future bandwidth expansion. Applications: Reliance Jio has VoLTE which has great reach in terms of bandwidth. Therefore, they can offer applications to customers that are paid or even free initially and pay for use later. Competitive costing plan Reliance Jio pleasures itself on being a low-cost Internet service provider and mobile operator. This can be used as a positioning to target more markets and increase your market share, as most of your competitors cannot afford your prices. Expansion to other countries: Currently, Reliance Jio is only operational in India. However, there is plenty of room for expansion to foreign countries, at least in neighbouring regions. Threats in Reliance Jio's SWOT Analysis:Threats are those factors in the environment that can be detrimental to the growth of the company. Some of the threats include:Customer Loss Risk: Customers prefer Jio primarily because of the low prices they offer. At a stage where the company increases its price, there may be a loss of customers. Elimination of free services: Jio is currently associated with a large number of gifts. Once they are removed, there may be a drop in sales for the business. Criticism and negative image: Reliance Jio have been involved in many controversies from the moment it was started. These have resulted during a negative brand image for the corporate. Poor Code of Ethics: Many of the strategies adopted by Reliance Jio, such as low prices, free bandwidth, and go-to-market strategies, have been shown to be unethical and this may affect the goodwill of the company. long-term Q10) Define SWOT matrix.A10) Analysts present a SWOT analysis as a square with each of the four areas that make up a quadrant. This visual layout provides a quick overview of the company's position. Although all the points of a particular title may not be of equal importance, they should all represent key ideas about the balance of opportunities and threats, advantages and disadvantages, etc. SWOT analysis was used for the first time to analyze companies. SWOT analysis exampleIn 2015, a SWOT analysis of The Coca-Cola Company's Value Line highlighted strengths such as its world-famous brand, extensive distribution network, and opportunities in emerging markets. However, it is also seen that lack and warning like foreign currency change growing public interest in "healthy" beverages, and competition from suppliers of healthy beverages.Their SWOT analysis led Value Line to ask some tough questions about Coca-Cola's strategy, but also to point out that the company "will likely continue to be a premier beverage provider" that increased safe lender "a reliable source of knowledge. income and a little capital gains exposure. "Strengths describe how an organization excels and what distinguishes it from the competition: a strong brand, or A loyal customer base, a strong balance sheet, unique technology, etc. For example, a hedge fund may have developed its own business strategy that delivers outperforming results. Then you must decide how to use those results to attract new investors. Weaknesses prevent an organization from functioning at its optimum level. These are areas in which the company needs to improve to remain competitive: a weak brand, an above-average turnover, high levels of debt, an inadequate supply Opportunities ask favourable external factors that would give a corporation a competitive advantage. for instance, if a rustic reduces tariffs, an automaker can export its cars to a replacement market, increasing sales and market share. Threats ask factors that have the potential to harm a corporation. for instance, a drought may be a threat to a wheat producing company, because it can destroy or reduce crop yields. Other common threats include things like rising material costs, increased competition, labor shortages, etc. Q11) What are Internal and external factors?A11) The four elements above are common to all or any SWOT analyzes. However, many firms further categorise these elements into two distinct subgroups: internal and external.Generally, strengths and weaknesses are considered internal factors, as they're the results of organizational decisions under the control of your company or team.
Similarly, emerging competitors would be classified as a threat during a SWOT analysis, but since there's little or no you'll do about it, this makes it an external factor. this is often the rationale why you'll have seen SWOT analyzes called internal-external analyzes or IE matrices Q12) State the importance of SWOT analysis.A12) SWOT analysis not only deals with making just four lists, it's far more than that.The following points highlight its importance:1. The SWOT analysis reveals whether the corporate is healthy or sick.2. a corporation involves know both internal and external factors that affect its success or failure.3. Helps in forming a technique to organize for potential threats from competitors.4. SWOT analysis assesses the business environment intimately to form strategic decisions for the longer-term course of action.In India, the importance of SWOT analysis has increased even more since 1991, that is, after the adoption of the LPQ (Liberalization, Privatization and Globalization) policy.Now there's double competition for our own business concerns.Internally, competition has increased thanks to liberalization and privatization. Telecommunications, insurance, banks, and lots of other sectors have now opened to the private sector. thanks to globalization, many multinational companies have come to India and that they are giving stiff competition to Indian companies. only one concern that creates your SWOT analysis survive. Globalization is a chance because our entrepreneurs can now go abroad and sell their products. it's a threat because our internal market is often captured by multinationals if we don't produce quality products. Q13) What is the concept of Business Environment?A13) Concept of Business EnvironmentYou can start a business, but you need financial resources, such as finance, that you have to rely on financial institutions to succeed. Acceptance of social norms that must depend on society. Appropriate market conditions that must depend on the market. Sale of products / services that must be customer dependent. Labor that must depend on society.Then there are natural resources and raw materials, which must depend on nature. Also, government legal support that must depend on the government. There are many factors and aspects that affect the business environment. These factors are many different components of a single concept called the business environment.These business-dependent factors aren't stopped, they're very dynamic and constantly changing. For example, the trend, the Fidget Spinner trend, has provided the greatest impetus for the silicone mold industry to date.The changing needs of customers and new innovations in the market are part of the business environment.
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The challenge for companies in this tech era is not to enter the market, but to survive in the market. Surviving the market means adapting to change as soon as possible. Adapting to change means being aware of the business environment. Q14) Define Business Environment and state its importance.A14)
The power to compose a business environment is its suppliers, competitors, consumer groups, media, governments, customers, economic conditions, market conditions, investors, technologies, trends, and several other institutions operating outside the business. Makes up the business environment. These forces affect your business, even when it's outside the boundaries of your business.For example, government tax changes can reduce customer purchases. Here, businesses need to reestablish prices to survive change. The business was not involved in initiating the change, but had to adapt to the change in order to survive or take advantage of profitable opportunities. Now let's talk about the importance of the business environment. Importance of business environmentFrom the above, it can be said that the business environment is the most important aspect of any business. Recognizing ongoing changes not only helps businesses adapt to these changes, but also helps them use them as opportunities.
The business environment poses threats and opportunities for any business. A good business manager not only identifies and evaluates the environment, but also responds to these external forces. Considering the following facts, you can understand the importance of the business environment.1. You can identify business opportunitiesNot all changes are negative. If you understand and evaluate them, they can be the reason for your business's success. It is very necessary to identify change and use it as a tool to solve business and population problems.For example, Phanindra Sama was plagued by ticket reservations in India. He used to travel long distances to travel agencies to book tickets, but even after traveling this distance, he wasn't sure if his seat was confirmed. He saw the opportunity to establish an app in the face of problems and co-founded an online ticket booking app called "redBus".2. Helps to utilize useful resourcesCareful scanning of your business environment can help you leverage the useful resources your business needs. This helps businesses track these resources and convert them into goods and services.3. Dealing with changeBusinesses need to be aware of the ongoing changes in their business environment, including changing customer requirements, new trends, new government policies, and technological changes. If your business is aware of these regular changes, you can provide a response to address those changes.For example, when the Android OS market blossomed and customers began to prefer Android devices with simple interfaces and apps, Nokia couldn't keep up with the changes by not implementing Android OS on Nokia devices. They did not adapt and lost tremendous market price .4. Planning supportSolve the problem or take the opportunity. After analyzing the changes presented, the business can incorporate plans to counter the changes for a safe future.5. Helps improve performanceCompanies that scan the environment thoroughly not only address the changes presented, but also thrive with them. Adapting to external forces helps businesses improve performance and survive in the market. Q15) What are the characteristic features of Busines Environment?A15) (A) Overall external forceThe business environment includes everything outside the organization.When all these forces are applied, a business environment is formed.Example: When Pepsi and Coca-Cola got permission to start a business in India, it was an opportunity for them and a threat to local manufacturers such as Goldspot and Camp Cola.(B) Certain general forcesA specific force is a force that directly influences the operating activities of a company.Examples: suppliers, customers, investors, competitors, finance personnel, etc.General power is the power that indirectly influences the functioning of a company.Examples: economic, social, political, legal and technical conditions.(C) Mutual relationshipThe various forces of the business environment are interrelated.One component of the business environment affects the functionality of the other.Example: Increased people's life expectancy and health consciousness are driving the demand for diet coke, olive oil and many other health products.(D) Dynamic natureThe business environment is dynamic in nature and continues to change in the following ways:(A) Technical improvement,(B) Changes in consumer preferences,(C) Entering new competition into the market.Example: Many established companies in the FMCG (Fast-moving Consumer Goods) sector are focusing on producing products using natural ingredients in their "Patanjali Products" entry.(E) UncertaintyDue to future uncertainties, changes in the business environment cannot be accurately predicted.It is very difficult to predict changes in the economic and social environment.Example: The entry of many new companies has caused the price of Android smartphones to drop significantly.(F) ComplexityAll the forces of a business environment are interrelated and dynamic and difficult to understand.The complex nature of the business environment can be understood with partial research.Example: Raising the Goods and Services Tax to 15% increases government revenue (economic), improves people's social existence (social), reduces rich personal disposable income, and thereby inflation Helps to control.(G) Theory of relativityThe business environment varies by location, region, and country.Example: In China, as electricity consumption increases, electricity to the industry is provided at a lower price, which leads to mass production, but in India, high electricity consumption results in expensive electricity and production decreases. To do. The production cost will be high.Planning purely means what to do in the future. When the business environment presents problems and opportunities, it is up to the business to decide what plans need to be devised to address the future. Q16) What are the components of the business environment?A16
) The business environment is the perimeter aspect of a company that influences or influences the business and determines its effectiveness.Andrews also correctly defines the company's environment as a pattern of all external influences that affect the life and development of the company. Keith Davis also states that the business environment is a collection of all the conditions, events and impacts that surround and influence it.The business environment is constantly changing and uncertain. For this reason,
the business environment is said to be the sum of all factors outside the control of the company's management. These factors are constantly changing and involve both opportunities and risks, or uncertainties. Undermine the future of business.Some of the components of the business environment are: ---A. Internal environment – 1. Financial ability 2. Marketing ability 3. Operational ability 4. Human resources ability 5. General management ability B. External environment – 1. Micro environment 2. Macro environment.In addition, you will learn about other components of the business environment:1. Economic environment 2. Technical environment 3. Social environment 4. Demographic environment 5. Political and legal environment 6. Global environment.Business environment components: internal and external environmentBusiness Environment Components – Two Key Components: Internal and ExternalComponent # 1. Internal environment:This refers to all factors within an organization that affect the functioning of the organization. These factors are generally considered controllable. That is, the organization can change or change such factors.Component # 2. External environment:The external environment consists of all the factors that provide an opportunity or pose a threat to an organization. In a broad sense, the external environment includes various factors such as the international economy, the domestic economy, and the regional economy. Social change, demographic variables, political systems, technology, business attitudes, energy sources, raw materials, other resources, and many other macro-level factors make up the external environment.Such a wide range of environmental awareness can be called a general environment. All organizations are somehow interested in the general environment, but their immediate concerns are limited to some of the common environments that may be referred to as relevant environments. , Organizations can focus their attention. About those factors that are closely related to their mission, purpose, purpose and strategy.
Depending on their awareness of the relevant environment, the organization takes into account the impact of the surroundings that has an immediate impact on the strategic management process. Q17) Explain the important micro elements of the business environment.A17)
Important micro elements of the business environment are:a) Customers: The main task of any business is to attract and retain customers. This is to ensure unique long-term profitability and market presence. Therefore, it is necessary to closely monitor the needs and desires of customers to ensure their joy. This will increase the number of loyal customers in the company.Customer preferences and changes in preferences need to be predicted in advance, not just observed when they occur. The company also needs to make the necessary modifications to the product / service profile. Customers are the backbone of the company and that's exactly why the company exists.b) Product:Product elements such as demand, image, function, utility, function, design, life cycle, price, promotion, distribution, differentiation, and availability of alternatives to products and services also form a close part of the business environment. I will. Product / service functionality is the key to attracting / retaining customers.c) Marketing broker:This includes all people who promote the distribution of goods from production bases to various consumption bases. These are the intermediaries that form part of the distribution channel and those who help deliver the product / service to the ultimate consumer. The number can be small or large, depending on the length of the distribution chain and the type of distribution system your company employs. If this chain is hassle-free and works without many hurdles, it ultimately helps the organization.d) Competitors:The world has become a global market. There is fierce competition in every field. There are other entities that manufacture similar products and compete with the company for market share and sales. These need to be managed properly and market intelligence is needed to find future plans. These can play a major role in building or damaging the property of any company.e) Supplier:A key element in the microenvironment is the supplier, the supplier that supplies the company with raw materials, components, and machinery. Supplier must be reliable, act as a business partner, and work together to meet the ultimate consumer expectations. If the supplier is reliable, there is no need to hold large inventories that increase the risk of obsolescence or damage and block the company's working capital.Q18) What are the components of Macro Environment?A18) It consists of the following components:a) Sociocultural environment:It consists of the society and culture of the place where the organization operates. This is a common entity and affects almost every enterprise in a similar way. Some of the key factors and impacts of working in the social environment are all factors that influence people's buying and consuming habits, their language, beliefs and values, habits and traditions, tastes and preferences, education and business. b) Political environment: The political environment consists of factors related to the management of public relations and the impact of the organization on its business. The political environment is closely related to the economic system and economic policy. For example, communist countries have a centrally planned economic system. Apart from the laws governing investment and related matters, most countries have many laws that regulate the conduct of their businesses. These laws cover matters such as product standards, packaging and promotions.India is a democratic country with a stable political system, and the government plays an active role as a planner, promoter and regulator of economic activities. Therefore, businessmen are aware of the political environment facing the organization. Most business-related government decisions are based on political considerations in line with the political philosophy followed by the central and state-level ruling parties.c) Economic environment:The economic environment consists of macro-level patterns related to the areas of wealth production and distribution that affect an organization's business.d) Regulatory environment:The regulatory environment consists of factors related to the planning, promotion and regulation of government economic activities that affect an organization's business.e) Technical environment:The technical environment consists of applied knowledge and elements related to the materials and machines used to produce goods and services that affect an organization's business. For many companies, technology is the most dynamic of all environmental factors. Individual companies are interested in their products and process technologies. This environment is made up of factors that accompany all sorts of technological advances or their lack.f) Demographic environment:This environment deals with the composition and characteristics of the place's population. All relevant descriptions of the location's population with respect to its demographic profile have a dramatic impact on business decisions. It is beneficial for any company to consider these aspects in detail before planning a strategy. Q19) Give some examples that emphasize the role of the economic environment.A19) Some examples that emphasize the role of the economic environment.1) Economic liberalization since the last 20 years has had various impacts on Indian industry. While most companies have the advantage of being able to freely change the composition and capacity of their products, they have also had some negative impacts in the areas of capacity overcapacity and intensifying competition.With the partial deregulation of cement in 1982, production capacity and the resulting supply increased rapidly, and market conditions changed from severe shortage to a comfortable surplus. The liberalization of imports led to intensified competition in the capital goods industry, reducing profits and, as a result, many companies were unable to sustain their businesses.2) India's public savings have traditionally been invested in fixed assets and precious metals. Shares of savings invested in the government have been carried through post offices and banks. But lately, investors are increasingly looking at other means such as stock markets and company deposits.Recent changes in economic and fiscal policy have made many important developments. Entry into equity trading by leasing and finance companies, bonds, mutual funds, venture capital businesses, new financial products, banks and financial institutions is part of the development that provides resources for capital markets and project finance. Q20) Mention the Components of the economic environment. A20) Components of the economic environment are: I. General economic situation:The general economic situation that prevails in the economy is a determinant of economic prosperity and community well-being. These economic conditions are variables in which the amount of national income, per capita income, economic resources, income and wealth distribution, and economic development determine people's economic prosperity. Revenue and its distribution determine the business outlook and therefore the business strategy. In an economy where it is low and per capita is relatively low, demand will decline. This pessimistic situation does not attract business people who invest in and execute manufacturing and marketing activities. On the other hand, in an economy where the income of the economy is increasing, it leads to more and more investment and entry into industrial and marketing activities. In India, the backbone of the Indian economy, the Middle, is ready to increase income and invest in business. Even NRI considers it beneficial to invest surplus income in this way, helping the Indian economy to become stronger and thus benefit from profits. II. Economic system: The economy is an arrangement that encourages the use of free resources to generate and distribute income, based on some accepted economic philosophies. Economy around the world is widely linked to Kabbalism, socialism, and communism as a hybrid economy called a pure variety or mixed economy. India is the best example of a mixed economy, with the benefits of capitalism and socialism in one focus, eliminating the disadvantages of pure socialism or capitalism. Capitalism gives maximum economic freedom in the management of economic activity, socialism talks about maximum domination by the state, mixed economy is freedom and the role of the state in which both the public and private sectors support each other. I have. The collapse of the mighty nation formed in the early 20th century had to kick a bucket for a period of 100 years. Today, the Soviet Union is divided into small nations that were one of the greatest forces in the world linked to socialist ideology. III. Economic policy:It is the appropriate and timely economic policies adopted and implemented by the government that determine the fate of the state and its citizens. Think about India before 1991 and now. The Indian economy is on the verge of collapse and foreign exchange reserves were enough to pull another eight days. It was a change in personality as a political leader and the brain behind them, together they freed India from control and opened the Indian economy to the whole world. Private and public sector businesses that worked under the umbrella of protection were set up and faced the challenge of changing competition. Which foreign companies couldn't replace them as Indian players became global players? IV. Economic growth:Economic growth or development is the rise and maintenance of per capita income for all individuals who are members of the economy. It is economic growth, which represents increased consumer spending and lower pressure in the industrial sector, that provides more opportunities and enables businesses to withstand the severity of the threat. Other methods also apply. Declining economic growth and lower consumer spending will increase pressure and reduce profitability. V. Interest rate:Interest rates affect the demand for goods and services in the economy when they are purchased through borrowing. If interest rates are low, the demand for the product may be durable or non-durable. This gives Philip to a growing industry. The opposite is true if the rate is high. Today, R.B.I is emerging at lowest interest rates to increase demand for durable and non-durable consumer goods, which will bring the Indian economy out of pessimism and tomorrow's rut. The cost of capital also depends on interest rates. When they are getting capital at the lowest rates, the companies will encourage all companies to have ambitious plans and strategies in the case of borrowed funds. VI. Exchange rate:Exchange rates represent currency conversions to other currencies. It may be hard or soft. In 1991, the Indian Rupee was devalued to make Indian products cheaper in the global market to boost Indian exports. This was a great opportunity for all Indian exporters to export more commodities and reserves and earn forex. Today, foreign exchange reserves are at a record high of Rs 200 billion, at least costly to boost quality production. Indian exporters do so only if they regularly understand and implement three strategies for export cost, export quality, and export volume. Therefore, it is the exchange rate that determines the fate of a country. Q21) Explain Social environment and Technical environment.A21) Technical environment:
The rapid development of technology has a strong impact on all organizations, not just those operating in high-tech environments such as microprocessor manufacturing, pharmaceuticals, and fiber optic technology. The combined impact of computers, digital technology, and telecommunications affects most private and public sector businesses. As J. Shunpeter, as rightly called by everyone else, it is the "permanent gate of creative destruction." Technology change is a creative and destructive process in that it is responsible for building new things by destroying old ones. Therefore, the core of progress is destruction. This means that destruction and construction are not contradictory and provide complementary opportunities and threats. In an era of rapidly changing technology, the secret to success is triangular strategy. That is, managers need to anticipate, innovate, and excel to be successful.Companies that do not do so will be thrown away. When an American boxer took over Muhammad Ali, he said: Ali, you are the best, but I am the latest. We have to learn from Japanese. Before the war, "Made in Japan" was a sign that no one bought it because the product was the cheapest but the quality was the lowest. However, today, Japanese products are completely quality conscious, "zero defects", "automobiles" or "zips", "made in Japan", so there is a great demand. It talks about their ability to predict, innovate and excel. The Japanese are the best copy cuts and can innovate and excel others. Today, of the 2000 Toyota cars, 700 land daily on the soil of America, the great power of the United States. The strategic impact of technology changes was successfully brought about in the fall of 1982, in the article "The Emergence of Technology Portfolios" by Russian thinker Basis Petrov.(I) It may change the relative competitive cost position within the business.(II) Can create new markets and new business segments(III) By reducing or eliminating segment barriers, previously independent businesses can be disrupted or consolidated.New ideas, new products, new processes New methodologies are the result of technological change. That means that changing the order offers many opportunities for threats. That's why it pays off when strategists are constantly monitoring the technology kingdom and its impact on the company and its activities. Social environment:The social environment is the socio-cultural environment.
The socio-cultural environment is made up of a system of values, and the attitudes, beliefs, desires, expectations, aspirations, customs and customs of society change accordingly, and there are many opportunities and threats to the business operated for society. This socio-cultural environment covers aspects of society and its components. For a business house, it means: (I) Expectations from the business community for society(II) Social attitudes towards business and its management(III) View on job achievement(Iv) Perspectives on authority structure, responsibilities and organizational position(V) Views on customs, traditions and customs(VI) Class structure and labor movement(VII) Level of education. These socio-cultural environmental factors affect organizations in three ways:(I) Organizational goal setting,(II) Organizational processes and(III) Products and services provided by the organization. The changes that occur in society due to the changes in accepted values are right for the members of society. Therefore, what a particular age group wears, eats and entertains is determined by cultural values. Today, everyone is aware of a particular lifestyle based on social norms. The outlook on life is that life is short — enjoy it at any cost. As a result, more and more people are thinking about traveling to faraway places. Another thing is to get rich with simple money and storms. This has led the community to rely on lottery tickets, horse racing, betting and more. This also led to antisocial activity. Today, kidnapping and hijacking are very common for getting loot. These activities have created a demand for products and services that facilitate these activities. Countering these has also provided services and products that provide self-defense. Women's whereabouts are no longer limited to the kitchen. They are more educated and occupy reserved positions for men because they have an equal share. This meant that they didn't have time to prepare meals to care for their children. In this way, fast food habits are revealed, the services of domestic servants are increasing, and more and more families are seeking washing machines and entertainment on small screens. The younger generation has the freedom of video surfing, nightclub participation, expensive and high quality clothing, shoes, deodorants and toiletries. Mobile, mobike and car are the needs of these young people. Similarly, older people look younger and want to be younger, which helps maintain their hair color and health. Nowadays, people are becoming more health conscious. With this special attention and caution, they seek mineral water, preventative medications, preventive health checks, and dietary changes. Therefore, high cholesterol is a major cause of coronary artery disease. That's why people are looking for double or table refined cooking oils that consume too little. They avoid lean meat and choose white meat, that is, chicken and fish such as beef, mutton and pork. Recently, social awareness has been increasing. Social issues such as pollution, social responsibility of businesses, and worker safety and welfare are becoming more prominent. The social demands placed on the business community as a social responsibility are increasing. Did this affect what the business house produces? What kind of process do you adopt? How will the product be packed? And so on. Fully effective consumerism is responsible (responsible for the enactment of MRTP and consumer protection laws. Consumerism has influenced standards of technology, product quality, marketing activities and after-sales service. This is all about the business community producing and selling products and services that are determined by socio-cultural values. Q22) Write short notes on Demographic environment and Political and legal environment:A22) Demographic environment:Demographic characteristics deal with populations such as family size, fertility rate, growth rate, age structure, family size, education level, language, caste, income level, earners and non-earners.
The demand for goods and services depends on those demands, the demand is the potential or real market, and the market means the real and potential consumers. There is a positive relationship between population growth and demand for goods and services. Lower fertility has a direct or indirect impact on products and services for infants. If the population is made up of older people than young people, they are in high demand for preventative and therapeutic medical services, medicines, awakening sticks, hair color, etc. If you have a lot of young people, you will need everything from convenience goods, specialty goods, and shopping goods by consumer segment. Dislikes, style movements, fashion, and their part-time or full-time income. These changes in population offer many opportunities and pose challenging threats as well. The availability of skilled and cheap workforce, and the increasing demand for consumer goods and services, may allow multinationals to invest in new activities. Consumers in different countries may prefer "Made in India" products, where Indian companies have a cost advantage. It attracts foreign investment, which leads to optimal use of national resources and increased imports and exports. Population change cannot be underestimated in many ways that provide good opportunities to pose a threat on the same path. It is up to the business house to form strategies for success and implement them to embrace these opportunities by effectively handling threats. Political and legal environment:
The political and legal environment is, of course, called the regulatory environment. National, state and local governments play a constructive role as citizen administrators. To protect and promote the interests of citizens, they rely on regulatory activities that can be undertaken through constitutional provisions, government policy and industrial law. As for the constitutional provisions of India, the Constitution of India was passed by the Constituent Assembly in 1949. Constitutional provisions provide guidelines for central and state governments to control and regulate socio-economic policies. The provisions of the Constitution are divided into "basic rights" and "directive principles." Basic rights are set out in Articles 15, 16, 19, 23, and 24. Article 15 prohibits discrimination against citizens on the grounds of religion, race, caste, gender, or place of birth. Article 16 describes equal opportunity for all citizens in public employment, savings and the provision of settlements by the state. Article 19 states that all citizens have the right to practice any profession, profession, trade or business. Article 23 describes the right to human exploitation and transportation. Article 24 provides for the prohibition of child labor under the age of 14 in factories, mines or dangerous work. Directive principles are principles and laws that can be enforced by a court. These serve as guidelines for these governments and businesses. The main ones are:(I) Promotion of people's welfare.(Ii) Minimize income inequality and eliminate inequality in status facilities and citizens' opportunities.(Iii) Secure appropriate means of livelihood for citizens.(Iv) Equal amount of money paid to both men and women for equal work(V) Providing fair and human working conditions and relieving childbirth(Vi) Ensuring wages and working conditions to provide an appropriate standard of living.(Vii) Participation in worker management.(Viii) Proper distribution of ownership and management of natural resources to prevent the concentration of a small number of wealth and instead serve the public interest of the community. When it comes to government policy, these are based on industrial resolutions. Industrial resolutions embody government policy in power. Government policy is both positive and negative in the approach. Policy frameworks and implementations provide four roles: regulation, publicity, entrepreneurship, and planners.The "regulatory role" consists of:(I) Restrictions on private sector participation in areas such as defense, industry and nuclear power.(II) Management of plant capacity and location.(III) Set an upper limit on expenses, ……… Lower limits on wages and bonuses, and provisions for legal welfare measures.(IV) Regulations on equity participation and foreign investment.(V) Corporate tax, professional tax, taxes such as entertainment expenses,(VI) Import / export rules, tariffs, tariffs, etc. "Promotional roles" include:(I) Development of infrastructure for industrial and commercial activities such as roads, industrial parks, telecommunications equipment, electricity.(II) Support for subsidies, investment subsidies, tax incentives, tax exemption periods, subsidized water or electricity charges, etc.(III) Provide financial and financial incentives. The "entrepreneurial role" has something to do with:(I) Participation in businesses and industries where private sector participation is inadequate, that is, power generation and distribution.(II) Ownership and management of reserved industries such as defense production, nuclear power, oil and gas.(III) Management of industry in the public sector. The role of planning covers the following areas:(I) 5-year plan(II) Industry prioritization(III) Foreign participation and bilateral agreements with other states or countries.(IV) Greenfield area development plan(V) Regional development plans and programs. Focusing on "industrial law", many laws have been passed from time to time to regulate industry and commerce. Activities, protection of employee interests. The most important things that the business community should take into account are the Indian Contract Act of 1872, the Trade Union Act of 1926, the Employee (Industry) Permanent Order Act of 1946, the Industrial Dispute Act of 1947, and Exports of 1947. Immigration law, capital issues. 1947, 1948 Factory Law, 1948 Employee National Insurance Law, 1951 Industrial Development and Regulation Law, 1952 Employee Reserve Fund Law, 1955 Mandatory Commodity Law, 1956 Indian Enterprise Law, 1956 Securities Contract (Regulation) ) Law, Trade Marking Act 1958, Weight and Measurement Act 1958, Income Tax Act 1961, Borm Act 1965, Exclusive and Restricted Trade Practices Act 1969, Water (Contaminated and Contaminated) Control) Act, Household Electrical Appliances (1976 Quality Control Act, 1981 Air (Pollution Prevention and Control) Act, 1986 Consumer Protection Act, 1986 Environmental Protection Act, 1992 Indian Securities Trading Committee law. There is a tax law that is revised every year. The same applies to price control regulations. These laws and sets are very important to administrators. Because his policies and strategies can't hate local law.
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