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Business Environment Analysis: The Complete Guide (2023)

Here’s what you’ll learn today:

  • What is a business environment analysis (and why you need it)
  • The detailed 4-step process to performing a solid analysis of your business environment, so you can build better, stronger and likely more competitive business models .
  • A case study of Blackberry’s business (along with the reasons why it failed)

Let’s dive right in…

What Is a Business Environment Analysis

Now, I want to start with a two-step definition.

The thing is, if you want to perform an analysis of your business, you need to understand a few concepts first.

Business models

“The business model describes a company’s core strategy to generate economic value […] and provides the basic template on how the firm is going to make money” ( source ).

Now, you might think:

Why should I actually perform a business environment analysis?

Well, see, ”business models are designed and executed in specific environments “.

So the secret to being successful in your business is to developing a good understanding of your organization’s environment. Because that will help you conceive stronger, more competitive business models.

“Continuous environmental scanning is more important than ever because of the growing complexity of the economic landscape, greater uncertainty, and severe market disruptions”.

Now, let’s wrap this up:

Business environment analysis = examine the environment in which your own business model functions.

Because let’s face it:

You can’t take the right decisions if you don’t analyze the factors surrounding your business.

And the truth is, many firms pay the high price of failing to grasp these factors. Some of them add their names to the endless list of those companies that didn’t make history.

Like BlackBerry, who demonstrated that even the most powerful market leaders can be blown away in a mater of months for taking the wrong decisions.

Now that you know what a business environment analysis is , it’s time to move on to the process.

Business Analysis Essentials (How to Perform a Solid Business Environment Analysis)

On top of this, I’m offering you a free, editable PowerPoint template to put in action what you’ve read.

Like I said, the way we’re going to approach business analysis today is rooted to the framework provided in the book below.

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers

Your business model environment can be mapped in four main areas.

I’ve summarized each of these areas in the table below so you can quickly understand how things work.

1. Market Forces

The business environment analysis starts with the market forces area.

I’ll explain:

What this area does it to assess the attractiveness, dynamics and challenges of your market. And your customers are at the core of it.

2. Industry Forces

This area is here to help you understand which position your company occupies vs. other companies that produce similar products/services. It’s roughly a SWOT analysis .

Here are the exact questions you shall answer:

3. Key Trends

Sure, no one can be certain of what the future will look like.

However, you can predict the general direction in which your business is developing. Key trends are just about that:

4. Macro Economic Forces

Which large-scale general economic factors can affect your business?

Case study: The Business of BlackBerry (and How They Blew it…)

So how did BlackBerry go from being a premier mobile gadget to getting relegated to the back of the smartphone pack?

Let’s recall the previous steps to quickly assess what happened.

Market Issues

A big change was slowly on its way .

Mainstream consumers were starting to drive the smartphone revolution. BlackBerry kept focusing on its primary corporate market (enterprises), ignoring a big chunk of potential end customers.

Industry Forces

BlackBerry overlooked the threat of the iPhone.

The company’s co-CEO Jim Balisillie said at the time , referring to the iPhone’s impact on the industry:

“I would think that’s overstating it”.

Shall I also tell you that Steve Ballmer, Microsoft CEO’s, once said about the iPhone that “it doesn’t appeal to business customers because it doesn’t have a keyboard”?

So as you guessed it, BlackBerry allowed Apple to be laser-focused on the general-use smartphone market, while continuing to sell his products to business and government customers.

First, the emergence of the “app economy” drove massive adoption of the iPhone and Android-based devices. Second, smartphones’ functions evolved from communication devices to full mobile entertainment hubs.

And here’s what happened:

Blackberry didn’t anticipate that trend. AT ALL.

The Free Business Template

About 50% of new U.S. companies fail in their first five years .

Most of them dramatically fail at understanding the external forces impacting their business.

To create a competitive business model that works in your  environment, you must be able to understand your business surroundings and how they’re likely to evolve in the future.

Of course, the future it’s uncertain but it’s possible to develop consistent strategies that are aligned with your environment and competitors.

Continuously scan your business model’s environment and map the changes happening in it. You’ll be able to make more informed decisions, which will consequently lower the risk of making big, rookie mistakes.

Like I said earlier, the steps outlined in this post come straight out from Business Model Generation . It’s a fabulous guide that helps you build, pivot, and challenge your own business model.

So if you’re into creating more value for your customers, gaining a competitive advantage over your competitors, I believe you should check it out.

With that said, I hope you liked the post you just read!

Additional Resources

  • How Airbnb built a rock-solid business model
  • A free, editable PowerPoint business model canvas
  • My favorite resources

How to Make Gorgeous Presentations When You Have No Time, No Budget (And No Design Talent)

Know that feeling when you have to design that slick and professional presentation – for your boss, a high-stake client or even investors – but you have no time and budget to make it?

The thing is, these slide decks are key pieces for managing your business: sales meetings, marketing strategies, business plans, and so on.

But let’s be real, you’re not a designer (neither am I), and unless you have natural talent at crafting amazing business slides, it can be really tough to put together presentations that impress and deliver more than you promise.

Meet Marketofy, The Ultimate Multipurpose Business Template

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That’s right:

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Because everything you need – unique, easy-to-edit slides, beautiful icons, graphics and so much more, will be stored in one giant folder patiently seating on your computer’s desktop.

You’ll make slick, professional presentations AND save a huge amount of time because you’ll be able to create presentations using templates that are just waiting for you to turn them into powerful, top-tier business materials.

Here, Just Have a Look at Some of these Screenshots

Clean and modern slides. Who said data charts had to be lame?

By now, you understand why presentation templates can help you create high value decks in a fraction of the time it takes others (Just imagine the look on your colleagues’ face when you start revealing your slides at the next meeting…)

And guess what, you can get these templates like Marketofy for the less than the price of a movie ticket (or a lobster roll, if you prefer). That’s basically less than $20 for…

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See Marketofy template here

See more presentation templates here

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Home Blog Business How To Create a Project Presentation: A Guide for Impactful Content

How To Create a Project Presentation: A Guide for Impactful Content

Cover for how to create a project presentation

Corporate, academic, and business meetings share one common factor: successfully delivering project presentations. This is one skill professionals should harness in terms of articulating ideas, presenting plans, and sharing outcomes through an effective project presentation.

In this fast-paced reality where new tools and frameworks make us question the human factor value, we believe there’s much to be said about how working towards building presentation skills can make a difference, especially for making a project stand out from the crowd and have a lasting impact on stakeholders. We can no longer talk about simply disclosing information, the manner in which the narrative is built, how data is introduced, and several other factors that speak of your expertise in the subject.

This article will explore the art of project presentation, giving insights to presenters to deliver a memorable project plan presentation. Whether you are new to this experience or a seasoned presenter, this article promises to give you valuable information on how to build and present a project presentation that resonates with your target audience and will convert into your expected results for the project. Let’s get started.

Table of Contents

  • Who is the audience of a project presentation?

Executive Summary

Project overview, the project process model, the project scope, the project resources, the project roadmap, the project activities plan, the project risks, quality control, project execution and monitoring.

  • The Project Team

What Is a Project Presentation?

A project presentation is a business activity that brings together stakeholders and team members to oversee a project from execution to completion. During a project presentation, one or two people present a document or slide deck with an overview of all the project’s details.

During a project presentation, the project manager highlights key data about the project initiation and planning activities, like the project scope, requirements gathering, a deliverable list, timelines, and milestones.

The first instance of a project presentation is right before the execution of the project itself. Then, during the project process life cycle, you present it again with timely updates and news about the progress.

Who is the audience of a project presentation? 

A project-related audience is made up of stakeholders – all individuals and entities that affect or are affected by the project’s existence.

Discuss the project presentation with team members that’ll work on the project so they know what’s at stake and what’s expected of them. They’ll need information like requirements, the roadmap, the work breakdown structure, and deliverables.

Stakeholders

Present your project to the stakeholders that can authorize resources and expenditures. Show them how the project will offer the solutions they want under the conditions they impose in a set amount of time. 

Stakeholders want to know details like project scope, budget breakdowns, timing calculations, risk assessments, and how you plan to confront these risks and be ready for changes. 

The Structure of a Project Presentation

Project presentations follow a standard structure covering all critical elements. Follow this guideline to ensure that you cover everything with the slides, the speech, and the discussion.

In the next section, we describe a project presentation structure you can build with SlideModel templates or working with our AI PowerPoint generator . As you will see, most sections in the structure are summaries or overviews of project management practices completed during initiation and planning. 

At the start of your presentation, add an executive summary slide . This section is meant to welcome the viewer to the presentation and give an idea of what’s to come. To differentiate your executive summary from the project overview that comes right after it, use the opportunity to place the project into context. 

In an executive summary , show how this particular project fits into the overall strategy for the company or the section it belongs to. If, for example, your project is about TikTok Marketing, offer information as to how it fits in the overall marketing strategy.

Continue the presentation with a project overview to show the audience what to expect. This section covers one slide or a combination of slides depending on the layout. The project overview slide serves as the introduction to a project presentation and what’s inside.

Include these items:

  • An Introduction with a brief background about the project. 
  • A short explanation of the project’s objectives and completion goals.
  • A quick overview of the timeline with start and end dates.

Project Overview representation in a Project Presentation

The project life cycle is the series of phases that a project goes through from its inception to its completion. The project process model is the group of knowledge areas, processes, and their relationships that will guide the activities along the project lifecycle. The next slide should display the chosen project process model and explain how it’ll be carried out along the different lifecycle phases. Project process models examples include Waterfall, Scrum, and V Model for software development, and Business Process Modeling Notation (BPMN) and Swimlane for general business-related projects.

Process models are important for the team to understand execution processes. Stakeholders need to see the process model to understand the systematic process of activities and how long they will take. 

Use one slide for the model, show only high-level components, and offer details during the presentation if the audience asks for them.

The scope is a crucial element of any project and needs its own section in the presentation. The scoping process begins with requirements gathering and includes the creation of a work breakdown structure , an analysis of what’s in and out of scope, plus validation and scope management plans. 

One or two slides are enough to highlight key scope details in a dashboard-style layout mirroring the information on your project scope statement. Preferably, place the scope slides towards the start of the project presentation close to the process model and project resources.

Stages of a Project Scope

Every project needs resources, and that assessment must be included in the project presentation as well. In a general sense, all resources are what make up the overall budget for the project. In turn, you’ll need to show a budget breakdown that shows high-level resources.

Like many aspects of a project presentation, what you include depends on the industry you’re working for. Construction projects use constructors, materials, machinery, etc. Software projects use programmers, designers, software licenses, computers, etc.

Budget breakdown slide in a project presentation

Time is the main resource of any project. During project planning, the project management team estimates the required effort needed to complete the defined scope. Using the Project Process Model, Scope, and Resources, a plan is built. Present a roadmap to highlight the expected time for project completion and where each milestone falls along that line.

Roadmaps can be constructed with an infinite variety of visual layouts, from highly creative and illustrative to structured formats resembling spreadsheets and tables with color-coded roadmaps across the cells. Use one slide to show the roadmap highlighting time estimates, constraints, and projections. For updated project presentations, mark where the project is on the roadmap at that particular moment in time.

Project roadmap

Every phase of the roadmap is broken down into action plans . Action plans list activities, their duration, allocated resources (human, material, and financial), and the relationship between activities.

Present your project activities plan with a Gantt Chart and a Costs Report. The Gantt Chart will show the activities to execute, how long they will take, and who (person or team) will be responsible for them. The costs reports will show how much the execution of activities will cost.

During the presentation, you’ll spend the most time on this section, as this is when and where your entire plan is outlined. To show more detail than the roadmap overview, use a few slides to show specific sections of the main Gantt chart and show key activities per phase or milestone.

Project activities plan

All projects present risks, and to control them, they must be identified, assessed, evaluated, and mitigated . Visualize your risk assessment with a risk matrix and include it in the project presentation. 

Use this slide to explain to stakeholders how you plan to mitigate the identified risks. Share with team members what’s expected of them in order to keep the risks under control. Risk management is a critical component of project management and something stakeholders will always be looking at.

Risk matrices formats

Controlling the quality of project deliverables is critical for positive project outcomes and continued success with the deliverable. This process is called quality control or quality assurance.

The project process model includes which quality control techniques the team will use and when. Some quality assurance (QA) techniques include statistical process control (SPC), Six Sigma, ISO 9000, and Total Quality Management (TQM). Use one slide to visualize the process and your plan to execute it.

Once the project starts, the project plan is a living entity and evolves over time. This section will need to be regularly updated with progress reports, performance KPIs, and status updates.

Across these slides, explain how activities will be monitored and deliverable outcomes measured. Show exactly how you will determine if the project is on course or has deviations. Visualize all execution activities with a Gantt chart to show the current progress. Use big numbers and data points to highlight performance metrics. Use a comparison slide to visualize the completeness percentage vs. planned progress and budget consumption vs. planned budget.

Explain all monitoring activities for the execution phase using a calendar or schedule that shows on what days activities will take place and who is involved.

business environment project ppt

The Project Team 

When presenting a project, include a stakeholder map to describe the management team, the sponsors, the main stakeholders, and the implementation team or teams. Depending on the size of the project, this will be an org chart or multiple org charts across a few slides.

Why is it important to present the project team to the stakeholders and vice versa? So that everyone involved knows the other parties and their responsibilities.

Another use for the team slide or slides is to present the next person who will speak during the project presentation. This gives the audience some background on that person’s role in the project.

Visual org chart of the project team

Case Study – Project Presentation Example

Using the structure we present above, we outlined a case study of a realistic project and how the project manager puts together the project presentation using SlideModel templates. The project presentation example is based on a complex project of building a bridge (Cline Avenue Bridge). For the educational purpose of this article, we are not delivering all the elements of the project presentation, as it is out of scope. Still, we illustrate the more representative slides of each section, show how to prepare a PowerPoint Presentation for a project and how simple it is to adapt the templates to the content that needs to be presented. As a disclaimer, all information we present is an adaptation and reinterpretation of the real project, modified by SlideModel to fit the use case learning goals. This information and presentation should not be considered a source of information related to the Cline Avenue Bridge Project.

In this slide, the presenter summarises the project highlights in a project charter style. The Project Manager can extend this introduction all over the project lifecycle, and the speech can jump from different knowledge areas without the need to change slides or get deeper into details. Specifically, in the Cline Bridge Project, the objective is narrated, the location is just mentioned and linked to a map for further details, and a set of important facts are presented (Building Information Modelling Process, Budget, Duration, Sponsor, and Constructor). Key Highlights of the final deliverable are listed (Segmental Bridge, Material Concrete, 1.7 miles of length and 46 feet of width)

Project Presentation Project Overview Slide

Process Model

The Process Model slide illustrates the framework for the project lifecycle, processes, planning, and execution. In this slide, the Project Manager will describe the model and how it is tailored to the specifics of the project. In this case, for the development and construction of the Cline Bridge, the builder has defined the use of BIM (Building Information Modelling) as the process model. During this slide, the presenter can describe the lifecycle phases (Design, Production, Construction, Operation, and Planning) and drill down one level over the knowledge practices involved. For example, the initial stage consists of “Design”, which has two main knowledge areas, Conceptual Design, and Detailed Design. The project manager is able to explain this definition without the need to outline detailed processes and activities within them.

building information modelling project process model

The Scope section of the presentation generally involves several slides, as the content layout is a list of “requirements.” Based on this fact, a table layout is suggested to make good use of space. It is important to avoid abusing the “list” and present the group of requirements rather than specific requirements. Otherwise, the project manager ends up transcribing the requirements document.

In this project presentation example, we present 10 groups of requirements traversing different stages of the project lifecycle. 

  • Design Standards: Bridge design must comply with local, national, and international design standards, including relevant engineering and safety codes
  • Load Capacity: The bridge must be designed to safely carry a specific maximum load, which would include the weight of the bridge itself, traffic, pedestrians, wind, and other factors.
  • Seismic Design: The design must account for seismic loads. 
  • Aesthetic Design: The bridge must be designed to meet certain aesthetic criteria aligned with the artists and architects.
  • Accessibility and Use Requirements: Requirements for pedestrian walkways, bike lanes, vehicle lanes, load restrictions for vehicles, clearance heights for boats if over a waterway, etc.
  • Regulatory Approvals: The project must secure all necessary permits and approvals from relevant local and national regulatory bodies.
  • Environmental Impact: The project must take steps to minimize its environmental impact during construction and the operation of the bridge, including implementing erosion and sediment controls.
  • Materials Simulation: Materials should comply with regulations and usage expectations for current and future expected requirements.
  • Site Preparation: The project must include preparation of the construction site, including any necessary land clearing or grading.
  • Foundations Construction: Foundations will need to support materials weight and traffic expected for the next 30 years.
  • Site Acquisition: Acquire site and terrain for building and logistics.

build bridge project presentation scope slide

Building a bridge involves a high level of resource usage. In an executive meeting of a project presentation, the recommendation is to structure this section as a Financial table with only one level of detail. Further details are delegated to specific resources and cost analysis presentations.

The resources list presented is:

  • Professional Services
  • Construction Labour
  • Quality Assurance
  • Contingency
  • Waste Disposal and Cleanup
  • Subcontractors

In order to break the style of table after table during the project presentation, we suggest using visual elements as icons and colors metaphorically related to each of the elements listed.

project presentation resources slide template

Project Roadmap

As explained earlier in the article, the project roadmap serves to offer a comprehensive overview of the significant milestones that will happen over the course of time. Given the magnitude of a bridge construction project and its prolonged duration, it is advisable, particularly for such extensive endeavours, to present a roadmap that aligns milestones with corresponding lifecycle phases in a discernible manner. This approach enables the audience to mentally envision the sequential progression of the construction process.

Aligned with previous slides, in the example we created a roadmap with the following high level milestones, and sub componentes:

  • Project Budgeting and Financing
  • Land Purchase & Renting
  • Conceptual Design
  • Detailed Design
  • Access Routes
  • Waste Disposal
  • Simulations
  • Materials Tests
  • Seismic Tests
  • Fabrication
  • Preparation of Modular Pieces
  • Build and Assembly
  • Test under Acceptance Criteria
  • Stress Test
  • Operation and Maintenance

As you can see, the Project Manager decided over a sequential roadmap, presented with little detail in timings, with start and end dates to picture dimension over the diagram.

project roadmap template case study build a bridge

Action Plan

In the bridge construction project of the example, there will be plenty of activity plans. All along the project several of these slides will be created and updated. The most suitable option for presentation tasks, durations, precedence relationship and resource allocation is the Gantt Chart Template. We present the first Quarter of the project, over the Conceptual Design Activities. 

As displayed in the PowerPoint Slide , the subtitle clarifies the number of slides that will be used for this purpose.

The activities presented are:

  • Site Analysis
  • Feasibility Analysis
  • Design Concepts
  • BIM Model Creation
  • Model Revision
  • Environmental Impact
  • Present Design

action plan conceptual design project presentation

Project Risks

Risk management is an iterative process all over the project life cycle. When presenting your projects, the risks will vary depending on the progress over the roadmap. For this specific example we decided to present the risks being discussed during the Ideation stage, where the developer is exchanging risks with contractors and the company that will build the bridge.

Our suggested layout for this kind of information is a simple table, where the risks are clearly readable and visible, while the description is a hint for discussion rather than an in depth explanation.

It is very important to classify the presented risks, at least with two dimensions; “Impact” and “Probability”. This will generate quality conversations around them. 

Outlined Risks during the Initiation Phase:

  • Design Errors
  • Construction Delays
  • Budget Overruns
  • Regulatory Changes
  • Site Conditions
  • Equipment Failures
  • Health and Safety Incidents

As the reader can spot, the risks outlined, are very high level, and each of them will trigger specific Risk Analysis Reports.

project presentations risks outline slide powerpoint template

The quality control section of the project presentation may vary depending on the quality process adopted. For large scale companies with a uniform portfolio of projects , it is common to see a continuous improvement quality model, which iteratively builds quality over the different projects (for example software companies) For construction companies like the example, the situation is not different, and the quality control model is aligned with the specific building process model. In this specific case, the project manager is presenting the quality control process to be applied over the BIM model and the Quality Control process to be followed for the physical construction of the bridge:

project presentation case study quality control BIM process model

Execution and Monitoring

During the project, several status meetings will be carried out. During the project presentation the manager can establish the pattern to be used along the project.

For this example, we set a basic progress dashboard where the project manager can present : 

  • The current timeline
  • Top 5 issues
  • Current Burndown
  • Top 5 risks.

project presentation case study PowerPoint dashboard

The art of project presentation goes beyond listing data in random slides. A project presentation is a powerful tool to align stakeholders and foster an environment of trust and collaboration over factual information.

With a structured approach, all members involved in the project design and execution can understand the direction that’s being taken and the importance behind certain decisions. We hope these insights can turn your project into a powerful presentation that inspires and deliver results.

business environment project ppt

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project work on business environment

PROJECT WORK ON BUSINESS ENVIRONMENT

Jan 06, 2020

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PROJECT WORK ON BUSINESS ENVIRONMENT. CONTENTS 1.1 Introduction 1.2 Factors of Business Environment 1.3 Environment of Business 1.3.1 Internal and External Environment of Business 1.3.2 Economic and Non-economic Environment of Business and its Importance. 1.1 Introduction

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CONTENTS 1.1 Introduction 1.2 Factors of Business Environment 1.3 Environment of Business 1.3.1 Internal and External Environment of Business 1.3.2 Economic and Non-economic Environment of Business and its Importance

1.1 Introduction In common sense, the term business refers to buying and selling of goods. But in modern times, business covers a wide and complex field of industry and commerce involving complex activities related to both production and distribution. All these activities satisfy the diverse needs of the society and also help generate profit of business firms or units. Thus by the term business we mean organized efforts of different enterprise for supplying various goods and services to the ultimate consumers for a profit. Business, in nutshell, includes diverse activities related to production, marketing, transport, trade, finance, banking, insurance, advertising and some other activities connected with industry and commerce. One thing is common, i.e., all these activities are conducted as well as motivated by profits. Moreover, all these activities must be conducted within the existing legal framework. Violations of which must be excluded from business activity.

1.2 Factors of Business Environment Total environment of business is consisting of six factors which are as follows: Economic Environment: Economic development includes all those forces which have an economic impact on business. Accordingly, total economic environment is consisting of agriculture, industrial production, infrastructure, planning, basic economic philosophy, stages of economic development, trade cycles, national income, per capita income, savings, money supply, price level and population. Business and economic environment is closely related. Business usually collects all its required inputs from the economic environment available and also absorbs the output of business units. Politico-legal Environment: It includes the activities of three political institutions such as legislature, executive and judiciary which usually play useful role in shaping, directing, developing and controlling business activities. The legislature takes decisions on a particular course of action, the executive implements those decisions through government agencies and the judiciary serves as a watch-dog for ensuring public interest in all the activities of legislature and executive. In order to attain a meaningful business growth a stable and dynamic politico-legal environment is very important.

Technological Environment: It is exercising considerable influence on business. Technology implies systematic application of scientific or other organized knowledge to practical tasks or activities. Business makes it possible for the technology to reach the people in proper format. As the technology is changing fast thus businessmen should keep a close look on those technological changes for its adaption in their business activities. Global or International Environment: Global environment is playing an important role in shaping the business activity. With the liberalization and globalization of the economy, business environment of an economy has become totally different when it has to bear all shocks and benefits arising out of global environment. Natural Environment: It also influences business in a diverse way. Business of modern times is also dictated by nature. Natural calamities like floods, droughts, earthquake etc affect the business activities in a worst manner. Socio-cultural Environment: It is also influencing the business environment indirectly. These includes people’s attitude to work and wealth, ethical issues, role of family, marriage, religion and education and also social responsiveness of business. Social and cultural environment also influences the demand for variety of goods and the type of employees the industry require. Moreover, the obligation of business to society also depends on the cultural milieu in which the firm is operating.

1.3 Environment of Business The term business environment indicates all external forces or factors which have a direct ir indirect bearing on the activities related to functioning of business. However, the term business environment is also being used in a broad sense. Thereby, it includes both internal and external environment of business. Again external environment is also divided into micro environment and macro environment. These aspects are analysed in the following manner: 1.3.1 Internal and External Environment of Business Internal Environment: Internal environment of business includes physical assets, technological capabilities, human, financial and marketing resources, management structure, relationship among various constituents, goods, objectives and value system prevailing. External Environment: External environment of business is composed of various organizations, institutions and forces operating outside the company, which exert influence individually and collectively as well on this environment. External environment of business is broadly is broadly classified into micro environment and macro environment.

Micro Environment: It includes those players whose decisions and actions have a direct impact on the company. Production and selling of commodities are the two important aspects of modern business. Accordingly, the micro environment of business can be divided. Input suppliers and workers along with their union are exercising influence on production and they are considered as prominent performers in the micro environment. Moreover, sales operations of the business firm are affected by its customers, markets intermediaries and competitors. Micro environment has a great relevance from the context of company’s business operations. Different players in the micro environment normally do not affect all the companies of a particular industry in a similar way. However, sometimes micro environment of the various firms of an industry remains almost same. Macro Environment: Another constituent of business environment in the macro environment which includes all those economic and non-economic factors which exerts its influence on the business activity in general. Considering the business point of view, the role of macro environment may be both positive and negative.

1.3.2 Economic and Non-economic Environment of Business and its Importance Macro environment of business is broadly classified into economic and non-economic environment of business. Modern business conditions are largely influenced by both economic and non-economic business environment. In order to initiate various economic activities for attaining economic development of a country, both economic and non-economic environment business environment and its various constituent elements are analysed in the following manner: Economic Environment of Business Environment and its Importance Economic environment is playing an important role in mobilizing the business enterprise towards its right direction. Some of the important constituent elements of economic environment of business are as follows: Economic System: By economic system we mean the legal and institutional framework within which various economic activities are undertaken. Various economic activities like production, consumption, exchange distribution and economic growth are all guided by institutional framework which includes laws, customs and social institutions of a particular country. At present there are three types of economic system prevalent in this world. These are- capitalism, socialism and mixed economy.

Macro-economic scenario: Macro-economic scenario of a country determines the prospects of business to a large extent. A healthy environment supported by rapid growth, high rates of saving and investment, stable price level, fiscal stability and favourable balance of payments, always opens a bright prospect of business growth in a country. Business Cycle and Stagflation: Economic environment of business is also influenced by ups and downs or cyclical fluctuations in business activity. Prosperity and recessions are the common phases through which the capitalist economy passes through periods. Financial System: The economic environment of business is also influenced by the efficacy of the financial system. Banks and non-banking financial institutions are an important source of fund for the corporate sector. The level of development of the financial system is having a crucial importance in business. Economic Policies: The government of a country has to formulate different economic policies. All these economic policies can be classified as industrial policy, monetary policy, trade policy and fiscal policy. All these economic policies of the government are playing a significant role in determining the economic environment of business of a country.

Non-Economic Environment of Business and its Importance Non-economic environment is as important as economic environment for influencing for influencing the business activity of the country. All non-economic issues related to business are included in non-economic environment of a country. The non-economic environment of business can be classified broadly as Politico-legal Environment: In modern times, politico-legal environment is having a paramount importance in business. The politico-legal environment includes three political institutions such as legislature, executive and judiciary which usually play useful role in shaping, directing, developing and controlling business activities. Demographic Environment: It is also an important constituent of business environment. Accordingly,, demographic factors like, rise and growth rate of population, age and sex composition of population, rural urban distribution of population, educational levels, religion, ethnicity, caste, language etc are all relevant to business conditions.

Socio-Cultural Environment: These includes people’s attitude to work and wealth, ethical issues, role of family, marriage, religion and education and the social responsibilities of business. All the business firms usually operate in a definite socio-cultural environment and they have to formulate their business policies considering this factor. Technological Environment: It is an important element in business environment. Technology implies systematic application of scientific or other organized knowledge to practical tasks or activities. Natural Environment: Suitable natural environment is also an important component of non-economic environment of business. Thus the business environment in the country also needs a natural support which includes suitable climate, balanced weather, suitable natural environment i.e., free from flood and drought etc. Moreover, the maintenance of eco-friendly atmosphere is also quite important for the promotion of developmental activities in an economy

REFERENCE: DHAR P.K. DHAR PARIJAT: BUSINESS ENVIRONMENT KALYANI PUBLISHERS= NEW DELHI- 2012

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