Business Environment Analysis Report: Factors and Models

This report provides a comprehensive analysis of the business environment, covering key models and factors that influence business operations and performance. It begins with an overview of the business environment and proceeds to examine the PESTLE analysis, which assesses political, economic, social, technological, legal, and environmental factors. The report then delves into the micro factors influencing business operations using Porter's Five Forces model. The SWOT model, analyzing strengths, weaknesses, opportunities, and threats, is used to evaluate the internal business environment. The document also explores the importance of internal factors like organizational structure, culture, employees, and resource availability. Overall, the report aims to provide a clear understanding of how companies can analyze their environment to gain competitive advantages and improve their performance.

THE BUSINESS
ENVIRONMENT

TABLE OF CONTENT
 Business environment
 Pestle analysis
 Micro factor
 Porter five force model
 SWOT MODEL
 Internal business environment

BUSINESS ENVIRONMENT
 Business Environment refers to various internal and
external factors of environment that impact on
operation and productivity of business.
Company by analysing business environment is able to
gain competitive advantages and earn maximum
amount of profitability.
 Pestle Analysis
 It is powerful tool that is used by company to
analysis Macro environmental factors that impact on
company operation such as social, economical,
technological, political and environmental. Such as

PESTLE ANALYSIS
 Political Factor: It refers to policies, rules and regulation that are formulated
by government for effective operation of business. Every company need to
follow government rules in order to avoid penalty and legal charges.
 Social Factor: Customers preference and need keep on changing so
companies need to identify all such factors in order to grow and sustain in
competitive environment.
 Economical Factor: It included various factors such as disposable income of
customers, interest rate and level of education, demographical structure of
particular country. Therefore all such factors impact on investment,
availability of human resource and capital to run and mange business.

MICRO FACTOR
These are smaller factors that directly
interact with business therefore Porter
model helps in analysing micro factors
that affect firm operation and
productivity in the industry.
Customers, supplier, competitors and
employees are some of the micro factors
that impact on company operation.

PORTER FIVE FORCE MODEL
 Existing Rivalry: It explained about level of competition in particular
industry by analysing number of existing company and various products
and services they offer to customers.
 Threat of new competitors: It state that entrance of new competitor with
industry impact on overall performance of business. High threat means
companies can easily enter into market with limited capital and resources.
 Power of consumer: Customer demand change continuously and there
are large number of companies customers in industries so customers have
more power to bargain thus reduce profitability and sales volume of firm.

INTERNAL BUSINESS
ENVIRONMENT
 Various internal factors of business also affect on sales
and productivity of company such as organisational
structure, culture, employees and availability of resource
and capital for smooth operation of business . Swot
Model can be used to analysis internal environment such
as capabilities, strength, and weakness of company that
helps in effective utilisation of available opportunities in
the market. Therefore Swot model is as follows:

SWOT MODEL
 Strength: Company strength may lies in quality
of products and services it manufacture in order to
satisfy their needs and wants of customers.
Therefore strength is capabilities of company that
helps in growth and expansion of business.
 Weakness: Company may have various weakness
such as limited resource , ineffective management
so company need to find ways in which it can
effectively grow and sustain in the market.

REFERENCES
 Jeong, Y. S., 2017. A Study on improving
manufacturing environment using IoT technology in
small business environment. Journal of Convergence
for Information Technology, 7(2), pp.83-90.
 Neneh, B. N., 2016. Market orientation and
performance: the contingency role of external
environment. Environmental economics, 7(2). pp.1-
14.
 Daniluk, A., 2017. Cooperation between business
companies and the institutions in the context of
innovations implementation. Procedia
Engineering, 182. pp.127-134.