Archive | Business Environment

Elements Of Business Environment   Political Environment Economic Environment Social Environment Technological Environment Legal Environment Demographic Environment Natural Environment International Environment   1.         POLITICAL ENVIRONMENT:   The political environment can be one of the less predictable elements in a business. Any business needs to monitor the changing political environment because political change can profoundly affect [...]

Environment:Environment refers to all external forces, which have a bearing on the functioning of business. Business environment poses threats to a firm or offers immense opportunities for potential market exploitation.  

Features / Characteristics of business:   Change Vast Business Canvas Globalization: Going global Diversification: One company having many business e.g. reliance, tata Risk and uncertainties  

Business may be understood as the organized efforts of enterprises to supply consumers with goods and services for a profit. Business varies in size, as measured by the number of employees or by sales volume. Large organizations such as Reliance industries, Tata, Godrej, etc count their employees in the hundred thousands and their sales revenues [...]

How MNCs expand their business:   1.         International Licensing: MNC permits the domestic company to use its trademark, brand name or technical know-how for manufacturing and marketing purpose. The license is given against payment of fee, which acts as source of income to the MNCs. E.g. Brand 555 is the licensed user of British American [...]

Merits of Multinational Corporations:   Change and progress: MNCs are said to be the agents of change and progress, on world wide. Enables maximum use of resources. To the host countries, the plants, equipments, and technical know how necessary for its operations which is not available otherwise is made available through MNCs. MNCs create employment [...]

DEMERITS OF MNCs   Provides out-dated technology. MNCs exploit local labour by paying relatively lesser rates. MNCs involvement often results in the lack of development of local research and development. Use of capital intensive technology reduces jobs in local country. MNCs ruin domestic companies. Adverse effect on life style / culture in host countries. Charge [...]

Operating Characteristics of MNCs:   MNCs can reduce their sourcing and distribution costs compared to National Business, can avoid tariffs, quotas and other trade barriers faced by exporters and are also able to periodically shift operations from high cost to low cost countries.   Number of top jobs in MNCs will be allocated to the [...]

Inter conglomerate Model MNC:   For such organizations, money is main aim. Investment and Rate of Investments are very high. No loyalty towards any subsidiary countries. E.g. HLL, Unilever etc. Companies enter any segment and adapt the approach of Multi segments, Multi markets, Multi products and Multi countries. Such companies try to acquire monopoly and [...]

Umbrella Model MNC:  This model is very good among others. There is a relationship of mutual help between the Head quarter and the subsidiary. Ideas and money flow freely.   Making money and using power is not the primary motto of the organizations. Head quarters give full freedom to the subsidiaries. Both HQ and subsidiaries [...]