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Let us know the micromanagement and macro environment ; understand the competitive environment Describe the Porter’s five-force model and its limitations.

2 Strategic Management for Chartered Accountants “Environment factors of constraints are largely if not totally external and beyond the control of individual industrial enterprises and their arrangements. These are essentially the ‘givers’ within which firms and their managements must operate in a specific county and they vary, often greatly from country to country”. Barry M.Irishman and Melvyn Cope “The environment includes outside the firm which can lead to opportunities for or threats to the firm. Although, there are many factors, the most important of the sectors are socio – economic, technical, supplier, competitors, and government”.

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Glue and Couch “Analysis is the critical starting point of strategic thinking’ Kinetic Omaha “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”. Charles Darwin “Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it”. D.Also this book reviews various issue like business environment and components of business environment, competitive environment, Porter’s five ores model, business policy and strategic management, major tasks in strategic management, vision and mission and objectives of the strategic enterprise, strategic analysis in terms of soot analysis, tows matrix, portfolio analysis, strategic planning, marketing, financial production, logistics, research and development and human resources strategy formulation, implementation and control and achieved the strategic edge for the purpose of clarifying the concept and placing it in this context.In this chapter, we shall discuss about the business, major objectives of business like survival, stability, Roth, efficiency and profitability, environmental influence to business, environment analysis, characteristics of business environment, components of business environment, to know the relationship been the organization and its environment, the micro and macro environment and its 3 elements like customers, competitors, organization, market, suppliers, intermediaries, demographic, economic, government, legal, political, cultural, technological and global environment impact on business.Companies how to enter into global market, its manifestation trends, strategic response to equines, Porter’s competitive and five forces model analysis for business enterprises in industry, commerce and services sector.


The term ‘typically’ refers to the development and processing Of economic values in society. Normally, the term is applied to portion of economic activities whose primary purpose is to provide goods and services for society in an effective manner.

It is also applied to economics and commercial activities of institutions which having other purposes. Business principally comprises of an all profit seeking activities of the organization which provide goods and services that are necessary to economic system. It is the major economic pulse of a nation, striving to increase society’s standard of living. Finally, profits are a primary mechanism for motivating these activities. Business is in any organization which makes distribution or provides any article or service to the customers, who are belonging to members of the society.Business may be satisfied customers needs for these purpose customers are able and willing to pay for it. Business may be defined as “the organizes effort by individuals to produce goods and services to sell these goods and services in a market place and to reap some reward for this effort. ” Functionally, we may define business as “those human activities which involves production or purchase of goods with the object of selling them at a profit margin”.

; The term business refers to the state of being busy for an individual, group, organization Or society.It is also interpreted as one’s regular occupation or profession or economic activities. ; It deals with particular entity, company, organization, enterprise, firms or corporation. ; It also interpreted as particular market segment sector like computer business and it included under term business. ; It is wide and willing to use different activities It consists of purchase, sale, manufacture, processing, marketing of products, services like manufacturing, trading, transportation, warehousing banking and finance, insurance and advertising etc.

It is clearly stated that all business activities main purpose is to earn profit.Profit as a surplus of business and It accrues and distributed to the owners 4 of the business. Business has to pay wages to workers who works in the business. People invests money in business due to getting a retain. Retain is profit from the business. This is awarded to investor due to be taking the risk. Profit is the motive for the investor who serves, runs business and it is the stimulation effort of the business for growth, survival of business.

Profit Is A Main Motive Of Business ; For every kind Of business organization, profit is often regarded as motive for the entrepreneurs and it measure the overall performance of the business. ; Profit is the tool for measuring and evaluation of the business efficiency and productivity at the managerial competence. ;It is helpful to strategic managers how to take well decisions and actions which are turn into effective in the form of able to combine and utilize the available resource and able to sustain the organization with growth and survival of the business entity. Business managers who will take higher efficiency and risk and certainly expect greater volume of the profit from the business entity. ; Business efficiency expressed in terms of percentage of profit to sales volume, to capital employed, to market value of corporate shares. ;Outside investors eager to know the profit of the firm and to make assessment about their commit funds and effective utilization of funds will be in the business entity. Business According to Proof.

R. N. Owens Business is an enterprise engaged in the production and distribution of goods for sale in a market or rendering of services for a price”.Business According to L. R. Dockside “Business is a form of activity pursued primarily with the object of earning profits for the benefit of those on whose behalf the activity is conducted”. Business According to Rick and Hunt “Business is any enterprise which makes, distributes or provides any article or service which other members of the community need and are willing to pay for” Business According to Haney “Buss ones may be defined as human activity directed towards producing or acquiring wealth through buying and selling of goods”.Peter F Trucker has drawn some conclusions about what is a business and what are useful from the business and how to understand the term business.

His conclusions are listed below: 5 ; Business is created and managed by the people. A group of people who will be taken decisions that will be determined either an organization is going to prosper or decline, whether it will survive or will eventually perish in market. This conclusion is true in the business.

; Business cannot be explained in terms of profit. 1. 3


Business is to provide goods and service to the people.It provides the public with the things it needs and wants in order to survive, enjoy life and improve in a material sense. From the point of view of consumer, business is the satisfier of needs and desire of the customer demands which should be provided by business in order to meet people requirements in society.

; Goods that have been produced or procured for sale in retail for price enter the realm of business. This activity of selling results is the creation of the wealth for the society. In satisfying demand, business uses the resources of land, labor and capital.These resources when taken separately have little value; but business combines structures and refines the resources to produce to the value of the society.

Further, business employees’ people who exchange their talents for wages and salaries. Therefore, these people exchange their compensation for the desired goods and service. ; Business is profit seeking activity firm. It supplies goods and services to customers who are satisfy their demand and desire.

It adds to society value by earning of a profit. Profit is the biggest stimulus for maintains the survival of the business and its future development.Society has permits business to earn profit as a reward for assuming the risks Of operating a business. ; Business is also an essential participant In society. For satisfying society demand which supplying goods and services and earning profits. Business involves the most fundamental activities of the society. As a result, Society has looks to business for something more than products, services and profits. It looks to business for leadership and direction in helping to achieve society’s objectives.

It expects business to assist in the establishment of a better service to the society.


Business includes the total enterprise of the country. Business activity has two branches. They are as follows: ; Industry ; Commerce Industry In broad sense, industry is the branch of business activity which concerned with raising production, fabrication or possessing of goods and services. In other words, industry 6 is an activity concerned with conversion of raw materials or semi finished goods into finished goods.

Industry provides two types of goods namely consumer goods and Industrial goods. Consumer goods are those goods manufactured by industry for ultimate use of a customer.For instance brush, sate, cloth and food products etc. , IndustrialCapital goods are those goods produced and used for further production. For instance machineries, tools and raw material etc.

, Types of Industry Industry is further classified into five broad types. They are as listed below: 1 . Extractive industries 2. Genetic industries 3.

Manufacturing industries 4. Construction industries 5. TerritoryService industries Extractive industry Extractive industry are those industries concerned with extraction of wealth from surface of the earth, soil, forest, water, air etc. For instance agriculture, mining etc.

,Figure 1. : Components of Business Business industry Primary Extractive Fishing Hunting Mining Secondary Genetic Agriculture Horticulture Dairying Fish culture Manufacturing Production Transformation Assembly Commerce Trade Service Domestic trade Aids to trade International Construction Buildings Roads Ra Lilly Tracks Bridges dams, flyovers Canals Banking Insurance Discount Commission Genetic industries Genetic industries are those industries concerned with reproduction and multiplication of plants animals for making profit on their sale.For example, Nurseries, cattle building and poultry farming. 7 Manufacturing industries Manufacturing industries are engaged in the conversation and process of raw material through separation, combination and transformation into finished goods. Such as machinery and plants of all types, iron and steel, sugar, paper, cotton clothe, electrical appliances, zinc ore, paper pulp water power, etc. , Construction industries Construction industries are concerned with the construction of roads, railways, dams, canals, buildings, bridges etc. There are mainly concerned with the manufacture of non-movable items.Territory or Service industries Service industry which produce intangible goods those which cannot be seen r touched included in this category are banking, transport, insurance, communication and services of a professional nature such as lawyers, doctors, dentists, management consultants, advertisers, chartered accountants and engineers, etc.

, Commerce Commerce has been defined as ‘the sum total of those processes which are engaged in the removal of the hindrance of persons (trade), Place (transport and insurance), and time (warehousing) in the exchange (banking) of commodities”.Trade Trade means sale, transfer, or exchange of goods and services, through certain ancillary functions like packing, warehousing, banking, transportation, Insurance, and advertising. Trade may be ; Domestic Trade ; International Trade 1. 5


Business Purpose Business have some purpose. These purpose are listed below: ; It is to create customers clients in market. ; It is create customers for selling of their products and services. ; It is to create market for redline and buying of product and services.

; Customers determine the main purpose Of the business.Customers is the basic foundation of the business and keeps its in existence in the market. ; It is due to be catering to material needs and requirement of the society, individual persons, government institutions, company, firms and enterprise. ; Business is running with in the purview of the legal and general public ; It is ultimate result of an economic expansion, growth and change interest.

Of firm. 8 In general sense, enterprise pursue multiple objectives rather than a one objective. Strategic manager will be identified a set of main business objectives.

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