Internal Environment And External Environment In The Business Environment

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1.7.1 INTERNAL ENVIRONMENT: It is defined as all the forces or conditions that are available within an environment that affects an organization and business. It is also known as controllable factors because business can control them. The internal environment deals with the management of resources like human resources, physical resources, technology, monetary resources and others that constitute the organization in order to implement or execute a strategy. Internal environment also includes culture and other intangible aspects like teamwork, coordination, efficiency level of employees, employee’s salaries and monitoring costs. The strategy for competition should also be in sync with the internal resources especially the internal environment. 1.7.2 EXTERNAL ENVIRONMENT: External environment refers to external aspects of the surroundings of business enterprise, which have influence on the functioning of business. The external environment can provide both facilitating and inhibiting influences on organizational performance. Key dimension of the external environment principally consists of a micro environment and a macro environment. External Environment Micro Environment Macro environment  Suppliers  Customers  Market Intermediaries  Competitor  Financiers  Public  Economic  Political  Social…show more content…
For example the competition for a laptop manufacturer may not only come from other laptop manufacturers but also from two wheelers, refrigerators, cooking ranges, firms offering saving and investment schemes like deposits and issuing shares or debentures, etc. Thus, customer has many choices for investing his income. Such kind of competition is known as a desire competition when the competition among such alternatives which satisfy a particular category of desire and it is very high in the countries with limited disposable incomes and many unsatisfied
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