Introduction AEM1200, to Business Management.
Monday 1/30 The Business Environment
Definition Dimensions
Economic environment Competitive environment Technological environment Social environment Global environment
The setting in which businesses operate.
BUSINESS ENVIRONMENT
Dimensions of the Business Environment
Economic environment
General status of the national and global economy, governmental policies and regulation The drivers of business competitiveness The availability and expected development of tools that businesses can use to become more productive; especially information technology The demographics, values, attitudes, customs, and beliefs characteristic of a population or of subgroups within that population The sum total of the world's economy and of its regional, national, and trading group economies.
Competitive environment
Technological environment
Social environment
Global environment
Economic Environment
Level and expected growth or reduction of economic activity; Government action;
Fiscal and monetary policy. Government procurement. E.g., enforceable contracts. Corruption and accountability.
Economic legislation;
Ethical climate;
Examples of Economic Environment Items
The CEO Bankruptcy Bonus. (2012, January 27). The Wall Street Journal (Eastern Ed.), p. A1, A12
Should executives be rewarded with bonuses if they successfully turn around a bankruptcy?
Fed Sees Low Rates to 2012. (2012, January 26). The Wall Street Journal (Eastern Ed.), p. A1, A2
Low interest rates are incentives for investment and startups.
Should Everyone Be Required To Have Health Insurance? (2012, January 23). The Wall Street Journal (Eastern Ed.), p. R2.
A contentious law deals with a major social, and business, issue.
Competitive environment
Customer satisfaction Speed to - market
The speed at which a new product moves successfully from conception to commercialization
Workforce: quantity and quality
Examples of Competitive Environment Items
Made Better in Japan (2012, February). The Wall Street Journal Magazine. P. 64-71
Is Japan becoming the haven of ultra-realistic American pop culture and European high culture?
Late-Night Sales on a Roll For U.S. Fast-Food Outlets (2012, January 25). The Wall Street Journal (Eastern Ed.), p. B1, B2
Many more people work and play late, and 24-7 convenience is a competitive advantage.
Showdown Over `Showrooms'. (2012, January 23). The Wall Street Journal. (Eastern Ed.), p. B1, B5.
The competition between "brick-and-mortars" and "ecommerce" continues.
The world may soon be profoundly changed by a single object, one which the typical American could buy using a credit card. In June, India's Tata Motors began production of the world's most affordable car: the Tata Nano. Selling for a mere $2,500, the Nano is financially within reach for 500 million Indians. And with 250,000 produced in 2010, this car is the equivalent to the second coming of Ford's Model T. The Nano is poised to socially, physically, environmentally and revolutionize India -- the world's largest democracy, a nuclear power, and a place of vast and underused resources -- and could spark monumental change that ripples across the globe.
UNPACKING THE NANO EXHIBITION Johnson Museum, January 15, 2011 March 27, 2011
Examples of Technological Environment Items
More Drones, Fewer Troops. (2012, January 26). The Wall Street Journal (Eastern Ed.) p. A1, A13
An example of applied information technology and other technologies substituting labor (soldiers). Prime market for new products? New technology to be applied in other areas?
Will Gene Sequencing Soon Be Part Of Your Doctor Visit? (2012, January 26). The Wall Street Journal (Eastern Ed.) p. B1, B2
A whole new area of medical practice (and malpractice?)
Real Bonding With Family Around the TV Via Skype. (2012, January 26). The Wall Street Journal (Eastern Ed.) p. D1, D2
Group video-partying cannot be far away...
Social Environment
Diversity Aging population Rising workers expectations
And rising expectations on workers
Higher ethical and sustainability standards
Examples of Social Environment Items
The Veggie Burger's New Dream: Be More Like Meat. (2012, January 25). The Wall Street Journal. (Eastern Ed.) p. D1, D2
Healthy eating, can it be marketed?
Having a Baby in Year of the Dragon Is Too Lucky to Be Left to Chance (2012, January 23). The Wall Street Journal. (Eastern Ed.) p. A1, A4
Control over reproduction, and a booming industry.
Your Resume vs. Oblivion. (2012, January 24). The Wall Street Journal. (Eastern Ed.) p. B1, B6
It's getting harder to get a job. Also fits Technology.
Global Environment
Globalization
Best place to produce the iPhone: China, hands down; And yet, exports represent 14% of the USA GDP. Catastrophes (ie. Japan earthquake); political and military unrest (ie. the Arab Spring and oil prices); and economic setbacks (ie. the subprime crisis and financial debacle of 2008).
Free trade
Interdependence
Examples of Global Environment Items
Central Banks Diversify Their Arsenal (2012, January 27). The Wall Street Journal (Eastern Ed.), p. A11
How much longer can Central Banks continue their intervention to sustain their national economies, and the global economy to boot?
Shadows Over Growth (2012, January 25). The Wall Street Journal (Eastern Ed.), p. A8
Effects of the Euro crisis on world finance.
End of Era for Japan's Exports. (2012, January 24). The Wall Street Journal (Eastern Ed.), A1, A16
Japan's first annual trade deficit since 1980 shows a clear decline in competitiveness on the part of that country's firms.
External Environment
Remember, even the best managed and funded company cannot prosper unless it has a benign general environment, and it takes advantage of those elements of its environment that will result in a loyal, committed customer and stakeholder base. Finding the right intersection of economic, competitive, technological, social, and global circumstances can determine success.
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