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Business Environment and Market Research Unit V

The document discusses the business environment and market research. It defines key terms like competitors, competition, idea, market research, market share, and customers. It also outlines the internal factors of a business like employees, suppliers, and other business organizations. External factors include social, technological, economic, legal, seasonal, and sources of business funds. Conducting a SWOT analysis can help identify strengths, weaknesses, opportunities, and threats to guide business decisions.

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Mam Lorna Es Gee
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29 views

Business Environment and Market Research Unit V

The document discusses the business environment and market research. It defines key terms like competitors, competition, idea, market research, market share, and customers. It also outlines the internal factors of a business like employees, suppliers, and other business organizations. External factors include social, technological, economic, legal, seasonal, and sources of business funds. Conducting a SWOT analysis can help identify strengths, weaknesses, opportunities, and threats to guide business decisions.

Uploaded by

Mam Lorna Es Gee
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Business Environment

and Market Research


Unit V
“ A thousand-mile
journey begins with
but a single step.”
Terminologies
 Competitors

Businesses which are selling the same product as


your business or which provide the same service

 Competition

Rivalry amongst similar businesses to obtain the


largest share of the consumer market
Terminologies
 Idea

Mental impression, concept or plan or an


intention, purpose or feature

 Market Research
The gathering of data about the market size,
consumer buying habits and competitors.
Terminologies
 Market Share
The percentage of total market held by a business.

 Customers / Consumers
People who have needs that they want satisfied and
who have the financial means to satisfy them. A
person who purchases or uses a product.
R S R
M E E
O T H
S T O R G
C U O
BUSINESS ENVIRONMENT
s ss
i o n s i ne s
c i s B u i on
d e e r at
O p
SWOT ANALYIS
 The SWOT ANALYSIS Tool will guide you in a
identifying the best opportunity. It is a step-by-step
analysis that enables the entrepreneur to check the
chances of success that a business will have in the
market.
 This will enable him or her to reach a decision as to
whether to start a particular business in a given
market or not.
STRENGTHS
 These are the things, features and qualities that put
the entrepreneur’s products at an advantage when
compared to those of competitors.
WEAKNESSES
 These are the limitations / constraints that the
business products face in the market.
OPPORTUNITY
 These are the external possibilities or chances that
may happen and benefit the business.
THREATS
 These are also external factors over which the
business has no control but which will have a
definite influence on your business operations.
Business
environment
Components of the Business
Environment
 Internal factors
 Consists of different types of stakeholders

 External factors
 Consists of factors which are beyond control of the
business
Customer
Internal factor

s
 People who will buy the products offered by a business.
Because your business is about customers and their
needs, it is important to know what they want and how
these needs could change.
Internal factor

Suppliers Other business


organizations where the entrepreneur will get his
goods (to sell or render services) or raw materials
needed to make the goods. When suppliers offer
credit to an entrepreneur they become
his or her creditors.
Suppliers
The success of a small business partly depends on a
supplier’s ability to provide:

 reasonable prices;
 good quality raw materials or products; and
Internal factor

Employees
The workers employed in
the business. As the
owner of your business,
you have to motivate your
employees so that they
will produce quality
products and/or services.
Employees
You have to ensure that the workers are paid
according to market standards and that they are
happy in the work environment.
Internal factor
 Business organizations that provide the same
product as your business.
 Customers buy from your business because
they have specific needs.
Your competitors are businesses
who can meet the same needs.
You have to draw
customers in some way
to your business.
Internal factor

Government
 The government is one of the biggest consumers in
the country. The government spends a lot of money
on tender contracts; a way to invite businesses to
put in offers to do a job.
Internal factor

Government
The government also has certain rules and
regulations that must be followed.
External factor

These factors will determine which customers to


target.
Social and cultural factors
Technological factors
External factor

These factors are trends, innovations and


availability of technically qualified labour. All
these will affect the business’s opportunities.

Technological factors
External factor

Businesses use technology to produce what the


customer needs. Technology consists of
machines, knowledge, and methods
(techniques).

Technological factors
External factor

Economic factors
These factors include demand and supply
forces in the target market,
consumer trends, economic preferences of
the community and competitors.

Economic factors
External factor

Economic factors
Other factors like interest rates and inflation can also
affect your business.

Inflation occurs when prices increase, which in turn


lead to a drop in the value of money or a reduction in
the purchasing power of money.

Economic factors
External factor

These factors determine the stability and security of


the community or a country, thereby making it
possible or impossible for
businesses to operate or
a specific business
to be set up.
External factor

Legal factors These are the laws


that are used to regulate businesses, legal restrictions
that are placed on some types of businesses, the
forms of enterprise that you can
start, contract laws and
restrictions on business operations.
Seasons or climate

Different types of seasons can have a big impact on


business operations or on those that are about to
start. Selling a product in a relevant season will
increase sales of that particular product.
External factor

Sources of business funds like commercial banks and


microfinance institutions, the amount they are willing
to lend, the loan period
and the interest rate are all
factors that will play a role in the
size of your business
and determine whether you will be able to start one at all.
Since environmental factors are constantly
changing, it is important that you keep a
close watch over them.
As the environmental factors change, so do
the chances of the business
being successful or not. 

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