Book 1 Chapter 3: Business Environment Flashcards
Business Environment
Sum total of all individuals, institutions and other forces that are outside the control of the business but may affect its performance
Features of Business Environment
CID RUST
The C in CID RUST
Complexity
The I in CID RUST
Inter-relatedness
The D in CID RUST
Dynamic Nature
The R in CID RUST
Relativity
The U in CID RUST
Uncertainty
The S in CID RUST
Specific & General Forces
The T in CID RUST
Totality of External Forces
Specific Forces
Specific Forces affect individual enterprises directly and immediately in their day to day working
For Example, Investors, Customers, Competitors, Suppliers etc.
General Forces
General Forces have impact on all business enterprises and thus may affect an individual firm only indirectly
For Example, Social, Legal, Political and Technological conditions
Business Environment differs from country to country and even region to region
Relativity
It is very difficult to predict future happenings in the Business Environment
Uncertainty
The Business environment is a complex phenomenon that is relatively easier to understand in parts but difficult to grasp in totality
Complexity
The Business Environment keeps on changing
Dynamic in Nature
Business Environment is aggregative in nature
Totality of External Forces
Different elements or parts of business environment are closely inter-related
Inter-relatedness
Importance of Business Environment
IIT CAP
The I in IIT CAP
Identify Opportunities and getting First mover Advantage
Identify Threats and early warning signals
The I in IIT CAP
Identify Threats and early warning signals
Identify Opportunities and getting First mover Advantage
The T in IIT CAP
Tapping Useful Resources
The C in IIT CAP
Coping with Rapid Changes