External environment appraisal • Introduction and characteristics • Environmental sectors o Market o Technological o Supplier o Economic o Regulatory o Political o Socio cultural • Environmental scanning [pic] What is environment? Characteristics <> <> <> External environment sectors… Market environment 1. Customer/client factors 2. Product factors 3. Marketing intermediary factors 4. Competition related factors Technological environment 1. Technological development, Automation introduced 2. Impact of technology 3. R&D activity 4. Rate of technological change
Supplier environment 1. Cost, availability of raw materials, finance, human resource 2. Supply of plant and machinery, spare parts and after sales service 3. Bargaining power of suppliers Economic environment 1. Current economic stage of the country 2. Type of economic structure adopted – capitalistic, socialistic, mixed 3. Economic policies – industrial, monetary, fiscal 4. Economic indices – National income, distribution of income, growth rate per capita income, disposable income, rate of savings and investments, value of exports and imports . Infrastructure factors – financial institutions, banks, modes of transport & communication Regulatory environment 1. Constitutional framework, division of legislative powers between central and state govt. 2. Policies related to licensing, monopolies, foreign investment, financing of industries 3. Export import policies 4. Other policies related to public sector, SSIs, sick units, development of backward areas, environmental pollution, consumer protection Political environment 1.
Nature of political system, ideological factors of ruling political party 2. Political structure – goals and stability 3. Political processes – operation of the party, elections, funding of elections 4. Political philosophy, government’s role in business, its policies and interventions in economic and business development Socio – cultural environment Environmental scanning Factors: Events Trends Issues Expectations Questions typically asked about the environment Sources of information